by Ryland Barton
This column first appeared in the Courier-Journal on March 25, 2016.
After 15 rounds of state budget cuts through the recession and recovery, the foundation of Kentucky’s economy—our schools, higher education systems, health services and more—have been significantly weakened.
But final deliberations on the budget will include consideration of even deeper cuts to the services that protect and propel our Commonwealth. Moving into the final days of the 2016 General Assembly, lawmakers must salvage a budget that does the least harm to our quality of life.
Let’s take college affordability as an example. If the proposed nine percent budget cuts go through, Kentucky’s public colleges and universities will have been cut by over a third in the decade between 2008 and 2018. That inevitably leads to higher tuition and student loan debt, which keeps students from graduating and makes it harder for Kentuckians to buy a home, start a business or save for retirement after college.
At the same time, potentially on the chopping block is $57 million in need-based college aid programs, as well as a scholarship proposed in the House that would make community college free for full-time, traditional students. These moves would strip opportunity away from Kentuckians, since ample research shows financial barriers are the biggest impediment to completing a degree.
College affordability is just one of many ways more budget cuts will hold the Commonwealth back. Cuts to Family Resource and Youth Services Centers will make it harder for schools to help struggling students. Reversing improvements to preschool and the Child Care Assistance Program will keep more parents from working, and will mean fewer kids get a strong start in life. Taking money away from behavioral health and programs that safeguard the air and water won’t make Kentuckians healthier.
Systems of justice and public protection we take for granted are at risk of being undermined. The budgets for the Attorney General, the State Auditor, Board of Elections, public defenders and the court system all face potential deep cuts just to name a few.
Though their versions have slight differences, both the House and Senate budgets make big new contributions to our state workers’ and teachers’ pension systems, which would get us on the path to solvency for the debt we owe those plans. Leaders of both chambers are to be applauded for taking the necessary steps to address that problem.
But the big remaining question concerns the rest of the budget and whether to put aside funds or put them to work. While some new savings are appropriate, we shouldn’t let hundreds of millions of extra dollars sit idle while deeply cutting the education, health and other services we know have a strong return on investment. Doing so hurts our quality of life, and by damaging our economy is counterproductive to paying back the debt we owe over time.
We do have to get our financial house in order and more actions will need to be taken than are possible this session—particularly the need to clean up the tax code to generate new revenue.
But the first step is to pass a budget this session that makes the responsible payments on our pension liabilities while doing everything we can to limit harm to the budgetary investments so critical to the future of our Commonwealth.
In a new video describing the importance of Family Resource and Youth Services Centers (FRYSCs) and Extended School Services (ESS) – programs the Senate budget cuts – Jackie Butts, a 6th Grade Language Arts teacher at Tichenor Middle School in northern Kentucky, says “when we talk about money, a lot of times people forget … there are students behind that money.”
As legislators head into final negotiations on the state budget, it’s a good time to remember that all services on the chopping block have people and purpose behind them. The Senate budget and to a lesser degree the House budget (which largely takes out education cuts) threaten these services, and therefore the building blocks of thriving communities and a growing economy. Below is a sampling of services facing cuts.
In (non-SEEK) P-12 education, cuts to areas including the following will mean fewer Kentucky children going to preschool and other service reductions, inadequate educational supports and a decrease in the number of teachers and other crucial personnel in schools:
- Preschool equips kids with the skills they need to succeed in school and later on in life.
- FRYSCs and ESS programs respond to needs that otherwise hold students back: FRYSCs provide meals, educational supplies, clothes and other necessities for kids whose families and communities face economic challenges while ESS programs provide instructional time outside normal classroom hours to kids who need extra academic support.
- Through professional development, teachers continually learn how to be better at their jobs.
