Beshear says he will decide in four to five weeks, or July 1 at the latest, whether or not to expand Medicaid

By Al Cross
Kentucky Health News
This story has been updated.

Gov. Steve Beshear said Monday that he will decide within the next four to five weeks, or maybe by July 1, whether to expand the Medicaid program under federal health-care reform.

Beshear, who has said he would expand Medicaid if the state can afford it, told reporters that he is considering other factors, which he did not name. He said his administration has not calculated the cost of expansion, which the state would not pay immediately.

The federal government pays about 71 percent of Medicaid's cost in Kentucky, and would pay the full cost of covering those newly eligible in 2014-16. The state would have to pay 3 percent in 2017, rising to 10 percent by 2020.

About 830,000 Kentuckians are covered by Medicaid, and at least 400,000 more could be added if Beshear expanded it to include households earning up to 138 percent of the federal poverty level, as required by the reform law.

Another possibility is that Beshear would seek approval from the federal government to use federal money to subsidize purchase of private health insurance by the poor, which has been approved in Arkansas but not in Tennessee.

The governor's office, asked if the administration was considering that option and what other factors Beshear is considering, has not responded had this response: "The governor is considering multiple issues as he determines whether Kentucky will expand Medicaid eligibility.  Along with affordability for the state, he is also looking at potential economic impact through jobs and investment created by possible expansion, as well anticipated changes in health outcomes for newly-eligible Kentuckians."

That is also the case with There has still been no response from Humana Inc., which does much of its business through government-financed health plans. The Louisville-based insurance company was asked if it has had discussions with the Beshear administration about the idea of a Medicaid expansion that would use federal money to buy, or subsidize the purchase of, private health insurance.

"Beshear said Monday that he is getting a lot of pressure from the medical field – particularly hospitals – to green-light the expansion," Beth Musgrave of the Lexington Herald-Leader writes. "Hospitals will lose additional money they receive through Medicaid on Jan. 1 as part of the Affordable Care Act. Hospitals in Ohio and other states have also put pressure on state governments to expand Medicaid rolls."

Beshear said, “I think they look at the expansion as a means to at least replace some of that (money) that they are going to lose.”

Many Republicans have opposed expansion, "saying that the state could not afford it," Musgrave writes. "The Republican-led state Senate passed a bill during the legislative session that would have required that the two-term Democratic governor get legislative approval before expanding the health care program. But the measure died in the Democratic-controlled House. Beshear could expand the program via executive order."

Beshear said today, “We have a very large uninsured population and we have a very unhealthy population. Anything that we can do — that we can afford — to make our population more healthy, I”m certainly in favor of doing.” He added, “We are looking long-term as well as short-term from a financial standpoint to see if it makes sense for us.”

While he said he would act within four to five weeks, Beshear gave himself some wiggle room, saying also that he would make the decision by July 1, the beginning of the state's fiscal year. (Read more)

If Republican governors are agreeing to expand Medicaid after lobbying by hospitals, can Beshear be far behind?

By Al Cross
Kentucky Health News

Florida Gov. Rick Scott's surprising announcement that he would use federal health-care reform money to expand the Medicaid program to households earning up to 138 percent of the poverty level "means the dominoes are falling," says Ron Pollack, executive director of Families USA, a consumer group that lobbied for the law. And another domino seems likely to be Democratic Kentucky Gov. Steve Beshear, without involvement by the state legislature.

Beshear has said he will expand Medicaid if Kentucky can afford it, and has mentioned that the state can reserve the right to pull out of the deal in 2017, when it must start paying a small but increasing share of the cost, reaching 10 percent in 2020. Scott used the same qualification.

Pollack told The New York Times that the message sent by seven Republican governors' acceptance of the deal is  “Even though I may not have supported and even strongly opposed the Affordable Care Act, it would be harmful to the citizens of my state if I didn’t opt into taking these very substantial federal dollars to help people who truly need it.” The GOP governors (of states outlined in Times map below) have said they will expand the program partly to protect rural hospitals and the poor.

