Thursday, May 27, 2010

Health Care Reform & KY Medicaid

As the the Federal Health Care reform legislation begins to take shape there will be a significant role for state's to play. A large piece of the puzzle to achieve universal coverage is Medicaid, which is a Federal program that is administered by the states and the states share in the costs of the program. The match rate for Kentucky is approximately 20% after adjustments made by the Federal stimulus monies, normally the match rate would be closer to 30%. This is generally a good deal for the states, because of the high Federal participation.  

But as the Medicaid rolls grow, due either to the poor economy or the Federal health care reform and their expanded eligibility for the program, the costs are going to go up for states. Kentucky will not be immune to those increases and with the current budget situation as an example of how cash-strapped Kentucky is, it is likely that we will have trouble meeting the increased costs of the Medicaid program going forward.

Kentucky Medicaid is a nearly $6 billion program, so meeting the Federal Stimulus 20% match at the state level is over a $1.2  billion proposition. Not to mention if the match rate goes back up to pre-ARRA levels. As the program grows that cost will as well. 

Here are a couple of articles on the potential increases in enrollment and how they could impact Medicaid.

Report: Number of Kentucky Medicaid patients will surge: (Herald-Leader) "The number of Kentucky residents with Medicaid coverage could shoot up by nearly 424,000 patients by 2019, and the federal government will foot most of the cost of their treatment.

The Kaiser Family Foundation on Wednesday released a study projecting nationwide increases in Medicaid enrollment over a five-year period beginning in 2014, when most provisions of the health care reform bill will take effect.

If Kentucky aggressively pursues enrolling new Medicaid patients, the percentage of uninsured low-income adults in the state would drop 77 percent, versus a 69.5 percent drop in the number of uninsured people nationally.

The state also stands to get a slightly larger than average share of its Medicaid expansion paid for by the federal government 95 percent of the costs of covering newly eligible Kentuckians from 2014 to 2019, versus a national average of 92.5 percent.

The study estimates that if states actively sought to enroll additional Medicaid patients the uninsured and those earning up to 133 percent of the federal poverty level the federal government would pay $531 billion of the additional health care cost, with states picking up $43 billion."


Health care reform's X factor: (Stateline.org) "

Nobody knows for sure how much expanding Medicaid will cost the states because it's impossible to say how many new people will sign up for the program. A new study says that new enrollments, and their associated costs, could run much higher than many states expected."


How much state Medicaid costs will go up as a result of the federal health care overhaul depends a lot on how many people enroll in the program. In Texas, which has one of the least generous Medicaid programs in the country, enrollments are bound to go up. In New York, which has one of the more generous Medicaid programs in the country, the issue is how many people who are currently eligible for Medicaid but not enrolled will ultimately sign up for the program.

Wednesday, May 19, 2010

2010 Primary Election Re-Cap

Below is a brief recap of Tuesday's Primary Elections. You can download results for State House & Senate races as well as a breakdown we did on all of the races prior to the primary HERE
Congressional Races

In the open U.S. Senate Seat, the Republicans selected Rand Paul to be their nominee and the Democrats selected Jack Conway. Here is an article that summarizes this race Courier-Journal

In the 6th Congressional District, the Republicans chose Andy Barr to be their nominee to face off against Congressman Ben Chandler in November.  Here is an article that recaps this race Lexington Herald-Leader

In the 3rd Congressional District, the Republicans chose Todd Lally to challenge Congressman John Yarmuth in the Fall. Here is an article that summarizes this race  Courier-Journal


State Senate

Six incumbent state Senators had primary opposition today and all six won their primary elections. Although every race has its own dynamics sometimes there are state or national themes that can play a role to varying degrees in these races. The three themes that many thought might be at play in these races were anti-incumbent sentiment, the Tea Party movement, and the issue of expanded gambling.

Anti-incumbent sentiment seems to be running high in politics at all levels this election year, yet all of these incumbent state senators won tonight. All of them won by nearly 70% or more of the vote with the exception of Sen. Buford who narrowly won by 700 votes. At least for this primary election the anti-incumbent sentiment didn't seem to play a role, but the general election may be another ball game.

