Op-Ed: Cutting Back Medicaid Expansion No Solution to Budget Pressures

Governor Bevin has sent his proposed Medicaid changes to the federal government and now negotiations begin between his administration and the Department of Health and Human Services. Since Kentucky is a national leader in health coverage gains thanks to Medicaid expansion, a lot is at risk in these talks.

The federal government has made clear it simply will not approve the plan as presented because it includes barriers to health coverage that are contrary to the law. At the same time, the governor has suggested he may repeal expansion if it isn’t approved and argues changes must be made to “ensure long-term sustainability of the Medicaid program.”

But in truth, not only can Kentucky afford Medicaid expansion as it is, continuing it is an economic imperative for the Commonwealth. Cutting it back won’t lower costs, but just move where and when they show up while harming Kentucky’s health, economy and quality of life in the process. It’s important to look at the whole picture of the benefits and costs of Medicaid expansion to understand the full impact.

Savings in the proposed changes aren’t from new efficiencies but from causing people to lose coverage — 88,000 fewer Kentuckians would be insured at the end of 5 years. Coverage losses are the result of roadblocks the plan creates, including escalating premiums even for the very poor, lockout periods for those who don’t reenroll and work and community service requirements.

And these so-called savings are negated by new costs the plan introduces.

First is the loss of money to the state economy. Most of Medicaid is paid for by the federal government, meaning $380 million of the $446 million in average annual savings touted in the plan is federal money Kentucky would just be giving up. State leaders would salivate at the prospect of an outside business that would spend $380 million a year in the Kentucky economy, but here we’d be saying “no thanks.” And in this case it’s an industry that not only creates jobs in hospitals and doctors’ offices, but improves health in a place that sorely needs it and saves us state dollars we were previously spending on public health, mental health, substance abuse and care for the uninsured.

What’s more, the much smaller $66 million in annual state savings from the plan quickly evaporates on closer look. Kentucky would have to pay for and manage a complex new bureaucracy under the plan including two health savings accounts per enrollee and systems to track small monthly premium payments, work requirements, health and financial literacy classes and other components. We can learn from the experience of other states here, including those that have abandoned premiums in Medicaid because it costs more to collect them than the revenue generated.

In addition, the loss of coverage means fewer Kentuckians will get the preventive care shown to save money in the long run as chronic conditions are treated and health problems are caught earlier. For example, the plan eliminates preventive dental benefits, but when California did so it saw emergency room visits for dental pain shoot up 68 percent, leading the state to reverse the decision. Also, dental pain is a major gateway to opioid addiction, making getting rid of these benefits more fuel to Kentucky’s raging drug crisis.

Trying to save money in Medicaid by reducing the number of people covered is like squeezing a balloon — it doesn’t make it smaller, but just changes its shape.

In fact Medicaid expansion is a great deal for Kentucky financially and in terms of health. As for Kentucky’s serious budget problems, there are commonsense solutions pursued in other states that can shore up our budget while making the Medicaid expansion an even better deal.

For example, while expanding Medicaid many states have adjusted the provider tax hospitals pay in recognition of the tremendous benefit hospitals receive from more insured patients. Not only has Kentucky not adjusted its tax, but the tax is frozen so it’s paid based on the revenues hospitals received in 2006 rather than the much higher revenues they receive today.

A package of changes like removing the cap on the hospital tax (which is typically accompanied by an uptick in the rates paid to hospitals), increasing Kentucky’s outdated tobacco tax and raising the state’s minimum wage would generate enough revenue and cost savings to fully pay the state’s match for Medicaid expansion. Those changes would further improve Kentucky’s health and economy while making the coverage reductions in the governor’s plan unnecessary.

Our budget challenges don’t mean we have to throw up our hands and say we can’t afford investments like Medicaid expansion that move Kentucky forward. Good solutions are out there that make the entire Commonwealth better off.

SNAP Works for Kentucky’s Children

The Supplemental Nutrition Assistance Program (SNAP) helps Kentucky families put food on the table. But we now know that it accomplishes much more than that.

