The latest effort to repeal the Affordable Care Act has faltered, but Kentucky and other poor states still face a threat from conservative governors seeking to accomplish a big part of what Congress could not.
For the past year, the Bluegrass State has worked on a plan to downsize its Medicaid program, an effort that may become a model for other states to do the same.
Kentucky soon will learn whether the federal government will grant its requested waiver, which would allow Gov. Matt Bevin to cut nearly 100,000 Kentuckians from Medicaid over the next five years. The proposed changes would impose work requirements and premium payments, and dental and vision care would have to be earned.
And if the waiver is denied, Bevin has said, he would cut the existing Medicaid expansion for 460,00 people entirely.
So how likely is it that Kentucky gets the waiver?
Experts agree approval is probable, in part because the conservative health policy consultant who designed Kentucky’s waiver now works for the Trump administration: Seema Verma, administrator of the Centers for Medicare and Medicaid Services. She has said she would exclude herself from the decision, but it is her agency that makes the ruling.
Bevin is confident the waiver will be approved, telling reporters that it would transform Medicaid “not only in Kentucky, but frankly, in America, because other states will want to do the same thing.”
U.S. Rep. John Yarmuth, D-Louisville, sees Bevin’s plan as a political ploy.
“I think that Bevin’s motives are mostly political and ideological, and not pragmatic,” Yarmuth told LEO.
He said Medicaid expansion is working in Kentucky, not only providing healthcare for people, but saving money by keeping them out of emergency rooms.
Still, as much as Yarmuth disagrees with the waiver’s intent, he conceded it would cause less harm than Bevin’s looming threat to eradicate Medicaid expansion altogether if the waiver is denied.
“The waiver is problematic, but if the alternative is cutting coverage for half-a-million people, it’s better,” Yarmuth said. “It’s the lesser of two evils.”
‘Vital access to healthcare’
Sarah Buckler, 33, is a social worker who has seen Medicaid improve or save the lives of many Kentuckians she serves. The safety-net insurance program also helped her husband when he needed it most.
When Chase Bank closed its Louisville loan processing center in 2014, Buckler’s husband, Kenny, was laid off. The job loss came shortly after a skin cancer diagnosis, and a lapse in health insurance would have meant postponing crucial treatment or racking up medical debt.
Because Medicaid had expanded under Kentucky’s previous governor, however, Kenny qualified during the six months he was unemployed.
“It was incredibly helpful,” Sarah Buckler said in a recent interview.
Buckler is a program manager at the St. John Center for Homeless Men, a Louisville nonprofit aimed at helping those in need achieve self-sufficiency by overcoming barriers. A big one is access to healthcare.
She rattles off examples of men who have undergone otherwise relatively routine surgeries for knees, backs, gallbladders — procedures that vastly improved quality of life but likely never would have been addressed without Medicaid.
“Thanks to Medicaid expansion, every day I witness men seeing their primary care doctors instead of going to the ER, being able to get prescriptions and take medicines that help them manage chronic health and mental health issues,” Buckler said. “Their lives have improved dramatically and drastically due to this vital access to health insurance.”
Existing plan works
Kentucky is one of 31 states (plus the District of Columbia) that expanded Medicaid under the Affordable Care Act. At the time, then-Gov. Steve Beshear said his administration had determined “Kentucky will come out ahead in terms of both health outcomes and finances.”
Kentucky’s expansion made a wide swath of new recipients eligible for a program originally designed for a narrow set of low-income populations, such as children, pregnant women, the elderly and those with certain disabilities.
Medicaid now covers anyone earning at or below 138 percent of the federal poverty level, which amounts to approximately $16,600 for an individual, or $28,000 for a family of three.
The result: Kentucky — a state that’s long earned abysmal rankings in health indicators such as cancer, diabetes, overdoses and heart disease — has seen the sharpest decline in uninsured adults nationwide.
The state’s uninsured rate went from 14.3 percent in 2013 to 5.1 percent in 2016, according to the U.S. Census Bureau.
