Kentucky Medicaid campaign picks up anti-Obamacare push where Congress left off
By Sarah Kelley
LOUISVILLE, Kentucky —
The latest congressional effort to repeal the Affordable Care Act has faltered, but advocates and those who rely on Medicaid — particularly in some of the poorest states, such as Kentucky — still face a threat from conservative governors seeking to accomplish a big part of what Congress could not.
In fact, the Bluegrass State has for the past year worked on a plan to downsize its Medicaid program, and it may pave the way for other states to do the same. It’s a role reversal: Under former Democratic Gov. Steve Beshear, an aggressive expansion of Medicaid in Kentucky helped cut the state’s uninsured rate 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. Thirty-one states and the District of Columbia have expanded the program under Obamacare.
It’s a scenario Kentucky’s Republican Gov. Matt Bevin says is financially unsustainable. Elected in 2015, Bevin ran on a promise to dismantle Medicaid expansion.
“The Medicaid expansion enacted under Obamacare is unaffordable for the taxpayers of Kentucky and should be repealed,” Bevin stated in his official campaign materials.
By expanding Medicaid under the Affordable Care Act, Kentucky 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.
In recent months, however, Medicaid expansion has been in the crosshairs on Capitol Hill as the GOP has sought to repeal the Affordable Care Act. On Tuesday, Senate Republicans scrapped their latest effort, known as the Graham-Cassidy bill, after it became clear they would not have enough votes for passage.
Republicans might be far more effective on the state level. A surge of GOP-led states, including Kentucky, Indiana, Arizona, Arkansas, Maine and Wisconsin, are pushing forward policies — ranging from work requirements to drug testing — that could ravage Medicaid as we know it.
Kentucky may lead the way.
Bevin’s administration has applied for a waiver of federal requirements to drastically cut Medicaid, as President Trump’s administration has encouraged states to do. The conservative health policy consultant who designed Kentucky’s effort to cut back its Medicaid program? She was confirmed to work for the Trump administration in March 2017: new CMS administrator Seema Verma.
First in line for waiver approval is Kentucky. If approved, nearly 100,000 Kentuckians are expected to lose Medicaid coverage over the next five years, according to both the Bevin administration and independent health policy groups that have studied the proposal.
Observers predict that Kentucky’s pending request could lead to an onslaught of conservative states lining up to follow 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.
‘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 health care.
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.
“Their lives have improved dramatically and drastically due to this vital access to health insurance.”
“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 says. “Their lives have improved dramatically and drastically due to this vital access to health insurance.”
Kentucky Could ‘Transform’ Medicaid in U.S.
Kentucky is one of 31 states that expanded Medicaid under the Affordable Care Act. At the time, then-Gov. Beshear said his administration had conducted “exhaustive research” and determined “Kentucky will come out ahead in terms of both health outcomes and finances.”
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.
To assess the impact of Medicaid expansion, last year Harvard’s School of Public Health studied 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 departments visits, and reported higher quality care and improved health compared with low-income adults in Texas, which did not expand Medicaid.”
The federal government covered 100 percent of the costs associated with newly eligible Medicaid enrollees during the first two years of expansion. 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.
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 Tea Party candidate ultimately routed his opponent, in large part thanks to voters who benefitted from Medicaid expansion under Obamacare yet vehemently denounced Obama.
Bevin followed through on his promise to discontinue Kynect, and although he’s seeking to rein in rather than fully repeal Medicaid expansion, he has vowed to follow through on repeal if the federal government denies Kentucky’s waiver request.
“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.
Kentucky’s waiver request seeks to impose work requirements on “able-bodied” Medicaid recipients, institute monthly premium payments, and temporarily suspend coverage if certain obligations aren’t met.
“Unlike the current Medicaid expansion under Obamacare,” he argued, the revised version would be “fiscally responsible” and ensure “better health outcomes.”
Bevin’s plan — submitted to the federal government as a Section 1115 waiver application — 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 that the Trump administration will approve the waivers. In March, the 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. Verma, who helped craft Bevin’s plan to overhaul Medicaid, will recuse herself in the agency’s decision regarding Kentucky, which is expected any day.
I can honestly say that Medicaid expansion in Kentucky saved my life
If the waiver is approved, the Bevin administration estimates 95,000 Kentuckians will exit Medicaid after five years, saving $2.2 billion, with about $330 million of that going to the state.
Bevin is confident, telling reporters he believes the waiver will be approved and that it will transform Medicaid “not only in Kentucky, but frankly, in America, because other states will want to do the same thing.”
Which is exactly what critics fear.
‘Medicaid expansion in Kentucky 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 says. “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.”
‘They’ll either rely on the emergency room or they’ll wait until whatever their health problem is gets much worse.’
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 health care.
“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 says. “That money is gone.”
When Medicaid was expanded in Kentucky, she says, “I did not have the money to pay for another month of health insurance.”
And Leigh says 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 says 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 says she would forego 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 says that’s just too onerous.
Overall, Greene says, there was a consensus that the proposed changes would “punish poor people.”
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 says 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 says.
Other barriers to employment cited included past convictions, lack of jobs accessible by public transportation, and difficulty passing a credit check. Greene says 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 says, there was a consensus that the proposed changes would “punish poor people.”
Providing dignity or criminalizing poverty?
Gov. 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…”
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,” says 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 will 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 says. “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.”
The fact that tens of thousands of Medicaid recipients would undoubtedly lose health coverage under Kentucky’s proposed waiver 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 health care.
“Is this Kentucky waiver something that promotes the objectives of the Medicaid statute? We would argue very strongly that it doesn’t,” says 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.’”
This story was updated to reflect the resignation of Health Secretary Tom Price. His former title has also been corrected.
Sarah Kelley is a Louisville, Kentucky-based freelance writer and editor. She can be reached at email@example.com.
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