Research increasingly shows that SNAP, formerly known as Food Stamps, can ward against the long-term effects on children of experiencing poverty, abuse or neglect, parental substance abuse or mental illness, and exposure to violence — events that can take a toll on their well-being as adults.  As a new Center on Budget and Policy Priorities report finds, SNAP helps form a strong foundation of health and well-being for low-income children by lifting millions of families out of poverty, improving food security, and helping improve health and academic achievement with long-lasting consequences.

SNAP delivers more nutrition assistance to low-income children than any other program.  In 2016, SNAP will help about 20 million children each month — about 1 in 4 U.S. children — while providing about $30 billion in nutrition benefits for children over the course of the year. In Kentucky, SNAP helps about 318,300 children each month, or about 1 in 3 of our state’s kids.

snap-ky

The amount of money SNAP provides for purchasing food is modest, but well-targeted to the families that need it the most. While participating families with children in Kentucky receive an average of $383 each month, those with incomes below 50 percent of the poverty line get $486. That’s one reason why SNAP helps lift more children out of deep poverty than any other government assistance program.

In fact, much of SNAP’s success can be attributed to its design, including a consistent national structure that effectively targets food benefits to those with the greatest need; eligibility rules and a funding structure that make benefits available to children in almost all families with little income and few resources; a design that automatically responds to changes in the economy; and rigorous requirements to ensure a high degree of program integrity.

SNAP is helping to give thousands of Kentucky children the foundation they need to succeed. After an initial boost to the program in the wake of the recession, the program has been cut back and the phase-in of rules like work requirements bring new challenges for some low-income Kentuckians even while the economy is yet to fully recover from the recession. In the future, efforts to reform or enhance it should build on its effectiveness in protecting the well-being of our children — and those nationwide — and preserve the essential program features that contribute to that success.

 

Comments to Washington on Proposed Medicaid Changes were 9 to 1 Against

The period to give input to the Cabinet for Health and Human Services (HHS) on Governor Bevin’s proposed changes to Medicaid ended last Saturday with a total of 1,749 responses. The responses were overwhelmingly in opposition to the changes the governor proposed and in support of the program as it currently exists, as shown in the graph below:

waiver-comments-pie-chart

Source: KCEP Analysis 1 of Comments made to HHS on Kentucky’s 1115 Waiver Request (https://public.medicaid.gov/connect.ti/public.comments/questionnaireResults?qid=1888067)

After removing identical responses submitted from the same commenter, responses that weren’t related to the waiver request and responses that were left blank, there were a total of 1,643 individual comments. Of those:

  • 1,483 were unfavorable, or 90.1 percent
  • 135 were favorable, or 8.4 percent
  • 25 were mixed, or 1.5 percent

To put the number of comments on Kentucky’s proposed waiver in context, the last two waivers HHS responded to were Ohio and Arizona, which had 103 and 97 federal comments respectively.

A large portion of the “unfavorable” comments were personal stories from people who received treatment because of the Medicaid expansion or had a friend or loved one whom they felt was better off because of their Medicaid coverage. Other “unfavorable” responses took issue with specific aspects of the waiver request such as premiums, work requirements, the lock-out period and added administrative complexity and cost (including our own submitted comments here). Kentucky’s status as a leader in Medicaid expansion was reflected in the number of national organizations who submitted detailed comments in opposition, including:

  • The American Diabetes Association
  • The American Lung Association
  • The Center on Budget and Policy Priorities
  • Enroll America
  • Families USA
  • The Georgetown University Center for Children and Families
  • March of Dimes
  • The National Alliance on Mental Illness
  • The National Employment Law Project
  • The National Health Law Program
  • The National Women’s Law Center
  • Service Employees International Union

The “favorable” comments focused mainly on the cost-sharing elements of the waiver. The relatively small number of individuals who urged that HHS accept the waiver expressed support for things like premiums, co-pays and employer sponsored insurance premium assistance. Only three organizations wrote in support of the waiver. The 25 “mixed” responses varied widely in what they supported and cautioned against.

The 9:1 ratio of unfavorable to favorable responses is well founded. The waiver would not likely save the money it claims, would cover fewer people, and would roll back the historic healthcare gains we’ve made as a Commonwealth. As negotiations begin between officials from Kentucky and Washington, the outpouring of concern should be a key factor to consider.