Medicaid expansion accounts for a large portion of Kentucky’s 64 percent decline in its uninsured rate, with the program picking up an additional 460,000 enrollees since 2014. Today, around 1.4 million Kentuckians are on Medicaid — nearly one-third of the state’s population.
Last year Harvard’s School of Public Health compared the health outcomes of low-income adults in Kentucky and Arkansas, which expanded the program, with changes over the same period in Texas, which did not. Researchers found that poor adults in Kentucky and Arkansas “received more primary and preventive care, made fewer emergency department visits, and reported higher quality care and improved health compared with low-income adults in Texas.”
During the first two years of expansion, the federal government covered 100 percent of the costs associated with newly eligible Medicaid enrollees. A portion of that cost has since been shifted to states, which, under the ACA, eventually will pick up 10 percent of the tab from the expanded Medicaid program.
It’s a scenario Bevin said is financially unsustainable.
In 2015, Bevin campaigned on a promise to repeal Medicaid expansion and shut down Kentucky’s state-run ACA insurance exchange, Kynect, which was touted as a national model. The candidate ultimately routed his opponent, then-Attorney General Jack Conway, in large part thanks to voters who benefited from Medicaid expansion under Obamacare — yet vehemently denounced Obama.
Bevin followed through on his pledge to discontinue Kynect and now is working on Medicaid.
Working for healthcare
Kentucky’s waiver would impose work requirements on “able-bodied” Medicaid recipients, institute monthly premium payments, and temporarily suspend coverage if certain obligations aren’t met.
“This plan offers common sense strategies to help our citizens gain employment or prepare for employment through community engagement, including volunteer activities and job training programs,” Bevin said during a press conference announcing the proposed Medicaid changes last year.
“Unlike the current Medicaid expansion under Obamacare,” he argued, the revised version would be “fiscally responsible” and ensure “better health outcomes.”
Bevin’s plan would implement the following changes:
—Able-bodied beneficiaries must work, attend school or perform community service at least 20 hours per week. Anyone caring for a dependent or deemed “medically frail” would be exempt, though it’s unclear how the latter would be determined.
—Recipients would pay monthly premiums on a sliding scale, between $1 and $37.50.
—Any changes in income or number of hours worked must be reported within 10 days.
—Failure to fulfill these requirements could result in a loss of coverage for at least six months.
—Dental and vision coverage would be eliminated as a standard benefit for adults.
As it originally was written last year, the waiver sought to phase-in the new work requirements. An amendment filed this summer, however, asks that the 20-hour work requirement begin immediately.
There is good reason to believe the Trump administration will approve the waiver. In March, the newly appointed head of the Centers for Medicare and Medicaid Services, Seema Verma, and then-Health and Human Services Secretary Tom Price (who has since resigned) sent a letter to all 50 U.S. governors in which they called Medicaid “rigid and outdated” and encouraged states to submit waiver requests.
The Kentucky Cabinet for Health and Family Services website states the waiver is “pending approval,” and a cabinet spokesman did not return a call seeking further comment.
If the waiver is approved, the Bevin administration estimates 95,000 Kentuckians would exit Medicaid after five years, saving $2.2 billion, with about $330 million of that going to the state.
Observers predict Kentucky’s pending waiver — first in line for approval — could lead to an onslaught of conservative states following suit, and detractors already are planning court challenges.
Either way, the fight over Medicaid in these states will decide the program’s future for millions of Americans.
‘Saved my life’
Critics of Medicaid often paint recipients as those receiving another undeserved form of welfare. Leigh, a 56-year-old from East Louisville who asked that her last name not be revealed, is someone many wouldn’t expect to be on Medicaid
“I literally went broke with my retirement fund buying private health insurance prior to the ACA Medicaid expansion,” she said. “So, without any exaggeration, I can honestly say that Medicaid expansion in Kentucky saved my life and continues to do so daily.”
