As Bevin Considers Medicaid Changes, New Data Say It Saves Money
A new report shows Medicaid expansion in Kentucky would continue to save the state money were it to remain in its current form.
The Robert Wood Johnson Foundation released the report Tuesday. It examines the financial effects of Medicaid expansion in 11 states and the District of Columbia.
Overall, the report found state spending in Medicaid expansion states grew by half as much as spending in non-expansion states between 2014 and 2015.
"There are a lot of examples of people whose care can be funded under Medicaid expansion," said Kathy Hempstead, director of coverage for RWJF. "That's sort of an easy way for states to save money on people they were providing services to anyway."
In fiscal year 2014, Kentucky saved $2.4 million on coverage for medically needy enrollees, which accounts for six months of savings, according to the report. In the next fiscal year, the state is expected to save $14 million.
The report comes as Gov. Matt Bevin plans to change the Medicaid program in Kentucky, which his predecessor, former Gov. Steve Beshear, expanded under the Affordable Care Act.
More than 500,000 Kentuckians have gained access to health insurance and Medicaid coverage through Kynect, the state's health insurance exchange, and the expanded Medicaid program. The vast majority are covered by Medicaid.
Shortly after he became governor, Bevin announced he would ask the federal Centers for Medicare and Medicaid Services for a waiver to "transform the way in which Medicaid is delivered in Kentucky."
Bevin spokeswoman Jessica Ditto said in an email Wednesday that the state inherited a $125 million shortfall in the program this year. She said the state is spending nearly $4 billion on Medicaid this biennium, and the administration expects that to grow by $380 million in this budget cycle alone.
"Simply put, we can't afford the current Medicaid system," Ditto said. "We must transform and create system that is financially sustainable for the benefit of all Kentuckians."
The Bevin administration has yet to provide details on what that system will look like. The governor has suggested he would use Indiana as a model. There, residents earning up to 138 percent of the federal poverty level are eligible for Medicaid coverage, although most are required to pay a portion of the premium.
Last month, Beshear launched a nonprofit organization to advocate for policies implemented by his administration, including Medicaid expansion and the state's health insurance exchange, Kynect.
Spokeswoman Hayley Prim, of Beshear's Save KY Healthcare, said in an email that Medicaid expansion has had a positive impact on Kentucky by enabling thousands to gain access to health insurance. It has also helped create thousands of jobs, she said, and lowered the state's uninsured rate by 68 percent.
"The RWJF report confirms that the expansion has created huge savings for Kentucky, and when you combine that with the new revenues generated, this expansion is paying for itself," Prim said.
According to RWJF, the state saved $1.7 million in FY 2014 related to spending on disabled enrollees, which accounts for six months of savings. Prior to expansion, individuals would have had to pursue a disability determination to be eligible for Medicaid. The state is expected to save $7.9 million in 2015.
When it comes to the state's spending on mental and behavioral health, the report says Kentucky saved $9 million in FY 2014 (which accounts for six months of savings) and is expected to save $21 million in 2015.
The RWJF report includes analyses of state spending in Arkansas, California, Colorado, Kentucky, Michigan, New Mexico, Oregon, Maryland, Pennsylvania, Washington, West Virginia and the District of Columbia.