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Bevin Offers Hints — But Few Details — of Future Medicaid Reforms In Kentucky

Jennifer Morrow/Creative Commons

Gov. Matt Bevin's administration has taken the first steps toward reforming the state's Medicaid system, though he's yet to reveal firm details of how the changes will take shape.

Still, the new governor gave hints during a news conference Wednesday as to how Kentucky's Medicaid system could operate in the coming years. If his hopes are achieved, many Kentucky Medicaid recipients will be expected to pick up part of the tab for their health care coverage.

Bevin announced that Mark Birdwhistell is assembling a team to assist in drafting a proposal for a Medicaid waiver to be submitted to the Centers for Medicare and Medicaid Services.

Birdwhistell served as secretary of the Cabinet for Health and Family Services under Gov. Ernie Flectcher.

Bevin may apply for a Section 1115 Medicaid waiver from CMS, as WFPL previously reported. The waiver would give the state flexibility in how it operates Medicaid. The waiver program gives states the ability to test new approaches in Medicaid that differ from federal program rules, according to a brief by the Kaiser Family Foundation.

Bevin said Kentucky will likely replicate Indiana's model, which uses a 1115 waiver and was implemented under Republican Gov. Mike Pence. The amended waiver under the Affordable Care Act led to HIP 2.0 and covers nearly all adults ages 19-64 with income from zero to 138 percent of the federal poverty level — the same range as prescribed by the federal Affordable Care Act.

An estimated 350,000 Hoosiers became eligible for coverage under this plan.

In addition to the 1115 waiver, Bevin will also explore a Section 1332 waiver, which becomes available in 2017.

Section 1332 waivers allow states to implement innovations to provide access to health care. The new program must at least be as comprehensive and affordable as what would be provided absent the waiver; provide coverage to a comparable number of residents of the state as would be provided coverage absent a waiver; and does not increase the federal deficit, according to CMS.

CMS will make the final call of whether to grant a waiver to Kentucky.

Sustainability Questioned

Bevin said he recently spoke with U.S. Secretary of Health and Human Services Sylvia Burwell about the best options for Kentuckians for Medicaid. He also said there will be more dialogue between his administration and CMS.

"What can we do to customize a solution? Something that truly is transformative," said Bevin, who this month became just the second Republican in four decades to serve as Kentucky's governor.

"The intent here is not just to plug and play. We're are going to transform the way in which Medicaid is delivered in Kentucky."

Bevin said the number of Kentuckians enrolled in Medicaid is fast approaching 30 percent. And he said that percentage is financially unsustainable for the state.

Sustainability and affordability were repeated themes during Bevin's news conference on Wednesday, although he said changing the Medicaid program isn't just about finances.

"The point of the waiver is not just that it allows you to save money, although if utilized properly and if structured properly there will be economies of scale. There will be efficiency that will allow us ultimately to deliver more for less per capita. But the absolute dollar number is still going to be significant," he said.

Bevin accused his Democratic predecessor, Steve Beshear, of lying about the sustainability of Medicaid expansion. He said for fiscal year 2016, there will be a $128 million shortfall for the state's Medicaid program.

About a half million Kentuckians have gained health insurance through the Medicaid expansion. But the state will soon be required to pick up a portion of the cost of the expanded service.

In response to Bevin's comments, Beshear released a statement via Facebook saying: "Medicaid expansion was and remains a smart policy move — it's the most cost-effective way to get the poorest Kentuckians healthy, to shore up our local hospitals which were losing huge amounts of money providing indigent care, and to keep our workforce healthy so businesses can grow."

Beshear also said "facts and figures show that the reform we implemented is both sustainable and effective. It’s paying for itself, and it’s paying off with better health."

In recent years, Kentucky has drawn national attention for its full implementation of the Affordable Care Act. But Bevin vowed on the campaign trail this year to roll back the ACA, and his steps regarding health care since winning election last month are being watched nationally.

Waiting for a Plan

Terry Brooks, executive director of Kentucky Youth Advocates, in a statement applauded Bevin for upholding the commitment to those currently on Medicaid by continuing their coverage until an alternative plan is developed and approved by the federal government.

"As with all announcements like this, the devil will be in the details. The sustainability of a new plan and affordability for families relies on the components of the plan which are yet to be determined," Brooks said.

In a statement, state Rep. Joni Jenkins said she believes Bevin is determined to take the state backward.

"Those people hurt by rolling back expansion are not ‘lazy poor who refuse to work,’ as Republicans would paint them. The data is clear: Decreasing coverage for these Kentuckians but will most hurt Kentucky’s working families and those who need us most,” said Jenkins, a Democrat from Louisville.

Bevin said by the middle of 2016, he hopes to have a plan mapped out and to know whether it will work. If it will work and the federal government approves, the Medicaid reforms would go into effect in January 2017.

If it won't, the state will continue with its current model in 2017.

"I think by the middle of next year we will have a game plan that's going to work and be able to be implemented, or it will be clear to us that that is not possible," he said. "I am absolutely confident that we can make this work."

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