In his proposed Medicaid overhaul, Bevin last year wanted to slowly increase to 20 hours per week the time able-bodied Medicaid recipients had to work to remain eligible. In a revised request filed this week, the governor wants recipients to work 20 hours from the start.
“Since submission of the original request, Kentucky has determined that tracking these hour increases by each member’s unique set of circumstances and variable factors proves extremely challenging for member communications and program IT systems,” the governor’s revised request reads.
The revision also would require Medicaid recipients to report within 10 days any change in circumstances that might make the ineligible for the benefit. If they fail to provide the information in time, they get locked out of the program for six months.
While critics of the proposal, including U.S. Rep. John Yarmuth, D-KY, said the stricter requirements would leave additional Kentuckians without health coverage, officials with the state and the Kentucky Hospital Association said the update’s impact would be small.
Medicaid and its expansion
Medicaid is the state government health insurance program for the poor. Under the Affordable Care Act, informally known as Obamacare, some states, including Kentucky, expanded their Medicaid programs, because the expansions, at least initially, were paid mostly with federal dollars.
The expansion allowed people to get covered if they earn 138 percent of the federal poverty level or less. That works out to be about $16,000 in annual earnings for an individual or about $32,000 for a family of four.
In Kentucky, the expansion was implemented under then-Gov. Steve Beshear. It has allowed 475,000 additional Kentuckians to gain Medicaid. About 25 percent of those are covered by Louisville-based Passport Health. In total about 1.4 million people in the commonwealth are covered by Medicaid.
A recent Harvard University study indicated that the ACA’s health coverage expansions “have produced major improvements in medical care and health for low-income adults, including reduced out-of-pocket spending, better access to primary care and preventive services, improved self-reported health, and improved care for those with chronic conditions.”
Bevin last summer asked the Centers for Medicare & Medicaid Service, the federal agency that oversees those programs, to allow Kentucky to opt out of the expansion, saying that it would cost the state $1.2 billion between 2017 and 2021 and that the additional expenditures would jeopardize funding for pension obligations, education and public safety.
Bevin also proposed the implementation of Kentucky HEALTH (Helping to Engage and Achieve Long Term Health, which includes:
- monthly premiums between $1 and $15 for people at 138 percent of FPL and below
- barring people for six months from enrolling in Medicaid if they are kicked out for failing to comply with eligibility requirements
- requiring “able-bodied” recipients to perform 20 hours a week of “community engagement or employment activities.”
Bevin’s plan faced strong criticism at the time. Yarmuth, in a letter to Bevin, said that the governor’s plan would take away health insurance from tens of thousands of Kentuckians, that his HEALTH plan would fail and that CMS would reject it, in part because of the work requirement, “which CMS has never approved,” the congressman wrote.
Last summer, Bevin’s proposal exempted Medicaid recipients from the work requirement for three months, and then gradually increased the obligation by five hours per week at the fourth, sixth, ninth and 12th months.
Bevin’s request to implement those changes is still pending with CMS, but the governor’s office this week filed an updated request that, among other things, eliminates the graduated work requirement and simply would demand that all able-bodied recipients perform 20 hours of work/community service from their first day of being on Medicaid.
Dustin Pugel, research and policy associate at the Kentucky Center for Economic Policy, said that the additional reporting requirements would result in another 9,000 Kentuckians losing Medicaid coverage.
The majority of people on Medicaid already work, Pugel said, and people in jobs with fluctuating incomes — retail, restaurants, construction — will struggle to comply with the new 10-day reporting requirements.
However, Nancy Galvagni, senior vice president of the Kentucky Hospital Association, said that the revision did not change eligibility requirements and that people had to take some initiative in retaining their coverage.
“People have to be responsible for their own health,” she said.
Galvagni said the KHA did not expect the revision to have much of an impact on the number of people without health insurance.
The governor’s goal is to get able-bodied adults into the workforce so that they can gain health insurance through their employers, she said.
Hospitals and doctors prefer people on employer-based and other private insurance plans because they tend to pay health care providers more money than government plans.
Pugel also said that Bevin’s overhaul in total would result in 97,000 people losing Medicaid coverage, which would harm people’s health and increase health care costs in the long run. Many of the people who would lose coverage have chronic illnesses that will go untreated until the severity of their conditions brings them to local emergency rooms. There, they will receive expensive care that will be paid either by the hospitals through charity care — or by people with insurance who pay higher rates than they normally would.
However, Kristi Putnam, program manager for Kentucky’s Medicaid overhaul request, said people with chronic diseases — mental illness, chronic substance use disorder, blood clotting disorders — would remain eligible for Medicaid as they are exempt from the work requirements.
In addition, Putnam said, while 97,000 fewer people will be on Medicaid, the state expects that a portion of them — though how many is unclear — would gain employer-sponsored health insurance.
Pugel also said that while the state expects its overhaul to cut its Medicaid bill over the next five years by $358 million, the state would lose matching federal dollars during that period of about $2.1 billion. That money pays for salaries of doctors, nurses, home health aides, who spend the money in Kentucky communities on homes, cars and groceries, he said.
Putnam said the federal match would be replaced in part by higher spending from private insurers because of a greater number of people on employer-sponsored plans. In addition, she said, the governor’s plan includes incentives for preventive services, such as smoking cessation, which would reduce the need for health care expenditures.
Pugel said that sounds good in theory, but the reality will be different.
“The truth is, people are going to lose Medicaid coverage,” he said.
However, Bevin, in his original request, said the system cannot continue as it has, because it costs too much, ignores private market dynamics and fails to prepare Kentuckians for self-sufficiency.
“Kentucky HEALTH is a transformative program designed not only to stabilize the program financially, but to improve health outcomes and overall quality of life for its members,” Bevin wrote.
Yarmuth told Insider via email on Thursday that Bevin’s request “will, by his own admission, end Medicaid coverage for nearly 100,000 Kentuckians.
“This is catastrophic for Kentucky families, particularly those with a loved one undergoing treatment for serious or life-threatening medical conditions,” the congressman said. “This update is yet another damaging step backward in Gov. Bevin’s retreat from our state’s status as a national leader in expanding access to health care.”
Two weeks ago, Yarmuth sent a letter to Health and Human Services Secretary Tom Price seeking an update on the status of Bevin’s request. As of Thursday, the congressman had not received a response.