 

  1. Methodology: All comments that testified to the positive impact of the current Medicaid Expansion as is, expressed concerns over the proposed changes, and/or asked HHS to reject the waiver were categorized as “Unfavorable;” All comments that expressed support for the changes and/or asked HHS to accept the waiver were categorized as “Favorable;” All comments that expressed concerns over some elements of the waiver and support for others were considered “Mixed.” Any responses that were identical and submitted from the same commenter, left blank, or were not in reference to Medicaid and the proposed changes were omitted from the analysis.

Roundup on Kentucky’s Criminal Justice Reform Needs and Options

Kentucky’s criminal justice issues have been in the news recently. The majority of Kentucky’s full-service jails are at or over capacity, and the state is considering reopening private prisons as a temporary solution to jail overcrowding despite the negative aspects of doing so, which have led the U.S. Justice Department to end its use of private prisons. A related issue is the consistent denial of bail credit in Kentucky, which contributes to the jail overcrowding problem by keeping people in jail pre-trial who should qualify for release; bail credit is when an inmate who cannot afford the bail amount earns $100 each day spent in jail toward bail.

Clearly the state is in need of reforms to its criminal justice system, and the Criminal Justice Policy Assessment Council (CJPAC) appointed by the governor to produce recommendations is holding its sixth meeting this morning. Here’s a roundup of our blogs on some of the key issues:

  • Kentucky’s inmate population continues to rise, which has an impact on individuals and families as well as the state budget.
  • The state’s recidivism rates are high and have been increasing; this means too many are returning to prison within two to three years after release.
  • There are racial disparities in Kentucky’s criminal justice system that could be addressed with reforms.
  • HB 463, the state’s criminal justice reform legislation in 2011, has had a positive impact that additional reforms can build on.
  • Representative Yonts’s criminal justice reform bill, which was presented at last week’s Judiciary meeting, would save the state money and reduce recidivism.
  • A number of promising reform options are being considered by the CJPAC.

Today’s CJPAC meeting held at 10 am in Capital Annex Room 171 will include a presentation on the parole board as well as updates from work groups. The next CJPAC meeting will be October 26th at 11:00 am at Little Sandy Correctional Complex.

Op-Ed: Decisions Shouldn’t Be Made Based on False Choices

This column originally ran in the Courier-Journal on Oct. 20, 2016.

When it comes to the public investments that keep us healthy, educated and safe, increasingly Kentuckians are presented with a false choice in Frankfort.

We’re told that to pay down the debt in our pension systems, we can’t afford the access to health coverage provided by Medicaid expansion, or investments in our universities and community colleges, or other critical services.

But the truth is we have more than enough money in our Commonwealth to invest in vital public services, but we lose a growing share of it through holes in our revenue stream. In fact, it’s become so bad, Kentucky loses $12 billion a year due to a wide variety of tax breaks while only collecting $10 billion in revenue for public priorities like education, health and more.

Some of the special interest tax breaks are big, draining hundreds of millions of dollars from our coffers. Some are smaller, draining just a few hundred thousand or a couple million at most. But combined, it means less investment for all of us.

When we all chip in – corporations and the wealthy included – we’re able to improve our schools, roads and other public services. Eliminating tax breaks allows us to better fund education AND pensions, as well as other priorities. And the changes don’t have to be complex.

For example, in order to help pay the 10 percent of the cost of Medicaid expansion the state will soon make, we could end a break in the “provider tax” on our hospitals, which is allowing them to still pay the same taxes they paid in 2006. That’s despite the fact Medicaid expansion has led to billions of dollars flowing into our hospitals and big savings on money they used to spend on the uninsured.

In order to support investments in a stronger state and boost our fiscal health, we could also expand the sales tax to luxury services – like limos, private country club memberships and armored car services that the majority of Kentuckians don’t use. We could close loopholes that allow corporations to move their profits around to avoid paying income taxes in our state. And we could trim inefficient economic development tax breaks for profitable industries. Spending less on special interest tax breaks would allow us to spend more on the smart investments that benefit us all.

Thankfully, a coalition of nearly 40 organizations and growing has formed to encourage our state leaders to clean up the tax code so we can better invest in our communities. You can find out more about it at www.kentuckytogether.org.

