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Assessing Kentucky’s Pre-Waiver Medicaid Expansion Success

The Department of Health and Human Services (HHS) has approved a waiver that will let Kentucky make harmful changes to its Medicaid program for adults, including imposing a work requirement, as we explain in a new paper. The state doesn’t need a waiver to help low-income Kentuckians improve their health and well-being; it’s already made dramatic progress toward these goals since it expanded Medicaid under the Affordable Care Act (ACA) in 2014.

HHS’ approval letter says that Kentucky’s waiver “has been designed to empower individuals to improve their health and well-being.” But imposing a work requirement, instituting premiums, increasing cost-sharing, and disenrolling beneficiaries for not renewing eligibility or reporting changes in income — as the waiver will do — will likely create a maze of new red tape for beneficiaries, providers, and managed care organizations that will cause large numbers of Kentuckians to lose coverage or have a harder time getting the health care they need.

The waiver puts at risk the remarkable success of Kentucky’s Medicaid expansion (see graphic):

  • The largest coverage gains of any state. While all states have experienced drops in uninsurance under the ACA, Kentucky’s rate among adults dropped from 20 percent in 2013 to less than 8 percent in 2016. Among low-income adults eligible for Medicaid, the uninsured rate dropped from 40 percent in 2013 to just 7 percent in 2016.
  • Improved health of low-income Kentuckians. The share of people reporting they’re in excellent health rose by 54 percent, and the share getting regular care for chronic conditions rose by 13 percent relative to changes in the non-expansion state of Texas, according to a Health Affairs study.
  • Improved access to care. The share of people with a personal physician has risen by 26 percent, while the share who visited an emergency room in the past year fell by 30 percent, according to the same Health Affairs study.
  • Help mitigating the harm caused by the opioid epidemic. The use of substance use treatment services covered by Medicaid increased fivefold since Kentucky implemented its Medicaid expansion, according to a report for the Foundation for a Healthy Kentucky.
  • Improved financial security. The share of Kentuckians having trouble paying their medical bills has fallen by 23 percent, according to the Health Affairs study.
  • State budget savings. The expansion saved the state more than $100 million in its first 18 months because, along with receiving the higher federal funding match rate for expansion enrollees, it spent less on state-funded programs serving people with mental and behavioral health needs and paid less to hospitals to cover uncompensated care costs. Without a waiver, the expansion would save the state money through at least fiscal year 2021, a state-commissioned report found.

Governor Matt Bevin’s administration has conceded that, under the waiver, 100,000 fewer Kentuckians will have Medicaid coverage in five years than if there were no waiver. This ensures that the state’s record-low uninsurance rate will creep back up. With this waiver, Gov. Bevin and the Trump Administration have put low-income Kentuckians’ coverage and access to care at risk in the coming years.