Changes to Medicaid Waiver Request Move Further in the Wrong Direction

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Last August, Kentucky applied to modify its Medicaid program through a request to the federal government to waive certain requirements of the law, known as an 1115 waiver. 1 As explained in our comments at the time, the proposed changes would result in fewer Kentuckians covered and therefore decreased access to health care, which would ultimately harm health and move the state backwards. 2  While the waiver proposal is framed in terms of increased financial sustainability and reduced costs, it would likely increase costs for the state as it introduces new, expensive and complex administrative burdens, and limits access to the preventative care that improves health and keeps costs down in the long run. Rolling back Kentucky’s historic gains in health care coverage would hurt the many Kentuckians who benefit from the state’s Medicaid program in its current form and act against the goals of the Medicaid program as a whole and the 1115 waiver in particular.

With the recent modification of the original waiver request comes added barriers to getting and using Medicaid coverage. By jumping from a 12 month phase-in of the community engagement component to an immediate 20 hour per week requirement, the enrollment losses would be even more severe. And by enforcing a reporting requirement on income changes with a six-month lock out for non-compliance, the program would penalize enrollees simply based on the nature of low wage work. These changes intensify the harms of an already counterproductive waiver.

Work Requirement Is Misguided and Harmful — and Change Makes It Worse

The original waiver request required a community engagement requirement that made eligibility for Medicaid coverage conditional on 20 hours a week of some work-related activity. This minimum hourly work requirement was to be ramped-up over a period of 12 months, but the operation modification changes that to an immediate 20 hour mandate. Embedded in the work requirement is the assumption that people covered by Medicaid are not working, or would be encouraged to increase their work by the requirement, with the goal of having their incomes rise above the level that makes them eligible for Medicaid. This assumption is wrong-headed, as it ignores the reality of low-wage work and the barriers to improved employment.

Most Medicaid enrollees who can work do work

In Kentucky, the majority of Medicaid expansion enrollees currently work, and four out of five adult Medicaid expansion enrollees have worked at some point in the past five years. 3 The Kaiser Family Foundation estimates that 51 percent of Kentucky Medicaid-covered adults currently work, and 66 percent come from a family where at least one person works. 4

Of those who do not work, most are ill or disabled, taking care of a loved one, or are in school or retired. Kaiser estimates that, nationally, all but 4.5 percent of Medicaid-enrolled adults are working or meet one of those criteria. Of the 4.5 percent who either do not work or have a good reason not to, 3.3 percent are looking for work and just 1.2 percent are not.

Work requirements ignore the nature of low-income work

hours, sometimes below 20 hours per week. In fact, according to 2015 Census data, 1 in 5 non-elderly Kentucky adults whose incomes qualify them for Medicaid work less than 20 hours per week. 5 As of 2015, the three industries that employed the most Medicaid expansion-eligible adults in Kentucky were restaurants, construction and department stores, all of which often provide only part time and sometimes irregular work opportunities. 6

Estimates from the Kaiser Family Foundation mentioned above showed, nationally, 41 percent of Medicaid-covered adults work full time and 18 percent work part time. Low-income workers often are forced to work fewer hours than they would prefer. According to the Department of Labor, over 5 million Americans work part time involuntarily and would work more if their place of work offered more hours or they could find full time jobs.7

Work requirements do not promote long-term employment or reduce poverty

An established body of research shows work requirements do not reduce poverty or succeed in helping people obtain long term, permanent employment. 8 Among those who received cash assistance through the Temporary Assistance for Needy Families (TANF) since its creation in 1996, work requirements have not yielded long-term results. One review of 13 randomly assigned studies showed a work requirement resulted in a short-term increase in employment, but employment outcomes faded after 2 years and the requirement didn’t have any effect on employment 5 years afterward. In fact, the study showed most participants were not employed 75 percent or more of the time, 3 to 5 years out from their participation in TANF-required work activity. 9 The communities that have shown significant long-term employment effects through a program that required work as a condition of eligibility were in Portland, Ore., and Riverside, Ca.. In those communities program administrators offered significant work supports and training, and encouraged participants to hold out for better jobs with higher wages that offered more opportunity for advancement.

