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For 3 new Democratic governors, Medicaid expansion could be top priority in '19

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For 3 new Democratic governors, Medicaid expansion could be top priority in '19

As newly elected Democratic governors are set to take office in Kansas, Maine and Wisconsin following the Nov. 6 midterm elections, recent battles to expand Medicaid in each state may soon come to an end, and nearly 300,000 people could receive healthcare coverage.

Maine Gov.-elect Janet Mills already said she will immediately enact already passed expansion legislation, ending the state's yearlong fight over implementation of the program. But governors-elect in Kansas and Wisconsin, Laura Kelly and Tony Evers, respectively, face a more complex path ahead of them. While experts believe that expansion is likely to happen for the two states, both will have to navigate the initiative through Republican-controlled legislatures.

Adam Searing, associate professor at Georgetown University's Center for Children and Families, said that while larger challenges face Wisconsin, expansion in Kansas is likely to happen.

"I don't think it's a done deal, but I think it's probably the state most likely to succeed," Searing said.

After Medicaid expansion ballot initiatives in Idaho, Nebraska and Utah passed Nov. 6, 36 states and the District of Columbia have expanded Medicaid, according to the Kaiser Family Foundation. Maine is already an expansion state, but if Kansas and Wisconsin join, the total number of expansion states would increase to 38.

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Kelly facing a more conservative Legislature

The only thing that has stood in the way of Medicaid expansion in Kansas was former Republican Gov. Scott Brownback, who left his governorship in early 2018 for an ambassador role in the Trump administration. Legislation passed through the Republican-controlled state Legislature with bipartisan support in March 2017, only to be vetoed when it reached Brownback's desk. A vote to overturn the governor's veto in the state's House of Representatives failed by only three votes, officially killing the expansion legislation.

Now that Kelly is taking over the governor's office, expansion might seem inevitable: It has seen bipartisan support in the past, and Kelly has said she would sign legislation if it passes. However, supporters warn that going back through the state Legislature will not be easy.

April Holman, executive director of the Alliance for a Healthy Kansas, a statewide organization that supports expanding Medicaid, said that expansion in 2019 is not guaranteed because more conservative Republicans have replaced moderate, pro-expansion members of the party. With more conservative leadership in the legislature, Holman believes getting legislation to a floor vote will be a challenge.

"We have every reason to think that if we are able to get to a vote on the House and Senate floor, that expansion will be successful," Holman said. "But getting to those votes and getting through the process, I think that is going to be difficult."

If expansion is increased to 138% of the federal poverty level, 145,000 people would gain coverage, according to a 2018 report from the Kansas Health Institute.

While the federal government would cover more than 90% of expansion costs, the state's portion would still be significant. The Kansas Health Institute estimated in 2016 that the state's portion would total $729.7 million between 2018 and 2024, beginning with about $67.6 million in 2018, which is expected to nearly double by 2024.

To pay for the rise in Medicaid costs, Holman suggested the state look to a recent increase in its budget. On Nov. 9, the state's Consensus Revenue Estimating Group announced an additional $306.4 million will be added to the fiscal year 2019 budget. Holman said multiple different interests will be competing for this new money, but said it could be a funding option.

Expansion in Wisconsin could give 80,000 eligibility

Wisconsin is the only non-expansion state that already covers adults up to 100% of the federal poverty level, a policy that began in 2014 under current Republican Gov. Scott Walker. Because coverage would not be extended to as large of a population, expansion in Wisconsin is not expected to be as much of a financial burden as in states like Kansas, which currently provides zero coverage for childless adults.

Jon Peacock, research director for Kids Forward, a non-partisan policy organization, said that expansion would actually save the state about $15 million a month because of how the current Medicaid program is set up. Peacock explained that the current program's existing coverage of adults costs more because the federal government's contribution is much lower than if the state fully expanded.

The federal government is only covering about 59% of Wisconsin's current Medicaid costs. If the state expanded the program, about 80,000 more people would gain coverage and the federal government would cover at least 90% of the expansion costs because of a provision in the Patient Protection and Affordable Care Act. The law outlines rates that the federal government would contribute to help offset the cost of expansion. Between 2014 to 2016, the federal government covered 100% of costs. Each year thereafter, the percentage of coverage decreases, but is not expected to drop below the 2020 rate of 90%.

Peacock estimated that through June 2019, Wisconsin will have spent about $1 billion more on Medicaid than if it would have expanded in 2014.

Walker increased Medicaid coverage in 2014, but the outgoing governor has continually opposed a full expansion plan. Despite Republican control over the Legislature, Peacock expects expansion to be a main priority of the newly elected Democrat, Evers.

"The chances of [expansion] being approved here just increased substantially," Peacock said. "Both because of Evers' election and because it's clear from the referendums elsewhere just how popular Medicaid expansion is."

Opponents of expansion are still in the state legislature. Evers will get his first crack at rolling out expansion by including it as part of the 2019 state budget bill. Peacock said that once Evers does so, the "significant savings" expansion can produce will be evident, and further efforts to stop expansion will be hard to publicly oppose.

"It will be a difficult matter for Republicans who are resistant to the idea to come up with ... ways of filling the hole that will be left by taking expansion out of the budget," Peacock said.

Expansion will not be the only Medicaid issue facing Evers when he assumes office on Jan. 7. On Oct. 31, the Centers for Medicare and Medicaid Services approved the state's work requirements waiver, which would require Medicaid recipients to work or participate in other activities a certain number of hours per month to maintain coverage. Evers has made no direct indication on whether he will support the program, according to Peacock. However, Peacock and Searing noted that Evers is not obligated to enforce the waiver.

Mills to start expansion immediately

With Mills' victory in Maine and the Democratic Party winning control over both chambers of the state's Legislature, a yearlong battle to expand Medicaid looks to be over.

A ballot initiative for expansion was passed by Maine voters in 2017, receiving nearly 60% of the votes, so no new legislation needs to be passed there. However, current Republican Gov. Paul LePage has blocked it from taking effect.

LePage has said the ballot initiative came with no funding mechanism and the state has no way to pay for the program. The issue even reached the state's Supreme Court, which ordered the governor to submit an expansion plan to CMS. When LePage complied with the court order, he also included a letter to CMS Administrator Seema Verma urging the agency to reject his plan.

Mills said that she would implement the expansion plan immediately upon taking office, according to the Portland Press Herald. Expansion in Maine will increase coverage to about 70,000 people, according to Mills.