ASHLAND CITY, TENN. — In December 2014, Donnie Gene Rippy fell off a roof while shooing away ducks, breaking his back and too many bones to count. He underwent four surgeries to fix his shoulder, wrists and vocal cords.
Rippy, a brick mason, had the misfortune to be uninsured. But his bad luck was compounded by where his accident happened. If he had lived about 50 miles north—that is, anywhere over the Kentucky border—he wouldn't have to rely on ibuprofen and occasional cortisone shots from a local health department for his persistent back and knee pain. Chances are good he would also have gotten treatment for the memory and mood issues that developed after the fall. And he wouldn't be mired in more than $60,000 in medical debt.
Kentucky and Tennessee are similar in many ways: geography, demographics, income. But in 2013, the governor of Kentucky embraced the Affordable Care Act, expanding Medicaid coverage to tens of thousands of low-income families. Tennessee did not. As a result, about 280,000 Tennesseans, people like Rippy, don’t have access to the free or low-cost health care enjoyed by their neighbors to the north.
“We’re all in the United States, but yet you have some states that have the Medicaid part of it and some states decided not to take it,” said Rippy’s partner, Betty Batey. “I just don’t think that’s fair.”
Health care in America has long been a story of haves and have-nots. Obamacare was supposed to narrow that divide by providing nationwide protections against the inevitable illness or accident. In some ways it did: Since 2010, 20 million people have gotten coverage they might not otherwise have had.
But Rippy’s story is testament to one big way Americans haven't enjoyed the benefits equally. As originally drafted, the law required every state to broaden who could qualify for Medicaid in a move designed to insure roughly 16 million low-income Americans. But in 2012, the Supreme Court held that states could opt out of Obamacare’s Medicaid expansion. That means that whether a family of four earning up to $33,500 can get insurance really depends on who runs their state government.
Nineteen states rejected the expansion and the billions of federal dollars that came with it. All of them have Republican governors or GOP-controlled state legislatures who wanted nothing to do with an expanded entitlement which they predicted would lead to unsustainable spending. They also wanted to go on record against a health care law they disagreed with politically. Those states tend to have some things in common besides their partisan leanings: Most are in the South, and possess some of the nation’s highest rates of people who are chronically sick, uninsured and poor. They also have some of the highest concentrations of African-Americans, a population that has had disproportionately poor health outcomes nationwide.
“The only American citizens who cannot get subsidized health insurance are the low-income people in some of the neediest states in the country,” said Benjamin Sommers, a former official with the Department of Health and Human Services now with the Harvard School of Public Health.
While it's hard to generalize from two state’s experiences—one, for instance, might have higher smoking rates and the other, a stronger health safety net—there's no question that Medicaid expansion has big, consistent effects on the places that adopted it.
To tease out what those effects are and how they might be playing out, POLITICO took a closer look at Tennessee and Kentucky, two neighboring states with many things in common—and one drastically different decision about how to handle Obamacare. Their example shows that one of the law’s most troubling legacies has almost nothing to do with the law itself, and everything to do with the politics of how it has been implemented.
IN MANY WAYS, Kentucky and Tennessee are riffs on the same tune. One is home to bluegrass, the other, country music; one is famous for its bourbon, the other, whiskey. Both are relatively poor and burdened by some of the nation’s highest rates of smoking, diabetes, cancer and self-reported mental health problems.
But there’s a key political difference between them: When Obamacare passed, Kentucky’s governor was Steven Beshear, a Democrat who would become one of the few state leaders to expand Medicaid via executive order.
In some ways, Beshear’s move was a no-brainer: Far more of his citizens would get health care and the federal government would pick up the lion’s share of the tab. Before Obamacare, Medicaid covered only certain types of poor individuals—mostly children, pregnant women and parents of dependent children, as well as the poor elderly and disabled—and the state split the costs with the federal government. Childless adults were ineligible in most states, including Kentucky, unless they were also disabled or elderly. Obamacare dramatically expanded who could get coverage by qualifying any adult making up to 138 percent of the poverty line. And the federal government would cover all of the expansion’s costs for the first three years, and never less than 90 percent in perpetuity.
Still, Beshear’s decision to go with the expansion—effectively doing an end-run around Republicans in the state legislature who opposed the move—was politically daring. Kentucky's political leadership also includes die-hard Obamacare foes like Senate Majority Leader Mitch McConnell and Senator Rand Paul, a former GOP presidential contender, who delivered tirades against Beshear’s decision in speeches and op-ed columns.
Explaining his rationale in a New York Times op-ed, Beshear noted that Kentucky ranked among the worst states, if not the worst, in almost every major health category, including smoking, cancer deaths, preventable hospitalizations, premature death, heart disease and diabetes. He said he needed a big tool to change that.