The Tea Party movement has been well documented due to Rand Paul's candidacy. It may be the reason that several of these candidates decided to run for office in the first place. However, it did not seem to be a huge factor in these State Senate Races.

The issue of expanded gambling was an issue in a couple of these State Senate races. In the 12th district Sen. Kerr opposed expanded gaming in the Senate and her primary opponent was a Republican in favor of expanded gaming. Sen. Kerr won with 71% of the vote. In Sen. Buford's case, he supported expanded gaming during a special session last summer and his opponent was supported by conservative anti-gaming interests. Sen. Buford won his primary, but it was the closest of the state Senate primary races. This issue will continue to be an issue in Kentucky elections this Fall as well.

There are two open seats for the State Senate, to replace the retiring Senators Tapp (R) and Worley (D) and the voters chose their nominees to run for these seats in the Fall. In the 20th district to replace Tapp, Democrats chose David Eaton, former Shelbyville mayor, and Republicans chose Paul Hornback, a farmer that has been endorsed by Tapp. In the 34th district to replace Worley, Democrats chose Lee Murphy, who received Worley's endorsement and owns a local technology company, and Republicans chose Jared Carpenter, who is a local banker. 

State House

Fourteen incumbent State Representatives had a primary election today, five Republicans and nine Democrats. Twelve of the Fourteen incumbents won their primary elections, two were defeated Rep. Charlie Siler (R) & Rep. Ancel Smith (D).

Rep. Siler (R) appears to have been beaten by challenger Dewayne Bunch by 123 votes. This was the third race between these two, Siler won in 2006 by 3000 votes and in 2008 by a much narrower 600 votes. Rep. Ancel Smith appears to have been beaten by John Short in the Democrat primary by less than 600 votes. Ruby Couch the Republican will face John Short in the Fall.

In terms of very brief analysis it appears that there was not a huge anti-incumbent sweep in state House races for this primary election. Its hard to know what factors may have been at play in these races at this point, but we will look to bring you that information in the days ahead.

Thursday, May 13, 2010

Governor Calls Special Session

Governor Steve Beshear announced today that he's calling a special session for May 24th to consider the budget, the road plan and a revenue package that was agreed to by both the House and the Senate prior to the end of the regular session.  In announcing the session, the Governor is also offering a proposal to end the budget stalemate between the House and the Senate

The proposal offers what the Governor described as a blend of the House and Senate versions; however, it appears to be most of the Senate version.  It includes no new taxes and maintains certain spending priorities rather than across-the-board spending cuts.  The Governor outlined priority agencies as all of education, state police, prosecutors, economic development, natural resources, Medicaid and other public health agencies and the corrections system.  

For all agencies other than the priority agencies, he is proposing a reduction of 3.5% in 2011 and 4.5% in 2012 compared to the 2010 budget.  The priority agencies will receive something less than that.

The Governor is also proposing a biennial budget as is required by the constitution and as was included in the Senate proposal.  He also includes efficiency goals in both 2011 and 2012 that were included in his original budget.  

The structural imbalance is also reduced by approximately $400 million.  He includes a carry forward of $279 million in the second year to mitigate deeper cuts.

The Medicaid proposal is as proposed by the House, but includes cost containment measures that were included in the Governor's original budget.

In answer to a question on what other items he may include in the call his reply was only those items where there is an agreement between the House and the Senate.  He reiterated that point throughout the press conference and at one point stated he would love to have the unemployment insurance bill included in the call but would not do unless there is an agreement.

For now, the only items on the call are to be the budget, road plan, and what was agreed to by the House and the Senate in the revenue bill (HB 530) that was proposed in the House.  It does not include any new taxes or any new recurring revenue. 

Download the press conference packet HERE

Beshear Budget Press Conference - Video

Here is the video from Governor Beshear's Press Conference on the Special Session and his budget proposal.



First Clip




Second Clip


Third Clip

Tuesday, May 11, 2010

2010 Election Overview


The 2010 Primary Election is just over a week away and will be held on Tuesday, May 18. This year will be a big election year particularly for the Kentucky General Assembly as all 100 House Members and half of the state Senate Members, 19 of 38, are up for re-election. As we shared back in January after the candidate filing deadline there was a large number of candidate filings this year as 232 people filed to run for these 119 seats. Now with the primary deadline approaching we wanted to give you on overview of these primary races and the dynamics that are at play.

