Medicaid expansion leads to booming reimbursements, plunging uninsured rate in Kentucky

Larry Kissner, the commissioner of Kentucky’s Department of Medicaid Services, told a legislative committee in Frankfort last week that Kentucky’s decision to expand Medicaid not only dramatically increased the number of insured Kentuckians taking advantage of preventative screenings, but also the amount of Medicaid reimbursements received by health care providers, particularly hospitals.

One piece of new information revealed was the number of people who signed up for Medicaid through Kynect by the April deadline who are part of the state’s new Medicaid expansion: 290,000, which makes up 88 percent of the 330,000 total, meaning only roughly 40,000 were previously eligible for Medicaid and signed up through the so-called “woodwork effect.” Even though these 40,000 signed up through Kynect, this has not produced a boom in the number of Kentuckians signed up through traditional Medicaid, whom the state has to pay for 30 percent of their costs, as opposed to zero for those under the expansion. As you can see in the numbers provided below, the amount of people signing up for traditional Medicaid actually went down compared to last year:

kentucky medicaid

Kentucky’s Department of Medicaid Services has also provided this map that shows how the uninsured rate has plummeted within each county since 2012, assuming that 75 percent of Kynect enrollees did not previously have insurance (as indicated in their Kynect application):

kynect before and after

While this drop is staggering through the state, it is most pronounced in the four eastern Kentucky counties of Harlan, Letcher, Leslie and Perry, who went from 17-20 percent uninsured to less than 5 percent. These four counties went from some of the highest uninsured rates to the lowest in the entire state. Thanks, Obama.

As the Kentucky Center for Economic Policy noted from Kissner’s last presentation, this new population of insured Kentuckians is putting their new coverage to good use with a large increase in preventative screenings:

According to Commissioner Kissner, in the past year the utilization of an annual dental visit through Medicaid increased by 15.8 percent. Use of adult preventive services increased by 36.7 percent; breast cancer screening increased by 20.6 percent; cervical cancer screening increased by 3 percent; and colorectal cancer screening increased by 16.1 percent.

Kissner also provided numbers for the Medicaid reimbursements of health care providers throughout the state, particularly focusing on the largest beneficiaries: hospitals. Reimbursements went up in fiscal year 2014 (July 2013 through June 2014) for inpatient and outpatient hospitals, physicians and pharmacies from FY 2013, with the total jumping from $3.2 billion last year to $3.4 billion in 2014. The total reimbursements went up by $14 million for rural hospitals and $54 million for urban hospitals.

This increase is mostly due to the reimbursements from those now covered under the Medicaid expansion, which totaled $284 million in just the first six months of 2014. However, this figure is in reality even higher, since this most likely only represents completed claims through March. From these individuals covered under the expansion, hospitals received $135 million in reimbursements, while pharmacies received $77 million, physicians and primary care providers received $42 million, and other providers received $33 million. These new reimbursement totals for the expanded populations were most pronounced in urban hospitals, with the University of Kentucky Hospital receiving $15 million in reimbursements, University of Louisville Hospital receiving $11 million, Norton Hospitals receiving $11 million, and Jewish Hospital & St. Mary’s receiving $9 million.

While federal disproportionate share hospital (DSH) payments — to treat the indigent — will not be reduced until 2016, Kissner’s figures show that Medicaid reimbursements for hospitals through mostly the first three months of 2014 ($104 million) already outpace the total DSH payments for hospitals throughout all of FY 2013 ($97 million). So while these DSH payments will go down in future years, they will be more than made up for by the increase in insured individuals seeking treatment who can actually pay their bills, whether via Medicaid or private insurance.

While rural hospitals in Kentucky still face unique challenges that must be addressed, including how well Medicaid managed care is able to meet the increased demand for providers, the rosy estimates given by Gov. Beshear last year on the effects of embracing the Affordable Care Act appear to be coming to fruition. The question still remains whether Kentucky’s legislature will decide to continue these efforts next year, or whether a possible new Republican majority in the state House will decide to roll back the clock.

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13 Trackbacks

  1. […] For much more on the numbers and story behind that map, visit Joe Sonka at LEO Weekly: […]

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  3. […] at 5:32 on July 28, 2014 by rss@dailykos.com Jed Lewison Via Joe Sonka, take a look at what Kentucky’s uninsurance rates looked like before Obamacare—all the red […]

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  6. By Happy Hour Roundup - The Washington Post on July 28, 2014 at 6:01 pm

    […] Joe Sonka has some fresh data on what a spectacular success Medicaid expansion has been in Kentucky, with 290,000 new enrollees, more money for hospitals, and the rate of uninsured in some counties […]

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  10. […] Yet hundreds of thousands have signed up for coverage on the Kentucky exchange. Interestingly, as Joe Sonka has documented, the biggest drops in uninsured have occurred in eastern Kentucky — which is to say anti-Obama […]

  11. […] in the meantime are having to deal with more poor people with fewer and fewer resources.” As the new numbers released this summer by the Beshear administration show, hospitals have actually been pulling in […]

  12. […] at 10:49 on September 4, 2014 by rss@dailykos.com Jed Lewison First, take a look at county-by-county uninsurance rates in Kentucky before Kynect, its implementation of Obamacare: […]

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