Most individuals subject to work requirements remain in poverty, and in some cases become poorer. An evaluation of 11 programs that offered cash assistance and SNAP (formerly known as food stamps) showed that the percent of TANF participants living in poverty in the observed communities didn’t change 2 years after participation, and the percent living in deep poverty (half of the poverty level or less) increased in 6 of the 11 communities. 10

Work requirements are ineffective as a condition of eligibility for public benefits because they do nothing to change either an individual’s job qualifications, ability to afford job training and education or the existence of decent job opportunities in the labor market in which he or she is trying to navigate.

Work requirements would result in decreased enrollment

In the recent request to add a work requirement nearly identical to the one Kentucky has proposed, the Indiana Family and Social Services Administration estimated that a quarter of those for whom a work requirement would apply would lose coverage due to non-compliance. 11 Assuming our state’s Medicaid population is similar, this requirement alone could lead to roughly 100,000 people losing coverage because they would not be able to meet the requirement for various reasons.

Those reasons do not have to do with a lack of motivation, or a desire to “free-load” as some have suggested, but are due to a struggling labor market. Between 2009 and 2017, 32 Kentucky counties saw the total number of jobs decline 10 to 32 percent. Roughly 3/4 of Kentucky counties saw either modest job growth of less than 10 percent or a decline in jobs during that time frame.12 A depressed labor market in much of the state, barriers to gainful employment or advancement like criminal records and poor health, and a lack of income supports and adequate wages are primarily what is holding back unemployed and underemployed Medicaid enrollees from better economic mobility. 13

Removing the ramp-up for community engagement hours would exacerbate the damage

By eliminating a 12 month ramp-up for community engagement and instead requiring an immediate 20 hour per week activity related to work, the state would be enforcing a mandate without any opportunity for participants to adjust to it. Although the waiver amendment request includes a three month delay in the requirement, primarily for first time enrollees, enrollment would decline even more substantially than under the original waiver. In the estimate provided within the public notice section of the operational modifications document, it is estimated that 9,048 more people would lose coverage than under the original waiver request. A total of 96,687 would lose coverage by the 5th year. According to the estimate, people would lose coverage “for a variety of reasons, including program non-compliance.” In other words, rather than strengthen and expand coverage for low-income individuals, as is the first of four criteria for an 1115 waiver, these changes do the opposite.

 

Locking Out Medicaid Enrollees for a Failure to Report Changes in Income Is a Penalty for the Nature of Low-Income Work

There is already a requirement that enrollees report changes in wages that bump them over the income eligibility threshold. But the proposed change penalizes a failure to report a much larger number of changes, with failure to comply resulting in a six month lockout from the program. Now changes that must be reported include changes in income that affect thresholds to pay different levels of premiums (25, 50 and 100 percent of the Federal Poverty Level), changes in an employer’s health insurance offerings and premium costs, and changes in work-related hours per week. This requirement punishes people solely on the volatile nature of low-wage work.

Medicaid workers work in industries with instable hours and income

As mentioned previously, Kentucky workers covered by Medicaid work in jobs with irregular hours and inconsistent wages. This is especially true for the three industries with the largest Medicaid populations: restaurants, construction and retail. In retail, hours change weekly or even day-of; restaurant workers depend on tips, which vary greatly, especially when shared; and construction work is seasonal and often depends on weather conditions as well as the location of construction projects.

Low-wage workers face a number of challenges that would make this reporting requirement onerous. According to the Center for Law and Social Policy, many low-income workers are employed in jobs that have:

  • Inadequate hours.
  • Highly variable hours on a weekly basis.
  • Little advance notice of shifts, including being sent home early or called in right before a shift begins because of growing use of management strategies like “just-in-time” scheduling.
  • Split shifts or on-call shifts. 14

In each of these cases, wages and hours would vary on a week-to-week basis. But the waiver modification states such changes would have to be reported to the cabinet within a 10 day period. This would be burdensome for both the enrollee and the state, and would almost certainly result in people churning on and off Medicaid and higher administrative burden.

Locking out Medicaid enrollees for a failure to report income would increase churn and disrupt care 

As already mentioned, given the highly variable work schedules and income of Medicaid-covered workers, it is very likely many Medicaid enrollees will become locked out of coverage. That results in one of two things: Either enrollees would decide to go without coverage and forgo needed care, or they would seek out a financial or health literacy class so they can re-enroll. In either case, this would be burdensome for the state and disruptive for the individual.

