Changes to Medicaid program mean Kentuckians may need to work, volunteer to remain eligible

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By Melissa Patrick
Kentucky Health News

The Trump administration has announced rules changes for the Medicaid program that allow states to require some enrollees to work or volunteer – changes that likely pave the way for Kentucky’s new Medicaid plan to be approved.

“Let me be clear to everyone in this room, we will approve proposals that promote community engagement activities,” Seema Verma, director of the Centers for Medicare and Medicaid Services, said in a speech to state Medicaid directors Nov. 7.

Seema Verma

Gov. Matt Bevin proposed changes to Kentucky Medicaid by requesting a waiver from federal rules more than a year ago. The proposal largely targets “able-bodied” adults who qualify for Medicaid under the expansion of the program under the Patient Protection and Affordable Care Act – those with household incomes up to 138 percent of the federal poverty level.

If approved, the plan would require such beneficiaries who are not “medically frail” or primary caregivers to work or volunteer 20 hours a week to keep their coverage. Work requirements for Medicaid recipients have historically not been approved because they didn’t line up with the program’s mission to provide medical assistance to low-income people; now the rules are different.

Kentucky Medicaid Commissioner Stephen Miller said at the directors’ meeting that Kentucky hopes to implement the state’s work requirements by July, Lisa Gillespie reported for Louisville’s WFPL.

At the Nov. 6 meeting of Kentucky’s Friedell Committee for Health System Transformation, Dr. Gil Liu, the state’s medical director for Medicaid, said the state will initially implement work requirements in regions that have the most jobs available, and will then figure out how to implement them in other parts of the state where fewer jobs are available.

The plan would also require most Kentuckians on Medicaid to pay small monthly premiums, initially $1 per person to $15 per family, depending on income. People with disabilities, pregnant women, children and caregivers would not have to pay.

Stephen Miller

“Miller said the administrative costs of collecting those premiums would be higher than the actual amount of premium collected. But he said the point of the change isn’t to make money — it’s to encourage enrollees to transition out of Medicaid and into private coverage,” Gillespie reports.

Critics of the plan, called Kentucky HEALTH, say that won’t work because employers don’t offer health insurance as a benefit nearly as much as they used to, and the state has many working poor who can’t afford private insurance. Most covered by the Medicaid expansion work.

Miller said he expects about 200,000 Medicaid enrollees will be affected by the changes, Gillespie reports. The expansion covers about 478,000 Kentuckians; Medicaid as a whole covers about 1.4 million. For a spreadsheet of enrollment by county in June 2017, click here.

If federal officials approve the waiver, as expected, the state estimates that 95,000 fewer Kentuckians will be on Medicaid in five years than if the proposal is not accepted. The state estimates that will save the state and federal government $2.4 billion over the next five years.

The state pays 30 percent of traditional Medicaid costs. The federal government paid all the expansion costs for the first three years, but this year the state is paying 5 percent, and that will rise in annual steps to the law’s limit of 10 percent in 2020.

Bevin has said the state cost is “unsustainable,” and rejects arguments that the multi-billion-dollar expansion has generated state tax revenue by boosting employment in health care.

The governor’s lieutenants also make the argument that the expansion hasn’t improved Kentucky’s health. Miller did that at the Medicaid directors’ meeting.

“He said that even though the state’s Medicaid rolls have soared to cover 33 percent of residents, Kentucky still has high rates of cancer, smoking and obesity,” Phil Galewitz of Kaiser Health News reports, quoting Miller directly: “We have to try something else. We need to do more than just help people access health care.”

Officials of then-Gov. Steve Beshear’s administration said when they expanded Medicaid that it would take several years to change the state’s health status, and that it might even decline temporarily as people who hadn’t received care for many years were diagnosed with health problems.

Tens of thousands of Kentuckians have used their new Medicaid benefits to get screened for cancer and other health problems, or get treatment for substance abuse or other issues. A three-year study of the expansion in Kentucky and Arkansas found a 23 percent increase in the share of people in federal surveys who reported that their health is excellent.

Emily Beauregard, executive director of Kentucky Voices for Health, an umbrella group of pro-Obamacare organizations, wrote in an op-ed that Bevin’s changes are designed to “remove people from the rolls, rather than to promote health and access to affordable care.”

Verma, who played an active role in designing Kentucky’s waiver request, told the Medicaid directors that the new rules are “ushering in a new day for Medicaid” that will increase states’ flexibility while improving accountability and integrity.

“We owe our fellow citizens more than just giving them a Medicaid card. We owe a card with care, and more importantly a card with hope,” Verma said. “Hope that they can achieve a better future for themselves and their families. Hope that they can one day break the chains of generational poverty and no longer need public assistance, and the hope that every American, no matter their race, creed, or origin, can reach their highest potential. We will approve proposals that accomplish this goal.”

Verma also said, “Believing that community engagement requirements do not support or promote the objectives of Medicaid is a tragic example of the soft bigotry of low expectations consistently espoused by the prior administration.”

Seven other states — Arizona, Arkansas, Indiana, Maine, New Hampshire, Utah and Wisconsin — have submitted varying requests to CMS that would require non-disabled Medicaid enrollees to either work or provide community service.

(Click for larger image) (Graphic from Medicaid and CHIP Payment and Access Commission)

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