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Kentucky’s Medicaid Proposal Puts Recent Health Gains at Risk

August 24, 2016 at 3:00 PM

Kentucky Governor Matt Bevin today submitted a proposal to the Centers for Medicare & Medicaid Services (CMS) that would change the state’s Medicaid expansion, leading to tens of thousands of people becoming uninsured.  While Gov. Bevin says the changes are necessary to improve Kentuckians’ health, research shows that Medicaid expansion has already fueled tremendous improvements in the health of the state’s residents. 

Kentucky’s proposal is modeled on Indiana’s Medicaid expansion waiver, called the Healthy Indiana Plan 2.0 (HIP 2.0).  Like Indiana, Kentucky proposes to charge premiums and give beneficiaries an account similar to a health savings account to fund a deductible.  Individuals with incomes above the poverty line who miss premium payments would lose their health coverage and would be unable to re-enroll for six months.  One way Kentucky goes beyond Indiana, however, is in proposing a work requirement for adults without dependent children, which isn’t allowed in Medicaid.

But allowing Kentucky to replicate HIP 2.0 would be unwise, as a recent evaluation commissioned by Indiana shows.  According to the evaluation’s findings, HIP 2.0’s structure appears to be keeping some eligible low-income people from enrolling and others who have enrolled from getting the health care they need, as we recently explained

The Indiana evaluation also shows that the one-third of enrollees in HIP 2.0 who have copays and fewer benefits because they don’t pay premiums are likelier to use the emergency room for non-emergency care.  They also have lower rates of adhering to their prescription drug regimens for certain chronic conditions such as asthma, arthritis, and heart disease than the group that doesn’t pay drug copays.

In contrast to Indiana, where enrollment has been lower than expected, enrollment in Kentucky’s Medicaid expansion has been robust: 400,000 people have gained coverage.  That’s a big reason why the state’s uninsured rate among non-elderly adults has dropped from 24.1 percent to 8.4 percent. 

Among Gov. Bevin’s justifications for his proposal, he’s claimed that the increased Medicaid enrollment hasn’t improved Kentuckians’ health.  A new study proves him wrong.  Harvard University researchers surveyed low-income adults in Kentucky and Arkansas — southern states that expanded Medicaid — and Texas, which hasn’t expanded, at the end of 2013, 2014, and 2015.  The 2014 survey found improvements in affordability and access to care after the first year of expansion in Kentucky and Arkansas, but didn’t find significant changes in use of health care services or health among the three states.  By the end of 2015, however, low-income adults in Kentucky and Arkansas received more primary and preventive care, visited emergency departments less often, and reported better health than low-income adults in Texas.

Many people who have gained coverage in Kentucky had been uninsured for a long time. Improvements in their health won’t happen overnight, but surveys show that the state is on a positive trajectory.  Contrary to what Gov. Bevin says, increased coverage has already produced better health among Kentuckians, and CMS should not allow changes that would keep people from enrolling in coverage or getting the health care services they need. 

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