Cuts to higher education will make college even less affordable and accessible than it already is and compromise the quality of education provided as faculty and staff are furloughed and lose their jobs, and some student life, academic and community service programs are terminated. There has even been concern that cuts could shutter KSU altogether. These cuts also have economic implications for the state. As University of Kentucky President Capilouto pointed out, universities (and higher ed more generally) are “an economic engine”:
- Jobs in our state increasingly require at least some higher education. Kentucky’s eight public universities graduate thousands of students each year from baccalaureate and advanced degree programs in a wide array of fields including agriculture, business, computer science, liberal arts, education, engineering, health sciences, journalism, law, nursing, social work and other fields that make our economy strong.
- University researchers make important discoveries and contributions to Kentucky, including in medicine and technology, that help spur innovative businesses.
- The Kentucky Community and Technical College System (KCTCS) – consisting of 16 separate colleges across the state that serve nontraditional students at a higher rate than most of the state’s universities – offers industry-specific training as well as courses that transfer to four-year institutions. KCTCS is the state’s largest workforce development program.
- Need-based financial aid helps low-income students afford to enroll in college and stay on track to earn a degree. The Senate budget missed the opportunity the House took up to significantly boost need-based aid for these students.
- Adult Education (KYAE) prepares Kentuckians for and provides them with access to a GED diploma, a crucial credential for attaining gainful employment in today’s economy.
- Access and connectivity to information – including about employment, current events and community services – and high-quality educational resources help Kentuckians live well and be active in their communities. Kentucky Educational Television (KET) and the Department for Libraries and Archives provide such access. The Kentucky Commission on the Deaf and Hard of Hearing and the Office for the Blind help remove barriers and otherwise support individuals who face special challenges.
Cuts to the Cabinet for Health and Family Services (CHFS) – nine percent in all three versions of the budget – would weaken supports for the most vulnerable Kentuckians, from children in foster care to low-income, elderly Kentuckians. Thousands will continue to wait on programs for which they are eligible but don’t receive due to lack of funds. Cuts could impact:
- The Department of Community Based Services (DCBS), which provides: child care assistance to low-income, working parents to help pay for child care; financial assistance to Kentuckians raising children through Foster Care and Kinship Care (for non-parental relatives); support for victims of abuse and their families through domestic violence shelters and rape crisis centers; services that help at-risk juveniles stay at home; and child protective services and family prevention (crisis intervention and in-home services), among others.
- The Department for Aging and Independent Living (DAIL), which provides meals, transportation, home-based care and other community-based services so that elderly and physically disabled Kentuckians can stay healthy and happy at home.
- The Department of Behavioral Health, Developmental and Intellectual Disabilities (DBHDID), which includes Community Mental Health Centers providing assessment, educational, case management and community support services to adults and children with severe mental illness/emotional disabilities; and drug and alcohol treatment for people struggling with addiction.
- Residential services for people who need psychiatric hospitalization, nursing facility care, and other inpatient programs as well as community based care through Supports for Community Living (SCL), Michelle P. and the Acquired Brain Injury (ABI) Medicaid waiver programs.
The above three areas comprised about 80 percent of total General Fund spending in the last budget cycle. Other areas facing budget cuts also do work that makes a meaningful difference to our quality of life and ability to make progress as a state:
- The Energy and Environment Cabinet helps conserve and oversee use of Kentucky’s natural resources such as land, forestry and mining; analyzes and protects our state’s biodiversity through the Nature Preserves Commission; and pursues Energy Development and Independence through conservation, efficiency and alternative energy efforts.
- The Office of the State Budget Director supplies policy and economic analysis that forms the basis of state fiscal planning which impacts all Kentuckians through the budget.
- The Attorney General enforces laws including those related to the state’s drug epidemic, investigates and prosecutes crime, and protects Kentuckians from fraud among other responsibilities.
- The State Board of Elections – within the Secretary of State’s office – helps ensure the integrity of Kentucky’s voting process and provides training and infrastructure to counties that administer elections.
- Watchdog organizations like the Executive Branch Ethics Commission and Registry of Election Finance make sure that Kentucky’s elected leaders and candidates for office abide the law and are accountable to the public.
- The Commission on Human Rights protects Kentuckians’ civil rights by investigating cases of discrimination based on race, religion, origin, sex, age, disability and familial status. The Commission on Women advances the status of women in the state through education and advocacy about barriers to progress.