“The Affordable Care Act is that tool right now,” he said in a recent interview in his Lexington, Ky., law office. “Is it the best tool? Who knows? There’s lots of ways you could go at this. But it is the only available tool that we as governors have to try to affect that change. In Kentucky, I grabbed it and ran with it.”
To an astonishing extent, the Medicaid expansion is Obamacare in Kentucky. Approximately 435,000 people have been covered through that program, compared with about 75,000 who are enrolled in private insurance through the state’s health insurance exchange. Compare that to neighboring Ohio, which expanded Medicaid at the same time but where 675,000 people enrolled in expanded Medicaid and another 212,000 people got private health plans.
Andy Saas, a Kentuckian who hadn’t had a regular doctor in 16 years, has no doubt how his life might have been different without Obamacare’s Medicaid expansion. "I would end up with no teeth in my face," said Saas, who does door-to-door meat sales and runs recovery houses in Louisville for former addicts. Instead, health insurance enabled Saas to get long-delayed dental work and to see a gastrointestinal specialist. He now has a primary care doctor. “I’m fortunate,” he said. "I have been in pretty good health.” Still, he’s burdened by medical bills stemming from a hospital stay four years ago after he was the victim of a crime. So far, he’s paid about half of the $74,000 debt.
Multiply Saas by hundreds of thousands of others and one begins to understand why expansion states like Kentucky are starting to experience benefits that elude their neighbors. Their uninsured rates have declined more sharply, while access to routine screenings and medical treatment has increased. Individuals and families have less non-medical debt, as health insurance provides a layer of financial security, freeing up money for them to spend on other needs.
A January study published in the journal Health Affairs showed that one year after Medicaid expansion, the number of Kentuckians who reported trouble paying medical bills declined by nearly 13 percentage points. Those skipping prescribed medications because it cost too much decreased by almost 11 points. And people receiving ongoing care for a chronic illness rose by more than 10 points.
Another study from the University of Minnesota about Kentucky’s implementation of Obamacare found colon cancer screenings ticked up, from 2012 to 2014, although the ACA is likely not the only factor.
This isn’t to say that Kentuckians’ health problems have been eradicated. Far from it. The long-term health impact of expanding coverage is likely to take years to play out, researchers and health economists say.
"Mortality and chronic disease itself is the result of years of health behaviors,” said Susan Zepeda, president of the Foundation for a Healthy Kentucky, a nonpartisan group that has studied the impact of Obamacare. “One year of access to preventive care is not going to turn that ship around."
About 1 in 4 Kentuckians reported poor or fair health in 2012, and that hadn’t yet changed in 2014, according to the University of Minnesota research. In fact, chronic disease prevalence actually increased as Obamacare went into effect, from 26.8 percent in 2012 to 29.1 percent in 2014. Experts say that may have been because more people got screened and diagnosed once they had insurance to pay for it.
Sommers’ study of Kentucky did not find significant changes in how people described their own health in that first year, although he said follow-ups to be released this year may well show new benefits. In several states that expanded Medicaid before the ACA—including New York, Maine and Arizona—death rates dropped, with the greatest reductions seen among older adults, minorities and those living in poorer counties.
“Health is a multifaceted thing,” said Katherine Baicker, a health economist at the Harvard School of Public Health. “Some very important health effects aren’t likely to manifest for a long time. But that being said, I think we’ve seen financial well-being and access improve.”
Individuals have fared better in other ways, too. Health care job growth in Kentucky, which had been declining, accelerated by 2 percentage points when researchers at the nonpartisan Altarum Institute looked at job growth from June 2013 to June 2014 and compared it with June 2014 to June 2015. Job growth across the rest of the state’s economy was unchanged. This was a phenomenon that Altarum saw repeated nationwide: states that insured more people saw jobs in health care increase.
If there are losers in Kentucky’s post-Obamacare world, it may be hospitals that banked on predictions that they would see huge benefits from increased coverage. The Kentucky Hospital Association says that while more patients have insurance—a change they support—they’ve been disappointed by Medicaid’s low reimbursement rates. In a report last spring, the group projected a net loss of $1 billion through 2020 as a result.
“The government's success expanding health coverage has come at a significant cost to Kentucky hospitals," said the report, titled “Code Blue.”
Beshear dismisses that assertion as wildly distorted.
“The Kentucky Hospital Association is out of step with every other hospital association in the country on the Affordable Care Act,” he said. “… How they can look anyone in the eye and say with a straight face that this hasn’t been good for them is beyond me.”
