Op-Ed: Expanding Medicaid Means Improved Health and Quality of Life for Many Kentuckians

Expanding Medicaid through the Affordable Care Act (ACA) in 2014 is a key opportunity to improve the health and wellbeing of Kentuckians across the state, and Governor Beshear should be commended for his decision to embrace the expansion.

Our state faces tremendous health challenges—ranking close to the bottom among the states on many health indicators. By providing coverage for around half of the state’s uninsured (many of the remaining of whom will be covered by the ACA’s health insurance exchange), the Medicaid expansion will go a long way in helping to move the dial on Kentucky’s health status.

That’s because people who are uninsured have worse health outcomes than those with insurance—particularly those with chronic conditions like diabetes that Kentuckians suffer from at high rates. Study after study shows that lack of insurance is associated with increased rates of disease and earlier death.

The uninsured are less healthy because they are more likely to refrain from seeking medical care due to cost. A survey by the Kentucky Health Insurance Research Project showed that uninsured Kentuckians are more likely to delay medical attention; skip medical tests, treatments or follow-ups; fail to fill prescriptions for medicine; and avoid seeking out needed treatment from a specialist.

Market-based alternatives to Medicaid expansion that have been proposed by those in opposition to it tend to be either unrealistic in addressing the health needs of a low-income population or more expensive. For instance, the Cabinet for Health and Family Services reported that it could be 50 to 66 percent more expensive to implement the Arkansas model of providing vouchers to purchase private health insurance than it would be to provide traditional Medicaid.

In addition, those who misinterpret recent findings of the Oregon Health Study argue that Medicaid does not improve health, but the study’s findings actually support the claim that the Medicaid expansion improves the health and wellbeing of beneficiaries.

New findings from the study show that Medicaid beneficiaries were less likely than those without insurance to suffer from depression and more likely to be diagnosed with and treated for diabetes. Those with Medicaid were also far more likely to access preventive care such as mammograms for women. In addition, the Oregon study indicated that Medicaid very nearly eliminated catastrophic out-of-pocket health care costs, which are the cause of the majority of personal bankruptcies in the United States.

Earlier findings from the study include Medicaid recipients reporting that they were healthier than those who remained uninsured. Recipients were also more financially secure—less likely to avoid paying other bills because of high medical expenses and to have unpaid medical bills.

While the Oregon Health Study did not find significant changes in diagnoses or treatment of high blood pressure or high cholesterol from its small sample during an average of just 17 months on Medicaid, recipients’ increased use of preventive care could take years or even decades to show its full effect on health. Another recent study found that five years after three states expanded Medicaid, expansion was associated with a 6.1 percent reduction in mortality. Recipients were also more likely to report that their health was “excellent” or “very good” and less likely to report delaying care due to costs.

The Medicaid expansion not only makes good health and financial sense for individual Kentuckians—it also makes good economic sense for the state. The state’s Cabinet for Health and Family Services hired experts to perform independent studies of the cost of the expansion and its economic impact. The resulting report showed that Medicaid expansion in Kentucky will result in a net savings of $802 million to the state budget over the next eight years, and not expanding Medicaid would cost the state $39 million over that same period. The state saves money in part because expansion will cover some indigent health costs currently paid for through the state’s General Fund and create jobs that will generate additional tax revenues.

The Governor’s decision to accept the Medicaid expansion is a winner for Kentucky’s health and economy. Research shows that the expansion can improve health and wellbeing for beneficiaries and save the state money.

Ashley Spalding is Research and Policy Associate at the Kentucky Center for Economic Policy.

Implementing Health Reform Will Promote Entrepreneurship in Kentucky

Another reason that Medicaid expansion and the rest of the Affordable Care Act (ACA) is good for Kentucky’s economy is that it will help support the entrepreneurs and small businesses that are critical to innovation and growth.