The model for performance-based funding outlined in the Senate budget proposal raises some questions and concerns about how the money would be distributed and what the likely outcomes would be for students and the state’s public higher education institutions.
In the proposal, 25 percent of 2018 funding for the state’s universities and community colleges (other than Kentucky State University, which is exempt) is contingent upon each institution’s performance on certain metrics. The main metrics for measuring institutional performance in the Senate’s funding model are: degrees and credentials awarded; student retention rates from first to second year; percentage of full-time undergraduates earning 30 or more credit hours a year; graduation rates and sector-specific metrics.
While these metrics are based on what Kentucky’s Council on Postsecondary Education (CPE) proposed in November with the support of the university and community college presidents, the Senate has made significant changes that could lead to decreased accessibility for low-income, adult and academically underprepared students, among other impacts.
Since it’s combined with budget cuts, the Senate proposal could make it harder for low-income Kentuckians to earn degrees.
Since the Senate’s proposed performance funding model is within a budget that cuts higher education funding by nine percent, it could make it harder for many students to earn degrees and credentials, particularly low-income, underrepresented minority, academically underprepared and community college students who have the lowest graduation rates.
While the bachelor’s degree graduation rate for all Kentucky students at four-year institutions is 48.9 percent, it is just 36.6 percent for low-income Kentuckians — which is only a slight increase from previous years. For associate’s degrees, the graduation rate for all Kentucky students at the state’s two-year-degree-granting colleges — where many of the students are low-income community college students — is just 12.8 percent; the associate graduation rate for low-income students is 10.4 percent.
The Senate’s performance funding proposal would penalize universities and community colleges that do not increase student success, but the accompanying budget cuts are expected to make college less affordable by increasing tuition and prevent or reduce investments in needed student supports. Many low-income students are adults and first generation college students, for whom supports are shown to improve the likelihood of obtaining a degree. Among the barriers to degree completion for these students are financial difficulties, the need to work and support a family, being academically underprepared and losing momentum in developmental education courses rather than moving on to credit bearing courses, and the need for supports like intensive advising and counseling particularly for first generation college students.
Performance metrics could disincentivize institutions from serving underprepared students who are often low-income.
A concern with performance-based funding is that academically underprepared students, who are often low-income, may be left behind as institutions attempt to meet performance goals. That’s because academically underprepared students often have more difficulty staying enrolled in college and graduating, particularly within the prescribed time frame.
Performance funding models can be designed to help keep this from happening. For instance, CPE’s proposal included a separate metric to measure institutions’ success in closing achievement gaps for underrepresented minority students and low-income students. The CPE model also included as a metric underprepared students completing credit bearing math and English courses — which indicates that these students successfully moved beyond developmental education courses. The Senate proposal, however, does not measure and reward the successful progression of underprepared students or provide a separate metric for closing achievement gaps. The Senate proposal’s scoring system does boost an institution’s scores for the degree/credential attainment and retention rate metrics for low-income and underrepresented minority students, although it is not clear how much weight these measures will be given in the calculations.
The proposed model’s high stakes could make unintended consequences of performance funding more likely.
Making a quarter of funding for higher education dependent on performance and at the same time cutting state funding for higher education is a dangerous mix since it raises the stakes. The model also pits institutions against each other. While they are measured against their own past performance, in each sector (research universities, comprehensive universities and Kentucky Community and Technical College System institutions) only the highest performing school gets 100 percent of their potential performance funding; this competition among institutions was not part of CPE’s model. The state’s public universities and community colleges are already stretched thin from previous rounds of budget cuts, and making such a large share of needed funding contingent upon performance — and relative to the performance of other institutions in their sector — could make potential unintended consequences of performance-based funding more likely to occur.
A concern with performance funding is that institutions may end up diluting academic quality and/or raising admissions standards to exclude those who are academically underprepared. There is some evidence that these unintended consequences have occurred with performance funding in Indiana, Ohio and Tennessee, for instance. Making the funding high stakes would only seem to encourage such consequences.
