A Medicaid work requirement that was expected to be phased in across Kentucky starting in April, has now been delayed until July and premiums will be waived during their first month, according to state officials.

The Kentucky Cabinet for Health and Family Services released a revised timeline Thursday for its Medicaid overhaul —  known as Kentucky HEALTH — and said officials no longer expect an estimated $295 million state general fund shortfall in the Medicaid budget over the current biennium.

“During the last three quarters of the calendar year 2018, there has been a decline in overall Medicaid enrollment of 72,309,” a news release from the Cabinet says.

Using updated enrollment data and revenue projections, the Department for Medicaid Services and the Office of the State Budget Director “now estimate that, based upon current Medicaid enrollment levels, and assuming continuing economic conditions, the enacted budget will be sufficient to cover expenses over the current biennium.”

The total Medicaid budget for the current fiscal year is about $11.5 billion and goes to $12 billion in the next fiscal year, Cabinet spokesman Doug Hogan said.

As part of Kentucky HEALTH, many Medicaid beneficiaries will be moved into what’s called an Alternative Benefit Plan, starting April 1, that will require them to get certain benefits, such as routine dental and vision services, by earning virtual dollars in a My Rewards Account.

Also, many will be moved into a monthly premium plan April 1, but the premiums will be waived during that first month to give them time to adjust to the program, according to the news release.

The state also says the work or community engagement requirement will begin no sooner than July 1 instead of April 1. The affected adults will have to complete 80 hours a month of work or other approved activities, such as volunteering, and report it to the state.

“While the community engagement timeline is still being developed, it will be phased in across Kentucky,” Hogan said via email.

Many factors went into the decision to revise the Kentucky HEALTH timeline, including a pending lawsuit and a recent federal government shutdown that affected progress on the case, Hogan said.

Kentucky HEALTH, also known as the state’s Section 1115 waiver, is the subject of a federal lawsuit by more than a dozen Medicaid beneficiaries challenging the Trump administration’s re-approval of the program in November. Several national groups and health scholars have filed briefs in support of the beneficiaries.

The Department of Justice recently asked for an indefinite delay in the case, saying that its work on behalf of the federal defendants was being hampered by the shutdown. But U.S. District Judge James Boasberg only granted a one-week extension.

Kentucky HEALTH was initially scheduled to begin last July but was sidelined when Boasberg ruled that the Trump administration’s approval of the program was “arbitrary and capricious” and that it ignored the central objective of Medicaid. With that, Boasberg vacated the approval of the program and sent it back to the U.S. Department of Health and Human Services for further review.

Critics of the program have included Kentucky Voices for Health, a consumer advocacy group that responded to Thursday’s announcement by the state.

Despite the modified timeline, “any implementation of the waiver still creates barriers between Kentuckians and their medical care,” said Angela Cooper, state outreach and education director for Kentucky Voices for Health.  “Additionally, the constantly changing deadline and implementation dates only add to the confusion for beneficiaries.”

In a statement, Adam Meier, secretary of the Cabinet for Health and Family Services, said Kentucky HEALTH will play a critical role in connecting people to “robust opportunity development resources, tuition-free job certification programs, and workforce and volunteer opportunities in their communities.”

This story has been updated with a comment from Kentucky Voices for Health and additional information and comments from the state.

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Darla Carter
Darla Carter is a hometown girl who recently joined the staff of Insider Louisville to mostly cover health. She previously served as a longtime health and fitness writer for The Courier-Journal, where she also worked for the Metro, Neighborhoods and Features departments. Prior to that, the award-winning journalist wrote for newspapers elsewhere in Kentucky and Tennessee, covering a range of topics, from education to courts. She's a graduate of Western Kentucky University, where she studied journalism and philosophy, and is the proud mom of two young children.