Stivers advocates for healthcare change, says cost savings will prop up pensions

11/09/2015 10:56 PM

As time draws closer for Kentucky to pay a percentage of increased healthcare costs several Republicans are floating the idea of pulling the plug on the state portal to expanded healthcare and investing cost savings in other places — including the underfunded pension systems.

The rates of uninsured have plummeted since implementing a state run health exchange and expanding the state’s Medicaid population, but the number of Kentuckians under Medicaid has ballooned, and it’s that population which will likely come under the microscope over the next year.

Republicans like Senate President Robert Stivers of Manchester, and Gov.-elect Matt Bevin are advocating for a model of healthcare which would require the insured have “more skin in the game.”

In a recent pre-election interview with Pure Politics, Stivers said that some individuals that are currently receiving insurance at 138 percent of the federal poverty rate, “may have to have a small co-pay” under a new plan. Stivers said if a person smokes that could increase the co-pay in an effort to modify behavior.

“One of the biggest problems in Medicaid or any healthcare situation in the product is people who you are trying to manage their care not their dollars, and so the more skin they have in the game the more likely they are to modify their habits,” Stivers said.

Stivers said the coverage “style” or “model” would change, but coverage, he says would essentially be the same.

With a switch in healthcare delivery Stivers, and Bevin, are seeking to ease a coming general fund expenditure of $250 million for expanded Medicaid in 2017 and 2018.

Coupled with systemic changes, Stivers says that the cost savings realized in healthcare can free up needed cash to pay down debt within the state’s pension systems.

“That would free up a whole lot of dollars to potentially put into KERS or KTRS,” Stivers said referencing the Kentucky Employees Retirement Systems and the Kentucky Teachers’ Retirement System.

The dollar amounts needed to pay into the pension systems are staggering. The teachers’ retirement plan is seeking more than $1 billion more in the upcoming two-year spending cycle — $520 million in fiscal year 2017 and $488 million in fiscal year 2018.

The Kentucky Retirement System will also have an increased contribution they’re seeking an extra $130.4 million next biennium based on current projections that number is not the official request — the KRS board will set its requested contribution rate at a Dec. 3 meeting.

Outgoing Gov. Steve Beshear expanded Medcaid using an executive order, and Bevin says he will seek to roll that back, but it could take time and money. According to recent reports the federal government needs at least 12 months notice to shut down the state insurance exchange, and $23 million to pay back the federal government for the state’s website.

A change to Medicaid would also have to travel through the federal government, and could meet red-tape as Bevin “tailors” a plan for Kentuckians.

A report published in February, and cited often during the campaign found the state would pay an estimated $247.6 million in the 2017-18 biennium to cover the newly eligible Medicaid recipients, but those costs would be offset by $511.8 million in anticipated savings as the state begins to pay for the expanded population. The findings have been challenged by the GOP.


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