"The change of heart for some Republican governors has come after vigorous lobbying by health industry players, particularly hospitals," the Times notes. "Hospital associations around the country signed off on Medicaid cuts under the health care law on the assumption that their losses would be more than offset by new paying customers, including many insured by Medicaid. . . . Every few days, state hospital associations and advocates for poor people issue reports asserting that the economic benefits of expanding Medicaid would outweigh the costs." (Read more)

Kentucky Hospital Association President Michael Rust said the trade group is for "universal coverage" by whatever means but is not lobbying Beshear for Medicaid expansion. "We assume he is" going to expand it, Rust said in an interview today. He said the association has not taken a position on bills that would require legislative approval of expansion and the health-insurance exchange being set up under the reform law. The legislation, Senate Bill 39 and SB40, passed the Republican-controlled Senate on party-line votes today, and are expected to die in the Democratic-majority House.

Senate Majority Floor Leader Damon Thayer said the bills were aimed at reining in "big daddy government." Here's a video from cn|2:

Kentucky Health News is an independent news service of the Institute for Rural Journalism and Community Issues at the University of Kentucky, with support from the Foundation for a Healthy Kentucky.

Fiscal-cliff deal revives program that helps rural hospitals dependent on Medicare; 200 in nation, 10 in Kentucky

Even though most of the hospital industry wasn't happy with the fiscal-cliff deal that will only pay half the $30 billion needed to avoid a 27 percent Medicare fee cut for doctors, the deal gave about 200 rural hospitals, including 10 in Kentucky, reason to celebrate. It extends a program that pays hospitals up to several millions of dollars a year because they have fewer than 100 beds, are located in rural areas and have a high percentage of Medicare patients, Phil Galewitz of Kaiser Health News reports.

The Medicare Dependent Hospital Program was created in 1990 and is one of several payment programs designed to help small, rural hospitals deal with financial challenges that larger hospitals don't face. The program is based on the idea that "some rural hospitals have such a high percentage of Medicare patients they are unable to get enough money from higher paying privately insured patients to make up for the lower government reimbursements," health lawyer Eric Zimmerman told Galewitz.

The program has come under scrutiny. Congress allowed it to expire in September 2012, but two senators from New York and Iowa made sure $100 million for the program made it into the budget deal. The Medicare Payment Advisory Commission said hospitals in the program will receive about 25 percent higher reimbursements as a result of the funding. (Read more)

The Kentucky hospitals in the program are Clinton County Hospital, Fleming County Hospital, Harrison Memorial Hospital, Jewish Hospital Shelbyville, Logan Memorial Hospital, Monroe County Medical Center, Parkway Regional Hospital in Fulton, Rockcastle Regional Hospital, Taylor Regional Hospital and Westlake Regional Hospital in Columbia. The Appalachian Regional Hospital in Williamson, W.Va., is also considered a Kentucky hospital in the program.

Lame-duck Congress could cut funding for critical access hospitals; more than two dozen in Kentucky

Critical access hospitals, which in most states are rural facilities with fewer than 25 beds, may be under attack in the lame-duck session of Congress, former national rural-health director Wayne Myers writes for the Daily Yonder. President Obama's "budget proposes to revoke CAH status and special payments for any such hospital within 10 miles of another hospital, and to cut the extra 1 percent payment for all of the critical access hospitals," Myers writes. (Census Bureau map of CAH locations)

This would "have enormous consequences," Myers writes. "Of the hospitals that lose CAH designation probably most will close or merge with another hospital. I've seen no estimates of numbers. There are more than a few congressional budget hawks in both parties who would like to eliminate the special payments to Critical Access Hospitals entirely. If these small hospitals dodge the bullet during the lame duck session, they'll continue to be targets in the next Congress. If they are successful in reducing payments to CAHs, the net effect will be to move health care capacity and jobs from smaller to larger towns."

The issue is complex. Rural areas have less political clout than ever, because of declining population, and many rural people use urban hospitals over CAHs, even for ordinary care. "Those who do use CAHs say their experience there is just as good as that in urban hospitals, even if the quality of care isn't as good as in larger facilities," Myers writes. "Elderly patients stay at CAHs because they know the nurses and doctors and their families live close by."

Issues for CAHs arise out of how Medicare payments are made to them, Myers writes. "A long list of arcane, special funding arrangements has accumulated to try to fit small rural hospitals into a Medicare payment system designed for large city hospitals." The largest program is the "Disproportionate Share Program," or DISH, which gives $15 billion a year to states to hand out to CAHs. The program is being phased out between 2014 and 2020, along with several other programs, as part of the Patient Protection and Affordable Care Act. (Read more)