People already churn in and out of Medicaid in Kentucky at a high rate. Between 2012 and 2013, 19 percent of the Medicaid population changed eligibility status. 15 Each time someone’s eligibility status changes it requires administrative action. The prospect of a large number of people becoming locked out of Medicaid and then moving back on, potentially the same day, multiple times a year would dramatically increase the administrative cost and burden for the state.

In addition, disruptions in care could have very serious consequences for individuals with chronic conditions. According to a study from the Harvard School of Public Health, 72 percent of Medicaid expansion-eligible Kentuckians have 1 or more chronic conditions. 16 The study also found a substantial increase in the number of low income Kentuckians with a primary care physician and getting regular care for chronic conditions, thanks to Medicaid expansion. The waiver will cause more of these people to cycle on and off coverage, reducing health and costing the state more in the long run as conditions that might not have worsened become more expensive to treat.

Build on Kentucky’s Health Care Successes – Don’t Undermine Them

Kentucky has made historic progress in health care, primarily through our decision to expand Medicaid. Several studies have shown that multiple measures of health access and outcomes have improved since 2014:

  • The number of uninsured Kentuckians dropped by more than half.
  • Screenings for cancer, diabetes and dental issues have risen dramatically.
  • The number of people with a primary care physician and who are receiving regular care for a chronic condition have increased.
  • Preventable hospitalizations for problems like hypertension and asthma have dropped.
  • Breast cancer deaths and infant mortality have declined.
  • There is an increase in Medicaid expansion-eligible Kentuckians who report having excellent health. 17

The 1115 Medicaid waiver process exists to demonstrate innovations in health care coverage and delivery that move us forward. In spite of our unparalleled gains in health, this process could be used to make even more improvements. In fact the goals of an 1115 waiver, according to the Centers for Medicaid and Medicare Services are:

  1. Increase and strengthen overall coverage of low-income individuals in the state.
  2. Increase access to, stabilize and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state.
  3. Improve health outcomes for Medicaid and other low-income populations in the state.
  4. Increase the efficiency and quality of care for Medicaid and other low-income populations through initiatives to transform service delivery networks.

But the waiver request does not meet these standards, as we described in our prior comments, and those failures are worsened by the most recent round of modifications. The new barriers to coverage, administrative complexity and reduced benefits are in direct conflict with what a demonstration waiver should do.

Forcing people off health care coverage based on the nature of their work and the current state of the labor market impedes that progress and would ultimately harm our communities. We urge the state to abandon these changes and work with stakeholders across the commonwealth to shape our Medicaid program in a way that builds on, rather than rolls back, our successes.

