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.

Poverty and Uninsurance Diverge: So let’s solve the problem!

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Wyandotte and Johnson counties form the Kansas side of the Kansas City metropolitan area. Wyandotte, mainly Kansas City, KS, where I live, is an old “rust-belt” inner city, packing-house industrial city, and is the poorest county in Kansas. Johnson, to its south, consists of older inner suburbs and newer, were-recently-farmland suburbs, and is the richest and most populous Kansas county, with more than 3 times the population of Wyandotte. In Johnson County, only 14% of the population is below 200% of the poverty level, compared to Wyandotte County’s 44%, but it actually a slightly larger absolute number (73,200 to 67,400) because of Johnson County’s larger population. More interesting is the uninsured rate; while it has fewer than 10% more people under 200% of poverty, Johnson County has 2.5 times as many uninsured people as does Wyandotte County.

This means, obviously, that there are many non-poor uninsured people, and this is a national phenomenon. For most of this century, poverty and uninsurance rates tracked together. But in the late 1990s, with poverty rates decreasing, uninsurance rates continued to rise. With the recent recession, both have climbed, but uninsurance is rising at a higher rate. (See graph).

This dissociation between poverty and uninsurance is a very troubling phenomenon; while it is bad enough for poor people to not have financial access to health care, more and more of the uninsured are not poor.

Thus the case for health reform: let’s do something about this. Let’s dissociate the “privilege” of having health insurance from being employed by an entity large enough to afford to provide it, and make sure everyone has financial access to high quality care. Unfortunately, the current plans in the Congress will not do so. The recent assurance by Senate Majority Leader Reid that the Senate bill will contain a “public option”, as will the House bill, obscures the fact that the public option it contains will be weak; in an ostensible effort to not give the public option an “unfair advantage” over private insurance plans, it has been given an unfair disadvantage – it will not be able to use its public status to set rates for provider compensation, as does Medicare, or for drug prices, as Medicare (under the bad restrictions of Part D) also does not.

This is, of course, bizarre: why should anyone, other than the insurance companies themselves, care that they can continue to make money hand over fist while providing inadequate coverage, and not be held accountable by having to compete with a public option that provides comprehensive coverage and does not have to make a profit? Oh yes, the senators and congressmen who get contributions from those insurance companies, yes, but the rest of us? Why should we care? And why should we not insist that our representatives represent our interests, and not those of the insurance companies?

Much of the opposition – not only to single payer, but to a “public option” has been based on, not to put too fine a point on it, lies spread by opponents who are mostly on the payroll of insurance companies. These lies have led people to think that they will lose the excellent medical care, and extensive freedom of choice that they have under the current system (oh, whoops, forgot, they don’t!) if we have a government program. Writing in the Oct 28, 2009 issue of JAMA, Joseph S. Ross and Allan S. Detsky look at “Health care choices and decisions in the United States and Canada”[1], choosing Canada specifically “…because the Canadian health system, with much greater government involvement, is often publicly portrayed in the United States as limiting choice.” They review the restraints on choice of insurance plans, hospitals and doctors, and diagnostic testing and treatments, and conclude, modestly that “…there is clear evidence that for Canada’s health care system, less choice in insurance coverage (although guaranteed) has not resulted in less choice of hospitals, physicians, and diagnostic testing and treatments compared with the United States. In fact, there is arguably more choice.” More than “arguably”, I’d say, based on the evidence provided in their piece.

The fewer obstacles that are placed in the way of services to people, the more efficient they are, the more they are appreciated, and the less they affront the dignity of the people receiving them. When comprehensive services are provided to everyone, there is no need to put people through rigorous screening to see if they are poor enough, or don’t have other insurance, or are deserving enough to receive them.

Ironically, or maybe not, the same legislators who decry government bureaucracy are those who demand that bureaucracy through establishing restrictions on programs that help people. This includes, of course, income and citizenship verification for those seeking help with health care; after all we wouldn’t want people to “cheat” and avail themselves of public services when they didn’t “need” them, when their incomes exceeded the 200% of poverty, or 100% of poverty, or 38% of poverty* that we require. If there were one program for everyone, a single-payer or Medicare-for-all program, then all this bureaucracy could be eliminated. We wouldn’t have to screen people, because everyone would be eligible. It would be everyone’s program.

I have written before about the enormous administrative cost involved in both insurance companies (payers) and providers having huge teams of people to try to deny payment or get paid; in one more way, a single-payer plan would eliminate administrative waste and bureaucracy. Funny that those anti-government-bureaucracy folks can’t – or won’t – see it this way.

*38% of poverty was what one's income used to have to be to get financial assistance in Kansas if you were a childless adult -- and it was $100/month. Now it is not available at all.

[1] Ross JS, Detsky AS, “Health care choices and decisions in the United States and Canada”, JAMA, Oct 28, 2009;302(16):1803-4.
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