Governor seeks to pay for Medicaid expansion in Kansas by legalizing medicinal marijuana

OVERLAND PARK — Gov. Laura Kelly shook up debate about Medicaid expansion in Kansas by proposing Monday the state finance extending health care to as many as 165,000 low-income Kansans with revenue from legalizing medicinal marijuana.

Both political issues have been debated in the Kansas Capitol for years, but opposition among Republicans stalled movement on marijuana and Medicaid policy embraced by dozens of states. One objection from skeptics of Medicaid expansion has been the cost to Kansas, which would be obligated for 10% of new expenditures with the federal government covering the remaining 90%.

“In the face of the worst health crisis our country has seen in a century, I’m even more committed to delivering health care, jobs, federal dollars and protections for our hospitals to our state through expansion of Medicaid,” Kelly said. “By combining broadly popular, common sense medical marijuana policy with our efforts to expand Medicaid, the revenue from the bill will pay for expansion.”

Kelly said the administration’s proposed bill would make Kansas the 48th state to adopt a medical marijuana law. Thirty-eight states and the District of Columbia have expanded Medicaid. She said polling in Kansas indicated about 70% of Kansans supported medical marijuana and Medicaid reform.

The governor’s bill would establish a regulatory framework for cultivation, testing, distribution, prescription and purchase of medical marijuana. It has been modeled after Ohio’s approach and would be similar to a strategy proposed by House Republicans, Kelly said. The budget the governor submitted to the Legislature in January included money to handle Medicaid expansion for six months, which would give the state time to implement the marijuana initiative.

Kelly said one estimate indicated the state could receive at least $50 million annually through legalizing medical marijuana, which would be sufficient to cover a Medicaid program.

Medicaid island

Broadening eligibility for Medicaid under the Affordable Care Act — a step taken by the four states surrounding Kansas — has been a potent source of controversy since it was signed into law in 2010 by President Barack Obama. Kansas Govs. Sam Brownback and Jeff Colyer joined with the GOP-led House and Senate to block expansion of eligibility for medical services under KanCare, the state’s privatized version of Medicaid. KanCare serves approximately 400,000 Kansans, and the reform would extend that program’s reach to between 130,000 and 165,000 adults and children.

Legalization of medical marijuana appeared to have more traction among Republican legislators in Kansas who consider it a practical, humanitarian step on behalf of people with chronic illness. Bills previously introduced in the Legislature would regulate access to medicinal quantities of marijuana that would be available only with a physician’s prescription. Opposition remains among lawmakers who don’t believe any form of marijuana should be legal.

Kelly, who took office in 2019, has made Medicaid expansion one of her top legislative priorities. The Democratic governor also has been a proponent for medicinal marijuana. She said recreational marijuana should be considered, but didn’t believe Kansas was ready for that step.

In Kansas, legislation to expand Medicaid passed in 2017, but Brownback vetoed it. A Medicaid expansion bill passed in the Kansas House during 2019, but died in the Senate. GOP-legislative leadership has otherwise effectively stalled expansion.

Lt. Gov. David Toland, who also serves as secretary at the Kansas Department of Commerce, said there was an economic development element to the Medicaid debate.

“Kansas has no business giving companies even one reason to look elsewhere — and I can say, unequivocally, that the availability of health care and well-being of all Kansans matters a great deal to companies considering places to locate and grow,” Toland said.

Work requirement

Under previous Medicaid proposals, the state would secure resources for its share of expansion costs with a surcharge paid by Kansas hospitals and through a “reinsurance” initiative that would allow the state to capture premium savings in the ACA marketplace that otherwise would go to the federal government. Kelly said the plan was to set those two revenue streams aside and dedicate medical marijuana revenue to cover the costs.

The bill would mandate the secretary of the Kansas Department of Health and Environment collect information from Medicaid applicants regarding employment history. Unemployed or underemployed individuals would be referred to the Kansas Department of Commerce or the Kansas Department for Children and Families for assistance with locating job opportunities through work referral programs.

Individuals taking part in the expanded Medicaid system would pay a monthly premium not to exceed $25 per person or $100 per family, with a provision to grant exceptions based on financial hardship. The proposed legislation would require premiums that went more than 60 days unpaid would be referred to an established debt collection program through the Kansas Department of Revenue.

Tracey Osborne Oltjen, president and CEO of the Overland Park Chamber of Commerce, said companies and employees throughout the state would benefit from access to affordable health care.

“From a business perspective,” Oltjen said, “that’s why Medicaid expansion is so important. Until we expand Medicaid in Kansas, we risk falling further behind our neighbors. We should not stand as an island on this issue, creating expensive challenges for our residents and our businesses.”

Eager to expand

Other Kansas organizations that lobbied for deepening the state’s health services through Medicaid responded affirmatively to the governor’s renewed call for Medicaid expansion.

April Holman, executive director of the Alliance for a Healthy Kansas, said expanding Medicaid was one of the most cost-effective tools the state can use to protect residents, health care providers and the economy during the COVID-19 crisis and later as the state rebuilt its economy.

Medicaid expansion has the potential of delivering hundreds of millions of dollars to the state, said David Jordan, president and CEO of the United Methodist Health Ministry Fund.

“In the midst of a once in a century pandemic, now more than ever, Kansans and Kansas businesses need the state to expand Medicaid, which is why we applaud Gov. Kelly and a bipartisan group of legislators who are working tirelessly to expand coverage. It’s time to expand KanCare. We can’t afford to wait another year,” Jordan said.

Christina Cowart, grassroots manager for the American Cancer Society Cancer Action Network, said thousands of Kansans had lost jobs, had work hours slashed or otherwise faced economic hardship during the COVID-19 pandemic. Many people, including those with cancer, lost employer-sponsored health insurance and were forced to join ranks of the uninsured, she said.

“Providing these hard-working state residents a clear path to comprehensive and affordable health insurance through Medicaid will help ensure that more people can prevent, detect and treat cancer before it’s too late,” Cowart said.