The budget choices our leaders must make are always about priorities. But too often that’s meant pitting critical investments like education against critical investments like health. But reexamining our priorities also should mean bringing new scrutiny to the tax breaks that get a big chunk of our state’s resources. Are they more important than the investments needed to create thriving communities?

Honestly, it’s not that hard of a choice.

 

Kentuckians Voice Concerns Over Medicaid Changes as Comment Period Closes

Promising Reform Options Being Considered by Criminal Justice Policy Assessment Council

The state’s Criminal Justice Policy Assessment Council (CJPAC) is developing ideas in the areas of drug policy, prevention, jail reform, penal code reform, reentry, recidivism reduction, and probation and parole reforms. At last week’s CJPAC meeting, work groups addressing those issues described some of the reforms they are considering as recommendations to the administration and legislature.

Here are several promising reforms under consideration:

Expanding drug courts. Drug courts target criminal defendants and offenders who have substance abuse problems. They are designed to reduced drug use relapse and recidivism through graduated sanctions and incentives, substance abuse treatment and various rehabilitation services. The National Institute of Justice conducted an evaluation and found that participants in adult drug courts reported less criminal activity and had fewer re-arrests; they also reported less drug use and were less likely to test positive for drug use. Treatment costs are higher for participants in drug courts, but with less recidivism they actually result in a savings of an average of $5,680 to $6,208 per offender overall. While Kentucky does have drug courts, there are no drug courts for juveniles or at the district level. According to Justice and Public Safety Cabinet Secretary John Tilley, juvenile drug court “met its demise” in Kentucky because of funding problems. Expanding drug courts in the state could have a positive impact on the state’s drug problems and recidivism rates.

Creating a new gross misdemeanor classification. Classifying some non-violent offenses currently classified as a Class D felony, the lowest level felony, instead as a “gross misdemeanor” would mean less time incarcerated for some offenders, which has a positive effect on individuals and families and also saves the state money; in addition, gross misdemeanor offenders would not face the lifelong consequences of a felony conviction.

Raising the felony theft threshold. Currently theft in Kentucky is considered to be a felony if it is for more than $500. However, at least 30 states set the threshold at $1,000 or higher. Like with the creation of a gross misdemeanor classification, such a reform would reduce the number of Kentuckians charged with a felony and therefore the amount of time spent incarcerated, among other consequences associated with a felony conviction.

Making reforms to the bail system. An issue highlighted by Secretary Tilley is money bail, the practice of pre-trial release from jail being contingent on a defendant’s ability to afford a monetary payment, which means those with low incomes remain in jail while those with higher incomes can return home to await trial. Another issue is that many inmates who can’t afford to pay bail remain in jail pre-trial and are not granted bail credit, which would apply $100 per day spent in jail toward bail.

Reforming Persistent Felony Offender (PFO) law. With Kentucky’s current PFO law, if a prosecutor pursues an enhancement of a felony charge for an offender who has previously been convicted of any felony crime, it is mandatory that it be applied. With a PFO 2nd Degree sentence enhancement (which applies to offenders with one previous felony) a Class D felony with a 1 to 5 year sentence becomes a Class C felony with a 5 to 10 year sentence. With PFO 1st degree (which applies to offenders with at least two felonies) a Class D felony charge becomes a Class B with a sentence of 10 to 20 years. As noted by former UK professor Robert Lawson, “The long reach of this law absolutely guarantees inmate population growth and resulting stress for prisons and jails.” Options for reform include letting a jury decide whether or not to apply a PFO enhancement, merging PFO 1st and 2nd degree, and/or not applying PFO to the nonviolent felonies that are not eligible for expungement.

Reducing statutory barriers for occupational requirements. Currently Kentucky law prevents many occupational licenses in Kentucky from being issued to those with a criminal background even if the offense is unrelated to the job.

Increasing focus on graduated sanctions for probation and parole and institute presumptive parole for some offenses. While HB 463 made some improvements in this area, too many on probation and parole end up incarcerated for minor violations of their supervision. In addition, parole rates are low even for low-risk offenders; presumptive parole would mean that those incarcerated for certain offenses would be automatically paroled at a certain point in their sentence.

The CJPAC will continue its conversations about needed reforms to Kentucky’s criminal justice system at their next meeting, October 11 at 10 am in Capital Annex Room 171.

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