Saturday, August 9, 2014

Kansas only state to increase number of uninsured: A how NOT to do it strategy

The title of Alan Bavley’s article, “Kansas is only state to see an increase in its uninsured rate, survey says”, (Kansas City Star, August 5, 2014) kind of says it all. It could be seen as a victory by some. Four years after the passage of the Affordable Care Act (ACA), aimed at expanding health coverage to more Americans by a combination of strategies including the creation of both state-run and federally-run (for those states that chose not to run their own) insurance exchanges to match people seeking coverage with insurance companies and subsidizing premiums for the moderately low-income, and expanding Medicaid for the very low-income, Kansas has succeeded in actually reducing the number of people covered!

The adult uninsured rate in Kansas rose from 12.5 percent last year to 17.6 percent during the first half of this year, giving the state the seventh-highest rate in the nation, according to data collected as part of the Gallup-Healthways Well-Being Index…. in other states uninsured rates declined or remained unchanged. Kansas was the only state with a statistically significant increase in the percentage of uninsured residents.

One could construct a fantasy out of whole cloth demonstrating how this proves why the opponents of the ACA were right all along; that it is not increasing health care coverage because it is evil and socialist, and that the increased costs for some people, along with cuts in the number of employed folks because of policies that do not always support “job creators” (read: very rich people) have decreased our employer-based insured group. Of course, that would be incorrect, but I expect to see it anyway.

In fact, those governing my state have worked very hard to make this happen. Governor Brownback and most of the state legislature are strong opponents of Obamacare, and have done what they could to make it not succeed. When the Supreme Court ruling allowed states to opt out of expanding Medicaid, Kansas did so, eliminating the very poor (under 133% of poverty) from the method the law intended for them to receive coverage. Kansas also chose not to develop a state-run insurance exchange and pu up as many obstacles as it could to the federally-run one. One of two Court of Appeals decisions (discussed in this blog in ACA: Where are we? And where should we go?, July 27, 2014) ruled that subsidies could be available only to enrollees in state-run exchanges (which Kansas doesn’t have); it hasn’t gone into effect yet, because another district’s Court ruled the other way, so we will have to wait for the Supreme Court to decide, but if it is upheld would bolster the number of Kansans not getting insurance.

But a decrease in the number of insured? The only one? Surely that is a notable accomplishment. How did we pull that off? “’It’s eye-popping. Kansas really sticks out,’ said Dan Witters, research director for the Well-Being Index, an ongoing national poll that surveys people’s health, relationships and finances.” For starters, it could, possibly, not be exactly true, but a data anomaly of the survey somehow. This is basically the position of the state’s Insurance Commissioner, Sandy Praeger, who said

…the number “appears to be an anomaly that needs more review. To have the uninsured jump that much in one year would be unprecedented.” The uninsured numbers in Kansas have hovered around 12 to 13 percent for many years, Praeger said, adding, “We will try to find out where the discrepancy is.”
This is worth noting, as Praeger is one of the few honest, trustworthy, and non-ideological members of state government in Kansas. Note that she does not claim that it is a liberal lie, or that it is a good thing, but just that it is inconsistent with previous data and she will try to find out why there is a discrepancy. If that is the reason, I’m sure she will.

But there are reasons to think that the numbers may not be inaccurate, even if they turn out not to be quite as bad as this survey indicates. Since the election of Governor Brownback in 2010, and with the support of the legislature, taxes in Kansas have been slashed, particularly income tax rates on high-income people and corporations and business taxes. The motivation was a profound belief in supply-side economics, that tax cuts would stimulate job growth.  Unfortunately, it has not. Job growth in Kansas has been more sluggish than in the country as a whole, and the state is facing enormous deficits. Cuts in spending have been dramatic, but the problem is, in fact, on the supply side – not enough tax revenue.  People don’t have jobs, and thus often don’t have enough income to qualify themselves for the exchanges, even if subsidies are allowed by SCOTUS to continue. The state has a very large number of undocumented workers (and most are indeed working, or in families of people working) who would not be eligible for coverage by any part of ACA, and can only get it if their employers pay for it. Which many do not.

While many states with Republican governors have pursued many of the same tacks as Kansas, including limiting the impact of ACA and cutting taxes, Kansas has been in many ways a test case for these strategies, even more than Wisconsin, because of its strong Republican tradition. Americans for Prosperity has a very strong political and financial influence in the state, and it is heavily financed by the Koch brothers whose Koch Industries is based in Wichita, Kansas (where Charles Koch still lives). Cutting taxes for the wealthy and corporations, and blocking any opposition to fossil fuel expansion, is the cornerstone of state politics, not ensuring the health or well-being of its residents.

In a larger sense, however, this is more than a story about Kansas. It may be the only state with a statistically significant increase in uninsured in the last year, but it is far from the state with the largest percentage of uninsured. Many other states that have not expanded Medicaid, and cut social services, have similar situations. Sadly, of course, many of these states (particularly in the southeast) started pretty far down, much worse than Kansas did, and have dug themselves deeper in the hole. The real story, I think, is in the states that, despite being southern and conservative, have chosen to expand Medicaid, and have seen real benefit for their people.

The Gallup poll found that the 10 states with the largest reductions in uninsured rates this year had all expanded their Medicaid programs and had either created their own exchanges or partnered with the federal government on an exchange. Arkansas saw the steepest decline, from 22.5 percent uninsured in 2013 to 12.4 percent this year. Kentucky was second with a decline from 20.4 percent uninsured to 11.9 percent.


Good policies can actually help. The state with the actual highest rate of uninsured people is Texas. “Look out, Texas,” Governor Brownback stated in announcing his original tax cuts, “here comes Kansas!”  He was talking about job growth, which we haven’t achieved, but we are making much more progress on denying people access to healthcare coverage.

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