New report estimates Medicaid expansion could save Kansas employers up to $80.6M

Medicaid expansion efforts have been rebuffed in the Kansas Legislature, but a new report indicates employers could save between $39.6 million and $80.6 million each year if the expanded program were implemented. (Submitted)

TOPEKA — A new report indicates employers in some of Kansas’ most critical industries could save tens of millions of dollars a year if the state were to expand Medicaid.

The Kansas Health Institute report indicates private-sector employers would save between $39.6 million and $80.6 million if Kansas opted into Medicaid expansion. Kansas businesses currently employ about 139,000 people in industries like health care, food services and manufacturing, who would qualify with the expansion of KanCare, the program through which the state administers Medicaid.

April Holman, executive director for the Alliance for a Healthy Kansas, also noted several non-financial benefits tied to data from other states that have expanded their program.

“Employees in expansion states have reported that the because of access to needed care like medication and treatments, particularly in the case of behavioral health needs, like mental illness and substance use disorders, they were much better equipped to continue their work and to be more productive in that work,” Holman said.

The Alliance for a Healthy Kansas reviewed key findings from KHI’s 2021 Medicaid Expansion and Main Street report in a virtual news briefing earlier this week. Holman was joined by a business leader from Overland Park to visualize how potential Medicaid expansion would play out from a business perspective in Kansas.

Democratic Gov. Laura Kelly has pushed Medicaid expansion under the 2012 Affordable Care Act as a top policy priority. Two attempts to tack on bill amendments expanding Medicaid were rebuffed in the House and the Senate earlier this year.

Thirty-eight states have passed or implemented Medicaid expansion measures, including all bordering Kansas state. Proponents of expansion argue expansion would serve between 120,000 to 160,00 people across the state.

A provision in the ACA requires the federal government to cover 90% of a state’s costs of increased coverage after expansion. This means Kansas, to date, has turned down billions of dollars in federal funds.

According to the KHI report, the occupations that stand to benefit most from expansion include waiters, teaching assistants, nursing assistants and cashiers. Several industries stand to save millions through expansion, including agriculture, which the report estimates would save between $2.3 million and $4.7 million.

Brad Stratton, president of Overland Park Wealth Management, said Medicaid expansion would be a great example of a public-private partnership benefiting both employers, employees and the state economy.

“I think about the ripple effect that takes place across our economy, because the savings that these businesses would receive from not having the expenses of the insurance costs, as well as some of the penalties incurred,” Stratton said. “Those dollars can then be used for additional employment and hiring, increasing wages and overall business expansion.”

In rejecting expansion attempts this session, leadership in both the House and Senate indicated they had little interest in amending the program to include “able-bodied” Kansans. Expansion would cover those earning up to 138% of the federal poverty level, and their children.

“It is incredibly important to preserve Medicaid for the vulnerable Kansans for whom it was intended,” Senate President Ty Masterson said after the Senate rejected an amendment earlier this session. “The best way to improve access to health care is to create more choices for Kansans by removing barriers to competition and removing the regulations that drive up the cost of health care.”