Lawmakers prepare for increased healthcare costs

11/16/2015 03:47 PM

FRANKFORT – State Lawmakers are exploring all options as the commonwealth’s portion of healthcare costs increase over the next several years.

Lisa Lee, Medicaid commissioner for the Cabinet for Health and Family Services told members of the Interim Joint Committee on Appropriations and Revenue BR Sub on Human Resources on Monday that the state’s share of costs from Medicare Part B will be $4,836,653 in FY16, $10,680,716 in FY17, and $10, 668,076 in FY18.

While that amount is lower than was earlier projected, it will still prove to be a significant expenditure to Kentucky’s already tight budget beginning with the next legislative session.

Committee Chair, Sen. Ralph Alvarado, R-Winchester, said that even though the cost is less than previously projected, it still is significant and feels that there will be more costs related to the program in the future.

“I don’t expect that premium to stay where it’s at, it’ll probably continue to rise,” Alvarado said. “The costs continue to increase.”

Over the summer, Alvarado expressed interest in marketing kynect, the state’s health insurance exchange, to other states.

Under the proposed plan, Kentucky would set up and run exchanges for other states using the kynect model. Kentucky would be receiving revenue from states using the system which would not only pay for the kynect system but the growing Medicaid expansion costs.

To date, Alvarado has been frustrated by the fact that no one has the answer as to how many other states would be interested in the exchange and what the cost would be to operate a federal exchange.

“Until I know if the federal exchange is much cheaper; if the federal exchange is a tenth of the price of a state run exchange, it’s going to be tough to get other people to pay you ten times that amount or more, to run an exchange for them,” Alvarado said. “With those two variables unknown, it’s just a concept.”

Alvarado notes that Indiana received a federal waiver for its Medicaid expansion program, Healthy Indiana Plan (HIP) 2.0, earlier this year.

Under HIP, coverage was expanded to Indiana parents and childless adults earning below 100 percent of the federal poverty level. Enrollment for parents was not capped, but enrollment for childless adults has a cap and is limited to open enrollment periods.

The amended waiver covers nearly all adults ages 19-64 with income from zero to 138 percent of the federal poverty level. An estimated 350,000 individuals became eligible for coverage under this plan.

But unlike Kentucky’s Medicaid expansion, most of the enrollees have to pay for their Medicaid coverage.

“Even the poorest of the poor paid a dollar a month for their healthcare,” Alvarado said. “The folks found that they were more personally engaged in their own healthcare. They behaved better, if you will, as a patient.”

Gov.-elect Matt Bevin has said that he wants to dismantle kynect and move to the federal exchange.

Alvarado notes that whatever is done, will be carefully calculated and will take some time.

“It’s going to take a while, but we’ve got to have something else in place,” Alvarado said. “We have other plans that will hopefully provide an alternative for people out there and still provide services for Medicaid in a more cost efficient fashion.”


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