The Medicaid expansion is expected to make coverage available to up to 308,000 Kentuckians, while the ACA’s health insurance exchange could cover another 332,000. That access to health insurance will help address the problem known as “job lock.” That’s when people are reluctant to change jobs because they will lose their health coverage or because insurance will become unaffordable. MIT economist Jonathan Gruber notes that there are dozens of studies showing that job lock is harmful to the economy because it means people aren’t moving to work where they might be more productive. According to Gruber, the lack of an alternative source of coverage is estimated to reduce mobility by as much 25 percent.

Job lock also applies to people who would like to strike out on their own to start a small business. By deterring entrepreneurship, lack of alternative coverage can stifle innovation and lead to less local ownership of the economy. A study by economist Alison Wellington shows that people who have an alternative source of health coverage—such as through a spouse—are more likely to be self employed than those who do not. She estimated that universal health coverage could increase the share of self-employed by between 2 and 3.5 percentage points.

And Kentucky could use help in this area. According to a 2008 study done for Mountain Association for Community Economic Development (MACED), Kentucky is below the U. S. average in entrepreneurs as a share of employment and in measures of entrepreneur income.

In addition to helping people take the leap into entrepreneurship, the ACA also assists existing small businesses by helping them provide affordable health insurance to employees. Small businesses currently pay about 18 percent more on average than large businesses for the same health insurance policy because they lack the bargaining power that big businesses have with insurers.

Under the ACA, many small businesses with less than 25 employees can qualify for tax credits to help with the cost of providing insurance. Those with less than 100 employees will be able to utilize the health insurance exchange, giving them the benefit of participating in a larger insurance pool and allowing them to avoid the administrative costs of setting up their own plan.1

The economic benefits of implementing the Affordable Care Act are many: it will result in a healthier workforce, protect otherwise uninsured Kentuckians from financial disaster in case of illness, bring in billions of federal dollars that will create health care provider jobs, and save money now spent to provide emergency room and other care to the uninsured. We can add to that list the support the law provides to entrepreneurs and small businesses.

  1.  Also, businesses with less than 50 employees avoid any penalty associated with not providing health insurance.

Pathway to Citizenship for Immigrants Would Be Good for Kentucky’s Economy

Last week, the Senate Judiciary Committee approved a comprehensive immigration reform bill that would increase border security, regulate future immigration flows, and formally extend the American dream to the 11 million immigrants living in the U.S. without legal status, about 80,000 of whom live in Kentucky.

Immigrants who do not have legal status make up roughly 1.8 percent of Kentucky’s population, and because they are more likely than native born Kentuckians to be working age adults, about 2.6 percent of our labor force. Conferring legal status and a pathway to citizenship is good for Kentucky’s economy. Here’s why:

Higher wages and lower poverty. Immigrants who become naturalized citizens have higher wages and lower poverty rates than immigrants without legal status, as the Economic Policy Institute shows. In Kentucky in 2011, according to the Migration Policy Institute, 28.9 percent of non-citizen immigrants lived in poverty, compared with 13.8 percent of citizen immigrants. Legal status allows workers greater economic mobility through decreased vulnerability in the workplace, access to a diverse range of jobs and physical mobility through drivers’ licenses.

Increased demand for goods and services. As a result of their economic gains as legal residents and then citizens, immigrants would grow Kentucky’s economy by increasing demand for goods and services like cars, food, health care and vacations. That demand creates jobs.

More tax revenue. Even without legal status, immigrants pay property and sales tax in Kentucky, and many also pay Social Security and Medicare taxes that they won’t benefit from. However, legal status would allow the state and federal government to collect all income and other taxes owed by immigrants. This means more needed money for schools, public safety and roads.

Self-investment. Immigrants with legal status are more likely to invest in their own education and skills because of the greater returns on those investments. That’s an especially important consideration for the estimated 2,000-10,000 DREAMers living in Kentucky–immigrants who were brought to the U.S. as young children, know no other home, and aspire to go to college. Better skills and education will only further improve their wages and contributions to the economy.