It’s also important to note that in addition to performance funding not being tied to new money as it was in the CPE proposal — which lowers the stakes and also recognizes that additional funds are needed to improve student performance (i.e., through support services) — the model proposed by the Senate is not being phased in over multiple years, which is considered to be a best practice for performance funding.
Shifting discretion and authority over resources to the governor could introduce a dynamic not related to performance.
According to the Senate’s proposal, the governor can give institutions that receive less than 80 percent of their performance funds up to 100 percent of their funds. It’s not clear why institutions that receive between 80 and 100 percent of their performance funds are not eligible for additional discretionary dollars. More importantly, the rationale for providing such discretion — particularly to the governor (i.e., rather than CPE) — is not evident nor is the criteria the governor would use to award these funds. Money not distributed for performance is rolled over for use in future years, potentially giving a governor control of a growing amount of resources.
The Senate proposal is not clear about many of the specifics of how the performance funding would work.
Among the unanswered questions are: How much of a premium will institutions receive for retention and degree/credential attainment for low-income and underrepresented minority students? How exactly is performance scored? In addition to the previously discussed issue of the unknowns around the weighting of degree/credential attainment and retention for low-income and underrepresented minority students, much remains unclear about the calculation of performance. For instance, what is the meaning of the following description of scoring?: “The score for each metric shall be determined by comparing the net percent of improvement of that metric for the two most recent academic years to the modified measure of net percent of improvement of that metric for the four preceding years, consistent with metrics currently used by the Council on Postsecondary Education.”
Given these questions and concerns, among others, about the Senate’s performance funding proposal, lawmakers should take more time and agree to further study to develop a performance-based funding model that will benefit all Kentucky students, including low-income, underrepresented minority and underprepared students — and minimize unintended consequences.
Senate Budget Maintains Governor’s Deep Budget Cuts, Increases Pension Contributions by Reducing Governor’s Set-Aside Funds
To view in PDF format, click here.
The Senate budget maintains the governor’s dramatic proposed cuts of nine percent to postsecondary education, parts of P-12 education and a wide range of services affecting health, quality of life and vulnerable Kentuckians. Its primary difference from the governor’s plan is to leave less money in the rainy day fund and a proposed permanent fund while increasing direct funding for pensions.
The Senate budget is similar to the House plan when it comes to total pension funding. The main difference between the two is the Senate still leaves $336 million more in the rainy day fund and permanent fund combined at the end of the biennium than the House, which uses those monies to reduce budget cuts in education and other areas.
Maintains the Governor’s Deep Budget Cuts to Higher Education and Many Other Areas
The Senate budget includes the governor’s budget cuts of 9 percent (4.5 percent this year) to many parts of state government with few modifications.
It includes 9 percent cuts to higher education institutions, which would mean funding for universities and community colleges will have been reduced by 35 percent between 2008 and 2018 once inflation is taken into account. In 2018 it puts 25 percent of higher education funding into a new performance-based system in which institutions must compete against each other for their portion of those funds (Kentucky State University is excluded).
The Senate budget does not include $57 million the House had proposed for need-based lottery-funded scholarship programs — the College Access Program and the Kentucky Tuition Grant program — which have had dollars diverted from them in recent budgets 1. The Senate also doesn’t fund the Work Ready scholarship proposed by the House that fills the gap in providing free tuition to traditional age students at the state’s community colleges. Instead, the Senate plan puts $58.9 million over the biennium into Kentucky Educational Excellence Scholarships (KEES), which are based on grades, for high school students who are dually enrolled in college credit or technical programs.
The Senate goes along with the governor’s budget in including nine percent cuts to the non-SEEK portions of P-12 education, which the House budget had not cut. Within Learning and Results Services, that means cuts of nine percent to areas like preschool, extended school services, teacher professional development and instructional resources. Family resource and youth services centers are cut by 6.3 percent, paid for by defunding a few programs including dropout prevention and the visually impaired preschool services program.
