Kentucky Gov. Matt Bevin submitted the state’s final Medicaid waiver to the federal government on Wednesday. The plan would make dramatic changes to the state’s expanded Medicaid system, which former Gov. Steve Beshear enacted as part of the Affordable Care Act.
Bevin’s changes would put in place high-deductible health plans instead of the traditional, free benefits that Medicaid has offered. The $1,000 deductible would be paid for by the state.
There will also be premiums starting at $1 a month up to $15 a month depending on income level. For people making above $11,880 a year -- what qualifies as living in poverty -- a lack of payment would mean they would lose coverage for six months. People earning below the poverty limit would have to make copayments until premiums were paid.
Enrollees would also have to re-enroll every year for Medicaid coverage as well, excluding pregnant women, children and people with chronic and serious medical, developmental or mental conditions.
The U.S. Department of Health and Human Services will now review the waiver.
Under the ACA Medicaid expansion, eligibility for adults was expanded up to 138 percent of poverty. Approximately 428,000 people have been added to the Kentucky program since its expansion, and the state’s uninsured rate has gone from 20 percent in 2013 to 7.5 percent in 2015.
Before the implementation of the expansion, eligibility for parents was at $11,491 for a family of three, and there was no coverage for adults without dependent children.
At a press conference for a different announcement on Wednesday, Bevin declined to discuss specifics of the Medicaid plan with reporters.
“If there are not structural changes made, there will not be the ability for expanded Medicaid in Kentucky,” Bevin said. “The ball is in HHS’s court. It’s entirely up to them. There needs to be the ability to pay for this.”
Bevin said the current program would cost an additional $1.2 billion in new state spending between 2017 and 2021, as the federal government decreases its funding. His plan says it would save Kentucky taxpayers $2.2 billion in health spending over the same period.
Susan Zepeda with the Foundation for a Healthy Kentucky said while the plan mimics employer-based coverage, there are significant differences between the two.
“When I have insurance through my employer at a re-enrollment period, I’m typically re-enrolled automatically,” Zepeda said. “And there’s not a question of failing to pay my premium because it’s taken out of my paycheck. It seems like we are asking more of people who have more limited circumstances.”
Dental and Vision
The final waiver makes vision, dental and over-the-counter drug benefits only obtainable by doing “community service, health-related or job training activities” for people making between 101 and 138 percent of the federal poverty limit. These activities, including working, will be logged and will earn dollars toward benefits.
The Kentucky plan borrows many ideas from the Indiana Medicaid expansion plan. They include an account where dental and vision benefits are only available to people who pay what is basically a monthly premium.
But a July evaluation of the Indiana program found only 60 percent of enrollees surveyed knew about the account that earned dental and vision benefits.
Adam Searing, senior research fellow at Georgetown University’s Center for Children and Families, said the results don’t bode well for the proposed Kentucky plan. People might either not know, or be too busy or confused to figure it out.
“You’re expecting a lot of people who are living at a place where they’re on the edge, they’re working multiple jobs, and the ideal is that everyone sits around and tracks their health plan spending account and assesses if they can go to the dentist. And for these families, that’s not how life works,” Searing said.
Indiana also sought a work requirement as a condition of being eligible for Medicaid. But in 2015, the Centers for Medicaid and Medicare struck it down, saying that a work program would have to be separate from Medicaid eligibility.
“While states may promote employment through state programs operated outside of the demonstration, this is not permitted under the Medicaid program,” a 2015 CMS fact sheet stated.
Employer-based Coverage
The plan also would move Medicaid enrollees to employer-based coverage if that’s an option, and would pay a portion of the premium. For an enrollee with Medicaid who has the option of getting on employer coverage, the state would pay a portion of the employee’s monthly premium.
Parents with kids who have health coverage through a state program for low-income children would also have the option to add those children to their plan.
Kentucky’s underemployment rate in 2013 was 15 percent, only a slight decrease from its peak of 17.5 percent in 2009. This takes into account part-time workers who want to be full-time and people looking for work, according to the Kentucky Center for Economic Policy.
But according to Judith Solomon, vice president for health policy at the nonprofit and nonpartisan think tank the Center on Budget and Policy Priorities, said low-income workers commonly work multiple part-time jobs or have employers who don’t offer health insurance.
“There's a bit of wishful thinking in this notion that people will go find employer coverage and leave the program,” she said. “There’s no evidence that I’ve seen that employer coverage is available to people who are working part-time, multiple jobs or jobs that don’t offer health insurance.”
Additional Details
The plan also would:
-Take away enrollees ability to see doctors while they are waiting to be approved for Medicaid. This is called “retroactive eligibility.”
-An enrollee who is bed-bound but is making more than $11,880 a year wouldn’t be able to get non-emergency medical transportation. This includes transportation to dialysis for people who can’t walk or drive.
-Enrollees who are already working more than 20 hours per week will not be required to perform community service or other job training activities to keep getting coverage.
The Bevin administration is seeking to implement the changes over five years, and the plan would require federal approval to be enacted.
A spokeswoman for HHS said in a statement that the Kentucky Medicaid expansion has been successful thus far.
“As in other states, we are prepared to continue dialogue for as long as it takes to find a solution that maintains and builds on Kentucky's historic progress, and avoids moving backwards,” said HHS spokeswoman Marjorie Connolly.
The federal government will now review the application, and eventually open up a federal comment period for 30 days. At a minimum, Kentucky will not hear back for 45 days. HHS says with other states, the waiver review process has taken an average of seven months.