Level playing field for businesses and native-born workers. Employers who play by the rules will no longer have to compete with unscrupulous employers who have been hiring and underpaying immigrants without legal status. The Senate immigration bill would mandate the use of the E-Verify system for all employers to ensure they hire workers with legal status. Likewise, native-born workers will no longer have to compete with immigrant workers that employers can underpay.

In the next few weeks, the immigration reform bill will go before the full Senate. Its future in the House is uncertain. The road to passage will be bumpy, but given the benefit of immigration reform to native and non-native Kentuckians, it’s worth the fight.

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Medicaid Expansion Can Help Address Kentucky’s Substance Abuse Problem

There are many reasons to commend Governor Beshear’s recent announcement that Kentucky will be expanding Medicaid through the Affordable Care Act (ACA). Among the numerous important benefits of the ACA is that it will help with Kentucky’s substance abuse problem—and the Medicaid expansion will further broaden the reach of that benefit.

It’s no secret that Kentucky has a huge substance abuse problem. In 2009-2010, approximately one in 13 Kentuckians age 12 and over—and one in five of those 18 to 25—were dependent upon or abused illicit drugs or alcohol in the previous year, according to a federal survey.1 The problems with prescription drug abuse, methamphetamine and more recently heroin impact every community.

Despite the state’s substance abuse problem, funding for treatment in Kentucky has been inadequate. A report produced for the legislature in 2010 noted that “with no increase in state or federal funding over the past 14 years, treatment capacity cannot increase and, in fact, cannot maintain its current level of service without reducing the intensity of care provided.” Most treatment facilities are at full capacity, and there are virtually no treatment slots available for the citizen who voluntarily seeks treatment—rather than being referred by the courts, Probation and Parole, or the Department of Community Based Services.2 Until the current state budget opened up 5,800 slots over the next two years, Kentucky was one of only seven states that didn’t offer community-based substance abuse treatment through Medicaid.

The good news is that the ACA requires that both Medicaid and the insurance offered through the ACA’s health care exchanges broadly cover substance abuse treatment. This means that through the ACA those who enroll in an exchange in Kentucky (approximately 332,000) and those who are already enrolled in Medicaid (approximately 800,000) will have access to substance abuse treatment in 2014. But because Governor Beshear decided to expand Medicaid in Kentucky, another approximately 308,000 additional Kentuckians will be able to enroll in Medicaid and will have access to substance abuse treatment. Thousands of Kentuckians struggling with addiction problems will now have the opportunity to access treatment.

Increased access to substance abuse treatment will also help Kentucky’s economy. During much of the past fifteen years, the state’s prison population has been one of the fastest growing in the nation—in large part because of the rise in drug offenses. Increasing access to drug treatment through the ACA and Medicaid expansion will complement the state’s existing efforts to reduce incarceration rates and associated costs—namely through the passage of the “Penal Code and Controlled Substances Act” (HB 463) of 2011. The implementation of HB 463 is intended to reduce incarceration and related costs for drug crimes, and the ACA and Kentucky’s Medicaid expansion should further help the state meet the legislation’s goals by reducing the number of Kentuckians abusing drugs.

  1. Also, approximately one in 19 Kentuckians age 12 and up—and one in seven age 18-25—used pain relievers for nonmedical purposes in the previous year. National Surveys on Drug Use and Health. “State Estimates of Substance Use and Mental Disorders from the 2009-2010 National Surveys on Drug Use and Health,” http://www.samhsa.gov/data/NSDUH/2k10State/NSDUHsae2010/NSDUHsaeAppC2010.htm#tabC.21.
  2. Robert Walker, Erin Stevenson, Allison Mateyoke-Scrivner, Diane Parrish, and Terry Hunt. “Special Report on Kentucky’s Substance Abuse Treatment Capacity, Costs, and Persons Served: Report for The Task Force on Penal Code and Controlled Substances Act,” October 2010.

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