  1.  “Kentucky Health,” Kentucky Cabinet for Health & Family Services, August 15, 2015, http://chfs.ky.gov/NR/rdonlyres/69D38EB6-602F-4707-933C-80D5AAE907F7/0/KYHEALTHWaiverFINAL.pdf.
  2.  Dustin Pugel & Jason Bailey, “Proposed Medicaid Waiver Would Reduce Coverage and Move Kentucky Backward on Health Progress,” Kentucky Center for Economic Policy, October 7, 2016, http://kypolicy.org/dash/wp-content/uploads/2016/07/1115-Medicaid-Waiver-Federal-Comments-KCEP.pdf.
  3.  Dustin Pugel, “Many Kentucky Workers Have Gained Insurance through the Medicaid Expansion and Are Now at Risk,” Kentucky Center for Economic Policy, December 8, 2016, http://kypolicy.org/many-kentucky-workers-gained-insurance-medicaid-expansion-now-risk/.
  4.  Rachel Garfield, Robin Rudowitz & Anthony Damico, “Understanding the Intersection of Medicaid and Work,” The Henry J. Kaiser Family Foundation, February 17, 2017, http://www.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-and-work/.
  5.  Data are from the 2015 American Community Survey one year estimates for Kentucky adults under 64 years old who earn less than 139% of the Federal Poverty Level.
  6.  Pugel, “Many Kentucky Workers Have Gained Insurance through the Medicaid Expansion and Are Now at Risk.”
  7. Data are from the Current Population Survey’s June 2017 estimate for workers in nonagricultural industries who worked part time for economic reasons. https://www.bls.gov/webapps/legacy/cpsatab8.htm.
  8. LaDonna Pavetti, “Work Requirements Don’t Cut Poverty, Evidence Shows,” Center on Budget and Policy Priorities, June 7, 2016, https://www.cbpp.org/sites/default/files/atoms/files/6-6-16pov3.pdf.
  9.  Jeffrey Grogger & Lynn A. Karoly, Welfare Reform: Effects of a Decade of Change, Harvard University Press, 2005.
  10.  Stephen Freedman et al., “National Evaluation of Welfare-to-Work Strategies: Two-year Impacts for Eleven Programs,” Manpower Development Research Corporation, June 2000, http://www.mdrc.org/publication/evaluatingalternative-welfare-work-approaches.
  11.  “Amendment Request to Healthy Indiana Plan (HIP) Section 1115 Waiver Extension Application,” Indiana Family and Social Services Administration, July 20, 2017, https://www.in.gov/fssa/hip/files/HIP%20Amendment%20(Update%207_20).pdf.
  12.  Jason Bailey, “Job Recovery for Some Kentucky Counties, Second Recession for Others,” Kentucky Center for Economic Policy, May 15, 2017, http://kypolicy.org/job-recovery-kentucky-counties-second-recession-others/.
  13.  Jason Bailey, “Address Declining Workforce through Job Creation and Work Supports,” Kentucky Center for Economic Policy, July 11, 2016, http://kypolicy.org/address-declining-workforce-job-creation-work-supports/.
  14.  Jessica Gehr, “Doubling Down: How Work Requirements in Public Benefit Programs Hurt Low-Wage Workers,” Center for Law and Social Policy, June 2017, http://www.clasp.org/resources-and-publications/publication-1/Doubling-Down-How-Work-Requirements-in-Public-Benefit-Programs-Hurt-Low-Wage-Workers.pdf.
  15.  Anita Cardwell, “Revisiting Churn: An Early Understanding of State-Level Health Coverage Transitions Under the ACA,” National Academy for State Health Policy, August 2016, http://nashp.org/wp-content/uploads/2016/08/Churn-Brief.pdf.
  16.  Benjamin D. Sommers, Bethany Maylone, Robert J. Blendon, E. John Orav & Arnold M. Epstein, “Three-Year Impacts Of The Affordable Care Act: Improved Medical Care And Health Among Low-Income Adults,” Health Affairs, May 17, 2017, http://content.healthaffairs.org/content/early/2017/05/15/hlthaff.2017.0293.
  17.  Dustin Pugel, “New Report Highlights Kentucky’s Gains in Care and Health,” Kentucky Center for Economic Policy, March 17, 2017, http://kypolicy.org/new-reports-highlight-kentuckys-gains-care-health/.

Kentucky Has the Most to Lose from Senate Health Care Repeal Bill

Kentucky would see its uninsured rate more than triple under the proposed Senate bill to repeal the Affordable Care Act (ACA). According to the Urban Institute, Kentucky’s uninsured population would jump by 541,000 people in 2022 based on the proposed changes to the healthcare system. The primary reason for the coverage losses is a cut in federal funding for Medicaid and premium subsidies on the insurance marketplace of $6.3 billion in 2022, a  58.5 percent reduction. That’s the largest percentage cut of any state.

The coverage losses under the Senate bill come from 704,000 Medicaid enrollees and 17,000 marketplace enrollees losing coverage. The Urban Institute also estimates that 180,000 Kentuckians would gain coverage through their employer, though if Kentucky decides to waive the Essential Health Benefits, these individuals would be enrolled in inferior coverage that would also be subject to annual or lifetime caps.

The percent of Kentuckians under Medicaid who would lose coverage is particularly alarming. In cutting the number of people covered by Medicaid in half, the Senate repeal bill kicks a higher share of Kentuckians off Medicaid than anywhere else. This is such a large share of Kentucky’s population that it essentially strips insurance from 1 in 6 Kentuckians.

The effort to roll back the Affordable Care Act and then permanently squeeze funding for traditional Medicaid does not just take us back to the days before the ACA improved Kentuckians’ health coverage. It sets the commonwealth back even further and jeopardizes the substantial health care gains we’ve made over the past three years. It would also pull billions of federal dollars from our economy, which is still in recovery from the recession. No matter which version of ACA repeal you look at, the results are the same – a catastrophe for Kentuckians’ health and our economy.

