Governor, Senate Majority Leader announce compromise
proposal to lower healthcare costs for Kansas families

Bipartisan agreement paves way for both Medicaid expansion and reinsurance

TOPEKA – After weeks of negotiations, Democratic Governor Laura Kelly and Republican Senate Majority Leader Jim Denning today announced a compromise proposal to expand Medicaid while lowering health insurance premiums for Kansas families.

“This process is far from over, as there are still several critical steps to be taken by the Kansas Legislature,” Kelly said. “But today, Senator Denning and I are proud to stand together to propose a bipartisan compromise that will expand Medicaid and lower healthcare costs for Kansas families. This proposal includes elements of my plan, of Senator Denning’s plan, of the 2019 House plan, and of the bipartisan plan that passed both chambers in 2017.”

The compromise proposal includes key elements to address concerns raised from both parties, in both chambers:

• • Full Medicaid Expansion: The proposal includes a full expansion of Medicaid to 138% of the Federal Poverty Level (FPL) with a 90/10 match, to be effective no later than January 1, 2021.
  • Reinsurance: Pending Centers for Medicare and Medicaid Services (CMS) approval of a 1332 waiver and release of funding by the State Finance Council, the proposal includes a reinsurance program to be effective no later than January 1, 2022. The agreement also requires the Kansas Insurance Department to complete an actuarial study of the reinsurance proposal and submit to the State Finance Council.
  • Medicaid Funding: The proposal includes an annual hospital Medicaid expansion support surcharge of up to $35 million, which has been endorsed by the Kansas Hospital Association, to be effective July 1, 2021. This compromise proposal does not require a tax increase.
  • Promoting Personal Responsibility: The agreement includes a robust work referral program that promotes self-reliance for non-working Medicaid beneficiaries, while limiting costly administrative red tape that drives up overall costs to taxpayers. Enrollees within the expansion population will make a modest contribution for health services through monthly premiums of up to $25 per month, or $100 for a family of four, as proposed in House Bill 2066.  The bill does not contain any lockouts. Instead, it collects unpaid premiums through the state’s debt setoff program. A hardship provision is also included.
  • Rural Health Care Innovations: The proposal creates an advisory committee within the Kansas Department of Health and Environment to support rural hospitals in assessing viability and identifying new delivery models, strategic partnerships and implementing financial and delivery system reform to improve the health of rural communities.

“My top priority is to lower the cost of healthcare for Kansans across the board. We want to give as many Kansans health care coverage as we can, in the Medicaid market and the non-Medicaid market,” Denning said.

While this proposal is the most sweeping compromise offered since the debate over Medicaid expansion began in 2013, both Kelly and Denning underscored that more work remains.

“We’ll both be working with our respective caucuses in the coming days to get their feedback and buy-in,” Denning said. “But all sides can find something in this bill to like. That means it’s probably about as middle of the road as it can get.”

“This compromise was an important first step, but our work is not over yet,” Kelly said. “Legislators, many of whom were here today, have the ability to bring this over the finish line in the early days of the 2020 session. I am calling on them to do just that.”