Federal races normally don't play into local legislative races in Kentucky.  This year could be different with the darling of the tea party movement, Rand Paul currently leading in the Republican US Senate primary against the establishment candidate, Secretary of State Trey Grayson.  If Rand Paul wins the primary, his support will strengthen and the money will flow in from around the country.  It could mean tough times ahead for incumbents in the general election in November. It could also mean attacks on the upstart from more moderate Republican corners.

For a breakdown on all of the legislative races download our notes HERE

We hope this helps set the stage for election day on Tuesday and then also looking ahead to November.  We will send a break-down with the outcomes of Tuesday's election and will keep you updated through the summer and fall, leading up to the general election.

State Senate

The Senate Republicans hold a 20-17-1 majority. The one independent caucuses with the Republicans and serves as Chair of the Senate Budget Committee, so it is essentially a 21-17 margin.

Last summer the Democrats made a run at taking the Senate back after the resignation of Senator Charlie Borders (R) and subsequent special election of Senator Robin Webb (D). Then Senate Majority Floor leader Dan Kelly was poised to resign and accept a judgeship and if the special election to replace him produced a Democrat, the margin would have gone to 19-18-1. Some Frankfort pundits predicted that if Kelly's seat went Democratic there would be more resignations or defections and Senator Williams could be in danger of losing his Republican majority and position as President.

Kelly did resign, but Jimmy Higdon, now Senator Higdon, won easily and boosted the Senate Republican majority and stymied the Democrats efforts to take the Senate and remove President Williams. Now with a full slate of legislative elections in the Senate this year, the balance of power is once again up for grabs.

This election cycle there are 19 senate races up with 17 being contested in either the primary, general or both. Only Senator Higdon's and Senator Dorsey Ridley's seats are uncontested. Of the 17 contested seats, currently the Republicans hold 10 and the Democrats hold 6 and the 1 independent Bob Leeper. Two of the 17 seats are open seats, (Worley (D) and Tapp (R) retired). In the 15 seats that are currently occupied by an Incumbent, 6 of the incumbents have a primary election, 5 Republicans (Kerr, Harris, Denton, Buford,Williams) and one Democrat (Palmer).

State House

The Democrats hold a substantial 65-35 majority in the House, but their substantial majority also means they have more at risk in the fall elections. There are 58 of 100 State House seats contested in either the primary or general elections, incumbents occupy 54 of those seats. There are 5 open seats created by retirements, but only 4 of those are contested, Sara Gregory (R) replacing Rep. Upchurch did not draw an opponent. 14 of the incumbents have a primary election, 5 Republicans (Napier, Koenig, Siler, York, Turner) & 9 Democrats (Gooch, J.Lee, Riner, Henderson, Edmonds, A.Smith, Combs, Overly, R.Adams).

The real story in the House is that of the 58 contested seats, currently the Republicans hold 13 and the Democrats hold 45. This is a large number of seats for the House Democrats to protect, particularly if any or all of these factors are at play this Fall: the national political scene leans conservative, the tea party movement gains momentum, or the anti-incumbent sentiment is high. In nearly any scenario it is unlikely the Republicans could pick up enough seats to gain control of the House. But it is feasible to see them making some gains and commanding a larger role in policy making decisions.

Tuesday, May 4, 2010

Time running short for Medicaid help

Interesting article from Stateline.org on the prospects of getting an extension of the increased Medicaid funding through an enhanced Federal Match, requiring less money to match from states, that was part of the Federal Stimulus funds. Kentucky, in its various budget proposals counted on this funding coming through and utilized this increased match to balance the budget. If this funding doesn't come through from Congress it could leave a large whole in the budget and in Medicaid.

Kentucky isn't alone apparently two-thirds of states have predicated their budgets based on this funding.

Time running short for Medicaid help: "States are banking that Congress will extend a piece of the federal stimulus law that is helping them pay for their Medicaid programs. Two-thirds of the states crafted budgets for fiscal 2011 assuming that more aid would come through, and as many as 19 states have no backup plan in place should it not. But with spending getting new scrutiny on Capitol Hill, the assistance may not be coming anytime soon, if it comes at all."