The Many Harms of the American Health Care Act for Kentucky

The House of Representatives is moving toward a possible vote Friday on an amended version of the American Health Care Act (AHCA), their plan to repeal the Affordable Care Act (ACA). The bill contains the same harmful changes as before: it would dramatically reduce the number of Kentuckians with health coverage, make plans more expensive for those buying insurance through the marketplace and shift billions of dollars to the Kentucky state budget — all while providing large tax cuts to millionaires. And the amendments make the bill even worse, allowing states to remove protections for people with pre-existing conditions.

Here are some of KCEP’s resources on the impacts in Kentucky:

Kentucky is Making Major Progress Because of the Affordable Care Act

New Reports Highlight Kentucky’s Gains in Care and Health
Despite claims from some political leaders that Kentucky’s coverage gains were not met with access to care and better health, new reports and recent data show Kentuckians are getting needed preventive care and health indicators are already improving.

Kentucky’s ACA Health Insurance Marketplace Is Not Falling Apart
Far from collapsing, the health insurance exchanges set up by the ACA are a way many Kentuckians are now able to buy health insurance. It will be important for the 81,155 Kentuckians who depend on that coverage that those in Washington keep it stable rather than undermine it with administrative changes, repeal of the ACA or even reckless public statements that cause insurance companies to question their participation.

The AHCA Would Be a Disaster for Kentucky

Eastern Kentucky Would Be Hardest Hit Place in Country by Job Loss from ACA Repeal
Passing the American Health Care Act would eliminate jobs in Kentucky by taking billions of dollars out of doctors’ offices, hospitals and local economies. According to one report, Kentucky’s 5th district — represented in Congress by Hal Rogers — would lose more jobs than any congressional district in the country, at over 20,000 jobs by 2022.

Kentuckians’ Marketplace Health Care Costs Would Rise $1,804 Under AHCA
The plan would drive up the cost for people buying insurance through the marketplace by reducing tax credits for many people and raising out of pocket expenses — an average cost increase of $1,804 for Kentuckians and much more for older people.

House Health Repeal Would Shift $16 Billion to the Kentucky State Budget
By ending enhanced funding for the Medicaid expansion and placing a cap on traditional Medicaid funding that will squeeze the program in the future, the plan would shift $16 billion in costs to Kentucky’s state budget over a ten year period — inevitably leading to big cuts in enrollment and benefits.

Tiny Fraction of Wealthiest Kentuckians Gain from Tax Cuts in Health Repeal
The AHCA provides big tax cuts to millionaires, and Kentucky has less than half the US average of wealthy people who would even receive a tax cut — even while the state has among the most to lose from people becoming uninsured.

What’s at Stake in ACA Repeal by Congressional District
Kentucky has 3 of the 25 congressional districts with the most to lose in health coverage gains from repeal of the Affordable Care Act, with Representative Hal Rogers’ district ranked 3rd of all 435 districts. As detailed in these fact sheets, every district in the state would be hit hard by the AHCA.

House Health Repeal Plan Would Worsen Kentucky’s Drug Problems
The ACA is playing a key role in helping combat Kentucky’s raging opioid epidemic, but the AHCA would roll back opportunities for treatment by reducing the number of people covered and allowing states to drop coverage of substance abuse treatment in Medicaid and no longer allow it in private plans.

Coverage for Kentucky Seniors Threatened by House Plan
The House plan would especially reduce coverage and affordability for older adults in Kentucky, including those seeking to buy coverage in the marketplace and those covered by Medicaid.

House Plan Unwinds Coverage Gains and Makes Harmful Changes to Medicaid Program
Our summary of the bill: it would unravel Kentucky’s highly successful Medicaid expansion, end Medicaid as we know it and raise costs for people buying insurance.

A County-by-County Look at Kentuckians at Risk if Congress Rolls Back Health Coverage
Nearly one in three Kentuckians has health insurance either through Medicaid or the marketplace, and the share reaches as high as 68 percent in 1 rural Kentucky county. Medicaid especially provides access to coverage and boosts local economies, and cutting and capping the program would be devastating to Kentucky’s health and economic well-being.

The Amended Bill Makes the AHCA Even Worse

New Amendment to Heathcare Repeal Bill Threatens Kentuckians with Pre-existing Conditions
The amendment makes the AHCA worse by jeopardizing coverage for the 1.8 million Kentuckians under 65 who have some kind of pre-existing condition, which is 50 percent of the non-elderly population.

