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Plan To Scale Back Medicaid Gets Mixed Response In Kentucky

Kentucky Governor Matt Bevin
Gage Skidmore via Flickr
Kentucky Governor Matt Bevin is applying for a federal waiver to modify the state's Medicaid program along fiscally conservative lines. Bevin was sworn into office in December 2015.

If Gov. Matt Bevin’s proposal to change the state’s Medicaid system is approved, about 86,000 fewer people will be enrolled in the program by July 2021, according to his administration. That will save the state money, as he’s said, but it’s also raising concerns about lost coverage.

The plan would require most beneficiaries to pay premiums ranging between $1 and $15 per month and lock out those who don’t pay. Recipients would be able to get benefits again once they take a health literacy class and pay back the amount they owe.

During an interview on WLSK in Lebanon Tuesday morning, Bevin said the proposed program would give recipients “dignity.”

“There’s no dignity involved in being a ward of the state, in being completely dependent on the government and on your fellow neighbors, and have no expectation of you or any opportunity to give back,” Bevin said. “I think this is a win-win.”

The new program would provide incentives for Medicaid recipients to volunteer, participate in smoking cessation programs or participate in job search and training by adding credit to an account that allows them to purchase more benefits.

“It encourages them to be a part of the fabric of their communities,” Bevin said. “That’s healthy, frankly. That engagement is one of the things that leads to better and healthier outcomes.”

Related: Is Indiana's Alternative Medicaid Expansion Working?

Bevin’s waiver proposal estimates the plan would save the state $300 million between the 2017 and 2021 fiscal years. Over the same period, the administration has said there would be 214,000 fewer “member months” — or a month in which someone is signed up for Medicaid — covered in the 2017 fiscal year, increasing to some 1 million fewer “member months” in 2021.

As the Kentucky Center for Economic Policy pointed out, dividing the “member months” numbers by 12 yields the estimated number of recipients enrolled in Medicaid each year: 17,833 fewer people in 2017 and 85,917 fewer in 2021.

Judith Solomon, vice president for policy at the liberal-leaning Center for Budget and Policy Priorities, said that even the small premiums in Bevin’s proposal would push people off the Medicaid rolls.

“When you do the math of who we’re talking about, and when you just have a month-to-month income, it leads to a lot of challenges,” Solomon said.

After individuals have been on Medicaid for two years, Bevin’s plan would gradually increase the cost of coverage for those who have incomes greater than 100 percent of the federal poverty line. The plan says the cost-sharing “discourages Medicaid dependency by preparing individuals for the costs associated with commercial or marketplace coverage” via an insurance exchange.

Solomon said the plan does nothing to help individuals find employment or jobs with higher wages.

“I don’t think there’s anything in this waiver that makes me think that the reason you’re covering fewer people is because they magically obtained coverage in the employer market or somewhere else,” she said.

Bevin Finds Support 

Bevin campaigned on scaling back the state’s expanded Medicaid program, which made eligible people earning up to 138 percent of the federal poverty line. The initiative, which was implemented by an executive order from former Democratic Gov. Steve Beshear, has added more than 400,000 people to the state’s Medicaid rolls.

Bevin’s plan to scale back the number of people using the program and tinker with the benefits has drawn praise from hospital administrators and Republican leaders in the state.

Russell Cox, president of Norton Healthcare in Louisville, said the company was encouraged by Bevin’s plan to seek the waiver.

“Through this process, Medicaid expansion in Kentucky should be preserved and strengthened while improving patient care and being good stewards of the commonwealth’s resources,” Cox said.

The Kentucky Hospital Association has also been supportive of Bevin’s plan.

Left unchanged, expanded Medicaid is expected to cost Kentucky taxpayers an extra $1.2 billion for fiscal years 2017 through 2021.

Sen. Ralph Alvarado, a Republican from Winchester, said requiring “personal responsibility” from Medicaid recipients was the only way to continue the Medicaid expansion.

“The plan gives Medicaid enrollees the incentives, dignity and confidence to transition from dependence to independence,” Alvarado said. “This proposal appears to be a more commonsense approach that I believe will make our Medicaid system more affordable and, consequently, sustainable for the future.”

Bevin’s administration has instituted a 30-day comment period on the official plan, which is posted on the state’s Cabinet for Health and Family Services website. Officials said they intend to submit the waiver to the federal government on Aug. 1, with hopes of getting approval sometime in September.

There are several possible points of contention between Bevin’s proposed Medicaid overhaul and what the federal government has allowed states to do in the past. Previous proposals to require people to work in order to be eligible for Medicaid have failed, and states aren’t allowed to impose premiums if they prevent low-income people from accessing coverage, according to the U.S. Health and Human Services Department.