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Governor’s Medicaid Proposal Puts Coverage for over 400,000 Kentuckians at Risk

Despite Kentucky’s tremendous progress under health reform, Governor Matt Bevin proposed Medicaid changes today that would make it harder for Kentuckians to keep their coverage, and he threatened to cancel the state’s Medicaid expansion — putting coverage at risk for over 400,000 Kentuckians — if the federal government rejects his proposals. 

Health reform has had a huge impact in Kentucky, cutting its uninsured rate from 16 percent in 2013 to 8 percent at the end of 2014.  People enrolled through the Medicaid expansion are receiving preventive care at rates at least as high as other Medicaid enrollees, fewer people are skipping medications because of cost, and fewer are having trouble paying medical bills. 

Federal officials previously made clear that they won’t approve changes like those Bevin proposed today:  imposing work requirements and charging premiums that would make coverage unaffordable for many beneficiaries.  “[A]ny changes to Kentucky’s program should maintain or build on the historic improvements Kentucky has seen in access to coverage, access to care, and financial security,” the Department of Health and Human Services (HHS) explained last month.

HHS Secretary Sylvia Mathews Burwell wrote Arkansas’ governor earlier this year that, “Consistent with the purposes of the Medicaid program, we cannot approve a work requirement.”  Yet Bevin’s plan would condition Medicaid eligibility on work.  Similarly, his plan would impose premiums on all beneficiaries — even those with no income — and delay coverage until they’re paid, though HHS didn’t allow Montana to impose significant cost-sharing and premiums on people with incomes below 50 percent of the poverty line.  The governor’s plan would also lock people out of coverage for six months if they fail to renew their coverage in a timely fashion, something no state has proposed doing.

Bevin has cited Indiana’s “HIP 2.0 Plan” as a model for Kentucky, but replicating that plan — which delays coverage until payment of premiums and charges steep co-payments to poor people who don’t pay their premiums — would be unwise.   Extensive research shows that premiums significantly reduce low-income people’s participation in health programs, and mounting evidence suggests that Indiana has had trouble implementing HIP 2.0 in a way that’s consistent with its agreement with the federal government.  Until state and federal evaluations of Indiana now underway are completed, federal officials shouldn’t allow other states to adopt Indiana’s approach, particularly where beneficiaries would risk losing coverage or access to care due to premiums and cost-sharing.

To be approved, state requests for waivers from federal Medicaid rules must promote Medicaid’s objective of delivering health care services to vulnerable populations who can’t otherwise afford them.  In evaluating waiver proposals, HHS examines whether they would expand and strengthen coverage among low-income residents.  Kentucky’s proposal clearly fails that test.