Ky. needs Medicaid expansion but the question remains whether it can afford it, Haynes says

10/11/2012 08:10 AM

Kentucky would benefit from expanding Medicaid to more low-income families under the Affordable Care Act, but economists and actuaries are just now looking into whether the state can afford it over the long haul, Kentucky’s health cabinet secretary said.

Speaking to non-profit leaders at the Kentucky Youth Advocates’ “Step Up for Kids” forum this week, Haynes initially stated the obvious: it’s the governor’s decision to expand the program to cover people earning up to 138 percent of the poverty rate.

But she went on to say that covering more low-income Kentuckians can help improve the overall health of the state.

“By expanding Medicaid, we’re able to really focus on much more managed care and preventative care. I’ve often said … we’re atop of all the lists we want to be at the bottom of and at the bottom of all the lists we want to be at the top of,” she said. That includes being among the worst states for rates of diabetes, heart disease and certain cancers.

“We should all wants kids and families to have access to affordable care,” Haynes said.

But while the federal government will pay for the expansion of the program for the first three years, the state will have to pick up a small part of the tab starting in 2017 — at a time when the budget already is tight.

Still, Haynes said the expansion of the program could lead to general fund savings in some areas, would provide an influx of more federal matching funds to improve care for Kentuckians and would generate economic activity as the money flows into hospitals and health care providers.

Kentucky pays three managed care firms a total of about $3 billion of the total $6 billion Medicaid program to cover the health needs of 725,000 poor and disabled Kentuckians, Haynes said.

The other half of the Medicaid budget covers about 125,000 Kentuckians — most of whom are the most ill and require expensive long-term care.

Shifting to a managed care system is supposed to save the state money as those firms take over billing and payments to doctors and hospitals for treating Medicaid enrollees. But Haynes said it won’t necessarily mean laying off many of the 200 Health and Family Services Cabinet employees who were handling Medicaid billing.

Instead, she said many will shift to new roles in overseeing the managed care contracts:

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