Another negative effect has been increased emergency room use, the most costly way to get health care. Fewer people say they are going to the ER for their regular care now that they are insured. But the Health Affairs study on Kentucky found that the number of ER visits by insured people nonetheless increased—perhaps because patients were unable to get doctors’ appointments in a timely way. Data on emergency department usage gathered by the Robert Wood Johnson Foundation found similar patterns.
Beshear describes it as an inevitable transition issue as people find doctors and adjust to having insurance.
“It’s going to take some time to get everybody to the right place,” he said, adding, “It’s amazing that so many people now are covered and are able to get some care.”
IN FEBRUARY 2015, nearly two years after Beshear announced he would expand Medicaid in Kentucky, Governor Bill Haslam, a Republican, tried to follow suit in Tennessee. He implored state lawmakers to approve an expansion plan that added some conservative tweaks in hopes the proposal would pass muster.
Haslam pulled out the stops, going on a statewide tour to promote his plan to reduce the state’s uninsured, estimated at about 850,000 people when the ACA took effect. He also told lawmakers that providing health care to vulnerable Tennesseans was one of the government’s most fundamental obligations.
“My faith doesn’t allow me to walk on the other side of the road and ignore a need that can be met, particularly in this case when the need is Tennesseans who have life-threatening situations without access to medical care,” Haslam said, echoing the same theme as several Republican governors, including Ohio’s John Kasich, who pushed through Medicaid expansion.
But the heavily Republican Legislature rejected Haslam’s proposal two days after convening in a special session to weigh the plan. The proposal never made it to either floor for discussion or a vote.
"People elected us to come here to answer problems,” a palpably frustrated Haslam said at the time. "And the problems still exist. There’s still a lot of people who don’t have health care.” (Haslam declined multiple interview requests for this story.)
Tennessee state Rep. Cameron Sexton, a Republican member of the Tennessee
House of Representatives and Health Committee chairman, said in an interview that “Insure Tennessee,” as Haslam’s doomed expansion plan was called, “is not coming back.”
Nor, it appears, may the fortunes of some of the state’s financially stressed hospitals or the lives of people like Jane Hopkins who fell through the cracks after the state rejected Medicaid expansion.
Failing eyesight and chronic kidney disease means Hopkins, 61, of White House, Tenn., can no longer work. This year, she was diagnosed with lung cancer, too. Hopkins, who receives close to $950 a month in disability payments, isn’t yet eligible for Medicare, the government program for the elderly and many disabled. One solution is drastic: leave the state. She has family in Kentucky and Oregon, both of which expanded Medicaid, but with her failing health she doesn't know how she could relocate. “I shouldn’t have to move,” she said. “It’s just not right.”
Meanwhile, Rippy, the brick mason, can’t work and has no income since his fall. He lives mostly off of his partner’s disability checks, stemming from a car accident that left her mostly paralyzed. That’s about $1,500 a month for the two of them, plus Batey’s health coverage under Medicare.
While mostly recovered from the trauma he experienced a year and a half ago, pain and other mental health problems persist. He has few options for medical care, and in that he isn’t alone. Uninsured Tennesseans have a particularly hard time getting treatment for mental health and substance abuse problems, says Melinda Buntin, head of the department of health policy at Vanderbilt University’s School of Medicine.
Tennessee has more residents with self-reported mental health problems than any other state, according to America’s Health Rankings for 2015. Buntin said she has heard the same complaints over and over in recent public forums—long waiting lists for uninsured residents with mental health issues, insufficient treatment beds and an inability to see a regular care provider. Lack of coverage “makes it even harder” to treat those types of persistent health issues so commonly found in the state, she said.
A May poll by Vanderbilt University found that a majority of Tennessee Democrats and independents—and most Republicans making less than $45,000—support Obamacare’s Medicaid expansion.
"The only group that's opposed to Medicaid expansion are Republicans who make more than $45,000 a year," said Joshua Clinton, the co-director of the Vanderbilt poll. Their opposition might reflect a belief that government shouldn’t be involved in providing health care, or it might be shaped by personal circumstances, especially if they are covered, he said.
Many Tennesseans did get private coverage through Obamacare despite the state’s rejection of expanded Medicaid. At the close of the most recent Obamacare open enrollment period, nearly 270,000 people in the state were enrolled in private plans. Some of them, however, might have been eligible for Medicaid coverage had Tennessee expanded the program.
While the uninsured rate for adult Tennesseans under 65 fell 2.5 percentage points over two years— that dip paled in comparison with Kentucky, where the uninsured rate plummeted 15.7 percentage points over the same period.
Tennessee hospitals saw more insured patients after Obamacare took effect, but unpaid bills from droves of uninsured patients still stress their finances.