Leigh has been on the verge of a stroke due to high blood pressure more than once. She also suffers from scoliosis, spinal stenosis, arthritis and thyroid disease.
She’s been on Medicaid for nearly three years and refers to its expansion as a “godsend.”
Leigh’s husband owns a lawn service, and for much of the past two decades they had purchased private health insurance. All told, she estimates they’ve spent more than $200,000 on healthcare.
“It just kept getting higher and higher, to the point where I had exhausted every bit of money I had put back for retirement; I had exhausted every bit of money my parents left me when they passed away,” she said. “That money is gone.”
Now, Leigh said, she’s terrified at the prospect of losing Medicaid due to the proposed work requirements.
Although the waiver is aimed at “able-bodied” adults finding employment, the criteria to make that determination is unclear. Leigh worked for years, most recently as the manager of a dry cleaner, but said it’s not possible anymore: “I simply can’t do it physically.”
If her Medicaid coverage is discontinued, even temporarily, Leigh would be unable to afford much-needed daily medications. In the absence of insurance, she said she would forgo medical treatment for fear of going into debt and losing her home.
Leigh also fears her husband’s Medicaid might be interrupted over the requirement that recipients must report any income fluctuation within 10 days. Given the unpredictable nature of her husband’s work, she said that’s just too onerous.
Deciding who can work
These same concerns were echoed by dozens of Kentucky Medicaid recipients who recently participated in a focus group conducted by Jessica Greene, a health policy professor at City University of New York. In mid-June, she interviewed 79 low-income Kentuckians who had received Medicaid.
For those currently on Medicaid who were not working — about two-thirds of that group — Greene said the most common reason was poor health.
“There was a lot of concern about how the state would determine who qualified for the work requirement’s medically frail exemption, particularly because a number of participants had applied for federal disability and been denied,” Greene said.
Other barriers to employment cited included past convictions, lack of jobs accessible by public transportation and difficulty passing a credit check. Greene said these participants pointed out an incongruity between having volunteer hours count for the work requirement but requiring payment of a monthly premium.
The other third of current Medicaid recipients Greene studied had jobs. Their primary concern was being cut off because of the new reporting requirements and the addition of premium payments.
Overall, Greene said, there was a consensus that the proposed changes would “punish poor people.”
Providing dignity or criminalizing poverty?
Bevin has touted work requirements as a means to “provide dignity” and help people take ownership of their lives.
The rationale is summed up like this in Kentucky’s waiver application: “Government assistance programs can only lessen the burdens of poverty — beneficiaries may only truly escape the bonds of generational poverty and improve their quality of life through obtaining stable employment … ”
But Medicaid, critics say, never was intended to serve as a pathway to employment.
“It almost feels like we’re criminalizing poverty with some of these proposed changes,” said Emily Beauregard, executive director of the nonprofit coalition Kentucky Voices for Health.
In particular, she believes requiring low-income workers to report changes in hours and income is overly complicated and would result in recipients experiencing lapses in coverage due to confusion and red tape.
“All of this will lead to people having less access to care. That’s not good for health or costs down the road,” Beauregard said. “They’ll either rely on the emergency room or they’ll wait until whatever their health problem is gets much worse. People will be less healthy, less employable, and they’ll end up costing the system more.”
Tens of thousands of Medicaid recipients would undoubtedly lose health coverage under Kentucky’s proposed waiver, which could be grounds for legal challenges if approved, experts say.
Here’s why: Section 1115 of the Social Security Act stipulates that Medicaid waivers must promote the objectives of the program, specifically strengthening coverage and providing better access to quality healthcare.
“Is this Kentucky waiver something that promotes the objectives of the Medicaid statute? We would argue very strongly that it doesn’t,” said Judith Solomon, vice president of health policy at the Center on Budget and Policy Priorities. The nonpartisan research institute focuses on policies that are designed to reduce poverty and inequality.
Solomon concludes a recent report on the federal waivers by saying the Trump appointees considering them “should be mindful to uphold the Hippocratic oath and ‘do no harm.’” •
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