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Kentucky’s Medicaid Changes Would Undermine Health Care Access

With the Senate Finance Committee voting tomorrow on Seema Verma’s nomination to head the Centers for Medicare & Medicaid Services (CMS), it’s worth another look at Kentucky’s proposed Medicaid changes, which she helped develop — and which would require CMS approval. As we’ve written, the waiver threatens to undermine Kentucky’s impressive progress in extending health coverage under the Affordable Care Act, cutting its uninsured rate in half and covering over 400,000 newly eligible Kentuckians.

Under the waiver, Kentucky would enroll most beneficiaries in a health plan that has a $1,000 deductible (the current Medicaid program has no deductible) and that lacks coverage for dental and vision care (which the current program now covers). Those beneficiaries would get a $1,000 state-funded account to pay the deductible and a “My Rewards Account” they could use to help pay for vision and dental care, among other things. Half of any balance in an enrollee’s regular account at year-end would roll over to the rewards account.

But the rewards account could prove an empty promise for many people. That’s because many people would use at least $1,000 in health care services over the course of a year. Kentucky has seen a 740 percent increase in substance use treatment services from 2014 through mid-2016; those receiving such services likely use at least $1,000 worth of health care a year, which would leave them no funds in their regular account to roll over to the rewards account. Similarly, people with diabetes or hypertension would likely use up their regular account for regular monitoring and treatment.

At the same time, there’s a real danger that people needing dental or vision care would pay for it by forgoing necessary health care services to preserve the money in their regular account, which would then roll over to the rewards account.

Kentucky’s waiver is similar to Indiana’s expansion waiver known as HIP 2.0, which Health and Human Services Secretary Tom Price has called a model for other states. Under that program, some Hoosiers appear to be experiencing barriers to getting health care. Moreover, there’s little evidence that Indiana’s individual accounts, which Kentucky would replicate, meet the state’s goal to “promote the efficient use of healthcare, including encouraging preventive care and discouraging unnecessary care.”

In evaluating waiver proposals, CMS determines whether they further Medicaid’s objective of delivering health care services to vulnerable populations who can’t otherwise afford them. Discriminating against people with chronic and serious health conditions and discouraging people from getting needed care undermine that objective. Kentucky’s proposal doesn’t merit approval.