New Medicaid expansion plan in Kansas dilutes ‘poison pill’

TOPEKA, Kan. (AP) — A “poison pill” in Democratic Gov. Laura Kelly’s plan for expanding Medicaid aimed at reassuring wary Republican legislators wouldn’t actually end the expansion if the federal government backed off its promises to cover most of the cost.

Kelly has said her proposal is based on an expansion plan that passed in 2017 with large, bipartisan legislative majorities, only to be vetoed by Kansas’ then-conservative GOP Gov. Sam Brownback. But the new Democratic governor’s “working group” of Medicaid advisers suggested a key, one-word change when it comes what would happen if the federal government backed off its commitment to cover 90 percent of the expansion.

The 2017 bill said the state “shall” end expanded Medicaid health coverage for tens of thousands of Kansas residents if the federal government drops its funding percentage. Kelly’s proposal says the state “may” end expansion — meaning she or a future governor could opt to continue with less federal money.

Documents obtained by The Associated Press through an open records request show that an initial draft of Kelly’s proposed legislation contained the 2017 “poison pill.” Kelly’s advisers on Medicaid expansion suggested the weaker language and it changed before Kelly released her proposal to the GOP-controlled Legislature.

“The working group wanted to provide the state with some flexibility in managing the new Medicaid program, while also protecting the state’s finances should federal funding be reduced,” Kelly spokeswoman Ashley All said Monday.

It’s not clear how many legislators are aware of the change. Top Republicans remain adamantly opposed to Medicaid expansion, viewing it as costly to the state despite the promised federal funding, and no committee has had a hearing on Kelly’s specific proposal.

House Majority Leader Dan Hawkins, a conservative Wichita Republican, said if the federal government backed off its funding promises, “screaming and the gnashing of teeth” over ending an entitlement program would prevent state officials from doing it.

“The only way it can be shut down is if it’s forced by law,” he said.

Kansas is one of only 14 states that have not expanded their Medicaid programs or had voters approve a ballot initiative. Supporters argue that expansion would cover thousands of struggling families and boost troubled rural hospitals.

The 2010 federal Affordable Care Act encouraged states to expand Medicaid by offering to cover almost all of the cost.

With conservatives questioning how long Congress would stand by its promise, given federal budget deficits, Kansas’ 2017 bill stipulated that if the federal government’s share of funding dropped below 90 percent, the state was required to end the expanded coverage within a year. A poison pill has been included in a majority of expansion proposals since 2013.

“I think that’s going to have to be an element of any bill,” said Rep. Russ Jennings, a moderate Lakin Republican who supports expansion. “Because of the cost implications.”

Emails released to the AP show that members of Kelly’s team were working on a draft of her bill in December. The Medicaid working group met Jan. 18 in a Statehouse conference room, four days after Kelly took office.

A suggestion to change the poison pill language came from that meeting, according to notes circulated to members by email afterward by a Kelly staffer. The notes did not say who suggested the change, but “shall” became “may.”

“There were a lot of little tweaks that were done, but that was the only substantive change, at least in my mind, from the 2017 bill,” said April Holman, executive director of the pro-expansion Alliance for a Healthy Kansas and a member of Kelly’s group.

Rep. Kathy Wolfe Moore, a Kansas City Democrat and another working group member, said it wanted to avoid ending expansion because the federal government “went down one point” on its funding percentage.

But she said she would support a full-strength poison pill “if that’s the hold-up between passing Medicaid expansion and not.”