Overall, hospitals saw a 15-percent decrease in admissions of uninsured patients from 2013 to 2015, according to data compiled by the Robert Wood Johnson Foundation. Again, Kentucky hospitals saw much larger benefits—a 73 percent drop.
Uncompensated care costs to the tune of about $38 million a year “put far more pressure on us than any other thing,” Alan Watson, the CEO of Maury Regional Medical Center in Tennessee, said in an interview.
Watson said he doesn’t expect that to change unless Tennessee expands Medicaid, something he "stopped trying to predict a long time ago."
His three-hospital system estimates Medicaid expansion could bring it $4.3 million in state and federal funding per year.
There was one category in which Tennessee managed to outperform its neighbor to the north. The state created more jobs in the health sector than Kentucky, but the increase in health job growth—at 1.5 percent—wasn’t as fast as Kentucky’s 2 percent. Altarum’s Charles Roehrig argues that Tennessee’s rate will pick up if it ever decides to expand Medicaid, drawing billions of federal dollars into the state economy
“It must be a job creator,” Roehrig said of expansion. “That money is coming into your state.”
HOW, FINALLY, TO judge the impact of Medicaid expansion, which has taken hold in 31 states? Will it have an enduring effect on residents’ health? Has it been an engine for economic growth?
Beshear is confident the expansion has saved the lives of Kentuckians who needed
surgeries or treatments that might otherwise have been out of their reach—even if it has not yet turned around the state’s gloomy health statistics. “I have no doubt that in a generation in Kentucky … you’re going to see a tremendous improvement in the health of our population,” he said.
Kentucky Senate President Robert Stivers, a Republican, remains unconvinced. “With any program, you can find successes,” he said. “But do the benefits outweigh the costs? I don’t think so.”
That debate continues not only in Kentucky but across the country as Obamacare enters its next phase without its namesake president in the White House, and as national and state elections shake up the status quo. If Republicans win both the White House and Congress, they could finally repeal the law—and then have to scramble to figure out what, if anything to offer the millions who would lose coverage.
Or if a Democratic president is elected and Republicans maintain control of Congress, Obamacare may remain the law of the land, but continue to limp along in heavily red states where antipathy runs so deep that state lawmakers continue to shun the expansion. The fact that states' costs will slowly rise over the next few years could further erode support. Electoral losses by pro-expansion lawmakers, which include a handful of Republicans, could have the same effect.
That’s exactly what happened in Kentucky. A gubernatorial upset last year shifted priorities in that state almost overnight. Republican Governor Matt Bevin, who was inaugurated last December, campaigned on a vow to roll back Obamacare. Bevin insists he will pare back Medicaid benefits—an effort that Beshear, his term-limited Democratic predecessor, is fighting hard.
Bevin declined to be interviewed, but other state GOP leaders who support modifying, if not canceling the expansion outright, say it does nothing to discourage unhealthy behaviors. They also fear it promotes dependency and will someday wreak havoc on the state budget—even though studies have shown that the billions in federal dollars flowing into states that expanded Medicaid has resulted in savings for many state treasuries.
Conservatives also worry whether the federal government can keep paying its 90 percent share, as the law requires. By 2026, the Congressional Budget Office estimates 15 million people will be enrolled in expanded Medicaid nationwide. Overall, the Medicaid program is expected to cover 69 million people in a decade, up from about 62 million this year. “It’s important to have a social safety net,” said Tevi Troy, a former health official for President George W. Bush. But “these numbers are getting really big.”
Still, the experience of states like Kentucky in covering more of its residents is proving to be stubbornly appealing, even in deeply red legislatures. Across the
border in Tennessee, state Rep. Sexton, a Republican who had predicted his governor’s expansion plan wasn’t coming back, chairs a legislative task force that recently proposed a more modest Medicaid expansion plan. It would be a potentially significant turning point if it were approved by the Legislature and the federal government. The task force was convened by Tennessee House Speaker Beth Harwell, under terrific public pressure to do something about the uninsured after Governor Haslam’s plan was defeated.
The Legislature “is not going to approve a 300,000 [person] initial enrollment health care plan,” Sexton said. In contrast, an estimated 115,000 people may qualify for coverage under the first phase of this plan. The second could insure another 200,000.
“Government is there to help people get back on their feet and get back into the workforce,” Sexton added. “I think a lot of times, government becomes long-term assistance and a way of life.”
Michele Johnson, executive director of the Tennessee Justice Center, a local advocacy group, argues that access to health care cannot be compared to a handout. "Health insurance doesn't fix everything," she said. “But without it, nothing can be fixed.”
Rippy is a late convert to that idea. He had dismissed the value of coverage when he was able-bodied. "And then when it comes up to where you need it,” he said, “then you're like, ‘Oh Lord, what am I gonna do now?’”