The Senate budget does not expand eligibility for preschool from 160 percent to 200 percent of the poverty level, as in the House plan. Like the House, the Senate would essentially freeze funding for SEEK, the core funding formula for schools.
The Senate cuts other areas as the governor proposed that the House had exempted from cuts, including constitutional offices (Attorney General, Secretary of State, Auditor, Treasurer, Agriculture), Kentucky Educational Television, Office for the Blind, Libraries and Archives, Board of Elections, Registry of Election Finance, Kentucky Center for the Arts, Commission on Human Rights, Commission on Women and the Executive Branch Ethics Commission.
Like the House and the governor, the Senate includes approximately nine percent cuts to other areas including behavioral health, community-based services, environmental protection, public health, aging and independent living, Kentucky Arts Council, Educational Professional Standards Board, natural resources, energy development and independence and the Kentucky Nature Preserves Commission 2.
The Senate budget deletes the House’s proposed additional $10.6 million each year to expand eligibility for child care assistance from 150 percent to 160 percent of the poverty level. The Senate also deletes an authorization included in the House budget of up to $10.5 million over the biennium for the fund that provides care for the uninsured at University of Louisville Hospital, as well as monies for colon, breast and cervical cancer screening 3.
The Senate budget eliminates funding for 44 new public defender positions both the House and governor had included to help with caseloads. As in the House budget and the governor’s proposal, there are again no raises for employees in the budget other than selected raises for a few occupations such as social workers and state police.
Contributes Similar Overall Amount to Pensions as House
The Senate agreed with the House in making significantly larger contributions to employee pensions than the governor proposed, with a contribution of $1.195 billion over the biennium compared to $1.123 billion in the House plan. That compares to $845.5 million in what the governor proposed.
The Senate somewhat changed the mix of funding to the pension plans compared to the House. The House included the full actuarially required contribution (ARC) to the Kentucky Teachers’ Retirement System (KTRS) over the biennium, while the Senate plan includes 88 percent of the KTRS ARC. The Senate plan puts over three times the amount the House does in additional dollars above the ARC to the Kentucky Employees’ Retirement System (KERS) (see graph below, which does not include base funding for the systems).
Source: KCEP analysis of HB 303 SCS.
The Senate also leaves $250 million in a permanent fund compared to $500 million in the governor’s plan and $0 in the House budget 4. The Senate leaves a rainy day fund balance of $371.5 million at the end of the biennium compared to $283 million in the House plan and $524 million in the governor’s budget (see graph below) 5. In total, The Senate leaves $336 million more in idle funds at the end of the budget period than does the House.
Source: KCEP analysis of HB 303 SCS.
The Senate’s budget is built with $634 million in fund transfers over the biennium, compared to $638 million in the House budget and $611 million in transfers contained in the governor’s plan. The Senate budget includes $580 million in new debt for capital projects compared to $549 million in the House plan and $625 million in the governor’s budget. In the Senate, that includes $50 million for a workforce development construction pool, which the House had not included in its budget but for which the governor had proposed $100 million. The Senate budget does not allow postsecondary institutions to issue debt on unauthorized, self-funded capital projects over $600,000, as the House had allowed.
Other Important Differences
- The Senate maintains that approximately half of coal severance money will continue going to the General Fund, with half going back to counties through a variety of programs and local revenue sharing. It includes no specific local projects as the House included. The House budget begins to shift more coal severance tax dollars back to counties and local spending, with a plan to make that transition complete over four years. Some of the programs previously funded with coal severance dollars, like Operation Unite and the SOAR initiative, are funded through other parts of the House budget.
- The Senate budget repeals prevailing wage on public construction projects, while the House budget does not.
- While the House had required specific funding amounts for certain programs within some of Cabinets, the Senate restores the discretion to the Executive Branch the governor had proposed.
- Dustin Pugel, “Fact Sheet: Need-Based Financial Aid Dollars Being Diverted to General Fund,” Kentucky Center for Economic Policy, February 23, 2016, http://kypolicy.org/need-based-financial-aid-dollars-being-diverted-to-general-fund/. ↩
- Anna Baumann, “House Budget Does Not Restore Many Crucial Services for Vulnerable Kentuckians,” Kentucky Center for Economic Policy, March 18, 2016, http://kypolicy.org/house-budget-not-restore-many-crucial-services-vulnerable-kentuckians/. ↩
- Jason Bailey, “Uninsured Costs at U of L Hospital Have Dropped Dramatically Because of Medicaid Expansion and Kynect, But Could Go Up with Changes,” Kentucky Center for Economic Policy, March 22, 2016, http://kypolicy.org/uninsured-costs-u-l-hospital-dropped-dramatically-medicaid-expansion-kynect-go-changes/. ↩
- Jason Bailey, “Why the House Budget Approach Is Better than a Big Set Aside of Idle Funds,” Kentucky Center for Economic Policy, March 18, 2016, http://kypolicy.org/house-budget-approach-better-big-set-aside-idle-funds/. ↩
- The House budget also includes some items in its budget as necessary governmental expenses that will reduce the final amount in the rainy day fund. ↩
“Today, a majority in the Kentucky House of Representatives took a positive stand for both the health of their people and the local economies they represent by passing House bills 5 and 6, which would keep Kynect and continue Medicaid expansion as is,” Jason Bailey, executive director of the Kentucky Center for Economic Policy, said. “Both Kynect and Medicaid expansion have been big successes when it comes to lowering our state’s uninsured rate, improving use of preventive care, injecting dollars into local economies and creating more health care jobs. We encourage the Senate to join in protecting Kentucky’s nation-leading health coverage gains.”
Uninsured Costs at U of L Hospital Have Dropped Dramatically Because of Medicaid Expansion and Kynect, But Could Go Up with Changes
Senate leaders have raised a concern about the House’s inclusion of up to $10.5 million in their budget over the biennium to help cover health care costs for the uninsured at University of Louisville Hospital. They argue that if the Affordable Care Act (ACA) was working so well, that appropriation wouldn’t be needed.
But a look at the data shows costs for the uninsured at the hospital have dropped dramatically since Kentucky created Kynect and expanded Medicaid, saving tens of millions of dollars for the state, the city of Louisville and the university.
The governor’s plans to shut down Kynect and make changes to Medicaid are one reason the state will need to continue putting money into the fund. Those changes could result in fewer Kentuckians with health coverage, driving costs for the uninsured back up.
The Medicaid expansion and other elements of the ACA have made a huge difference in how many University of Louisville Hospital patients have health insurance. The percentage who are uninsured dropped from 25 percent before Medicaid expansion to just 5 percent today, according to a presentation representatives made at the February 25 House Budget Review Subcommittee on Postsecondary Education.
Because so many more people have coverage, the amount the state, university and local government pay for the Quality and Charity Care Trust Fund has fallen to a fraction of its prior level, as shown in the graph below. The total state portion of these costs was only $1.6 million in 2015 and is projected to be around the same amount in 2016.
Source: University of Louisville presentation to House Budget Review Subcommittee on Postsecondary Education. Reimbursements are paid through appropriations by the state, Louisville Metro and the University of Louisville.
Kentucky is a national leader for its health coverage gains since the ACA became law. The state’s share of residents who are uninsured fell from 20.4 percent in 2013 to 7.5 percent in 2015, according to a recent Gallup poll — tying Kentucky with Arkansas for the nation’s biggest percentage point decline.
However, the governor’s plans to shut down Kynect and make changes to Medicaid expansion could increase the rate of uninsured over time. Transition from Kynect to a new system will cause disruption, and it’s unclear what level of support will be in place to help people sign up for the coverage they are eligible to receive. Kynect has operated an in-state call center and a community-based outreach network to achieve the gains to date. The most successful states in increasing coverage, like Kentucky, operate their own state-based exchanges but the governor plans to shift to the federal exchange.
Also, future changes to Medicaid the governor has discussed like those Indiana is piloting introduce new cost barriers that have the potential to increase the ranks of the uninsured. Past evidence from states shows that charging premiums to people who live paycheck to paycheck results in some forgoing coverage.
The work of getting people signed up for coverage is an ongoing process, and some inevitably fall through the cracks. That’s part of the reason the state must continue to fund the Quality and Charity Care Trust Fund. But another reason is that more people could end up uninsured due to the changes the administration is considering or putting into place.
In the 2013-2014 biennium, the state had to pledge up to $41.5 million for the Quality and Charity Care Trust Fund, far more than the $10.5 million the House is proposing for the new biennium (and considerably more than is actually being drawn down, which as mentioned is expected to total $3.2 million over the 2015-2016 biennium). Kentucky is saving significant dollars previously spent on the uninsured in its budget because of Kynect and Medicaid expansion, but will spend more in future years if fewer people are covered.
The House has the opportunity this week to pass House bills 5 and 6 and vote to maintain Kentucky’s momentum for better health and a stronger economy.
House Bill 5 would keep Kynect, the state’s nationally-recognized system for getting people the health coverage they are eligible to receive, a program that has led to the best coverage gains in the country. House Bill 6 would protect Medicaid expansion from harmful changes, like those being pursued in Indiana, that threaten to reduce access to coverage and care for many.
Here are some of KCEP’s resources for understanding the critical issues these bills address:
It’s Kentucky’s Lack of Coverage and Poor Health that Are Unsustainable, Not Medicaid
While the administration claims that Kentucky’s Medicaid program is “unsustainable,” in fact Medicaid is a big benefit to Kentucky as it fills critical coverage gaps, improves health, injects dollars into communities and saves money in the budget previously spent on the uninsured.
With Medicaid Expansion, Kentucky Health Care Job Growth Picked up in 2015
After modest growth in health care and social assistance jobs during the first year of Medicaid expansion, growth picked up at a rapid pace in 2015 according to Bureau of Labor Statistics data. The billions of additional federal dollars coming in to the state to provide care for the newly insured likely played a role.
Unanswered Questions about the Cost and Feasibility of Shutting Down Kynect
The governor has notified the federal government that he intends to shut down Kynect and shift Kentucky to the federal health insurance exchange for the next open enrollment period that starts this November. In addition to potential harm to Kentuckians, including higher premiums and fewer people covered, big questions persist about the cost and feasibility of making this transition.
Many Kentucky Workers Have Gained Health Insurance through the Medicaid Expansion, Are at Risk If Program Is Scaled Back
Many thousands of Kentuckians who work low wage jobs at restaurants, on construction sites, through temp agencies and at retail stores are among those who have gained health insurance because of Kentucky’s decision to expand Medicaid. These workers’ access to care is at risk if Kentucky takes steps backward on the expansion, potentially harming our economy and the health of our state.
A County-by-County Look at the Medicaid Expansion
A total of 425,782 Kentuckians were insured through the Medicaid expansion as of October 2015. By county, between 3.7 and 19.1 percent of the population were covered and a total of $2.7 billion from the Medicaid expansion flowed to providers. Especially benefitting is rural Kentucky.
8 Reasons Kentucky Shouldn’t DisKynect
Kynect, the state’s health insurance marketplace created under the Affordable Care Act, is widely viewed as a national model for its functionality and success in getting people signed up for health coverage. Reasons to keep Kynect include: 1) it works really well; 2) it was built with the input of a wide range of stakeholders and tailored to Kentucky’s needs; 3) it costs money to shut it down; 4) transition will be disruptive; 5) the federal exchange will lack the effective outreach efforts Kynect has built; 6) transition will cost Kentucky jobs; 7) it’s unclear what insurance choices Kentuckians will have; and 8) lower enrollment will cost Kentucky more in uncompensated care.
Indiana Approach to Medicaid Expansion Limits Access to Needed Care
The “Indiana model” for Medicaid expansion has been held up as a possible alternative for Kentucky, with supporters arguing that Medicaid recipients should have more “skin in the game” by paying premiums for services. However, such an approach could mean fewer people getting the care they need — making health problems costlier down the road and creating barriers to sustaining the health coverage gains Kentucky has made in recent years.