Getting Rid of Essential Health Benefits Means Less Coverage, More Cost for Kentuckians
The amended version of the AHCA gives states the option of no longer requiring insurers to cover ten essential health benefits, including maternity care, pediatric dental services and mental health and substance abuse treatment.

Kentucky’s Experience with High Risk Pool Shows Danger of ACA Repeal
The amended bill means people with pre-existing conditions could no longer access affordable coverage, and relies on possible state “high risk pools” to cover people with expensive conditions. But evidence from Kentucky’s high risk pool shows why they don’t work.

 

 

Testimony for Congressman Yarmuth’s ACA Repeal Forum

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Intro:

Good afternoon, my name is Dustin Pugel and I’m a research and policy associate with the Kentucky Center for Economic Policy, a think tank that seeks to improve the quality of life for all Kentuckians through better public policies.

Communities thrive when they have a strong foundation made up of things like good education, safe streets, and affordable, quality healthcare. The Affordable Care Act (ACA) has empowered Kentucky to bring healthcare to half a million of our most vulnerable, protect ourselves from harmful insurance practices, strengthen our healthcare system and boost our economy. There are so many reasons not to move backward on the progress we’ve made.

I want to briefly run down what experts believe a repeal of the ACA would mean for the commonwealth. Many people forget, but it was originally called the “Patient Protection and Affordable Care Act,” so I think it’s helpful to talk about what repeal would mean in these terms:

  • What kinds of affordable care are in jeopardy,
  • What patient protections are poised to be lost,
  • And finally, how those changes will hurt our economy, jobs and state budget.

Affordable Care:

In considering a repeal’s effect on affordable care, first and foremost, an estimated 486,000 Kentuckians would lose insurance coverage. That loss of insurance coverage is a tripling of the number of uninsured in Kentucky. This decline would come from people losing Medicaid and federal insurance subsidies, people no longer being required to be insured (known as the individual mandate) and the individual insurance market entering into what is called a death spiral.

Because a repeal would disproportionately harm states that expanded Medicaid and saw large decreases in their uninsured, Kentucky is among the states with the most to lose. In fact, we would have the third largest increase in the rate of uninsured in the country.

These same plans to repeal would also result in a huge decline in 2019 federal spending in the commonwealth on Medicaid expansion and insurance policy subsidies. Between 2019 and 2028 Kentucky would receive nearly $50 billion less in federal dollars. This federal money injected into our economy has resulted in large employment gains in the healthcare sector and steep declines in the amount of money healthcare providers spend on uninsured patients, called charity or uncompensated care. Nationally, the Urban Institute expects there to be a $1.1 trillion increase in demand for uncompensated care between 2019 and 2028 if repeal moves forward.

Patient Protections:

When it comes to the protections we would lose as Kentuckians, the healthcare reform law is expansive and complex, but a few critical protections stand out, such as:

1.9 million privately insured Kentuckians as well as 863,000 seniors on Medicare could lose free preventative care like immunizations, blood pressure screenings and cancer screenings.

1.4 million Kentuckians, including children, could see caps placed on the amount an insurer would spend over each person’s lifetime, or even each year — cutting off coverage for the sickest individuals when they most need it.

Women could be charged premiums as high as 57 percent more than men.

All insured Kentuckians could lose protection from being overcharged by insurance companies. Since the ACA was passed, companies have refunded Kentuckians $33.3 million that weren’t needed for administration or care.

The ACA also included a provision that corrects a glitch in Medicare prescription coverage that led to some prescription drugs becoming too expensive. But an ACA repeal would mean disabled and older Kentuckians would pay more for prescription drugs, or else forgo them entirely. The average savings for affected Kentuckians was $1,108 per person in 2015 alone.

One especially popular part of the law is the requirement that insurers not deny coverage to someone with a preexisting condition. One of the biggest problems lawmakers will encounter when attempting to repeal the ACA is that the preexisting conditions provision creates a double bind.

On the one hand, if it is repealed, 1.9 million Kentuckians with conditions like asthma, diabetes, cancer and even pregnancy could see their premiums dramatically increase, or simply be denied insurance coverage all together. On the other hand, if the preexisting coverage protection stays, but the individual mandate is repealed, then insurers will be left with expensive, sick enrollees, while the healthy, inexpensive enrollees leave the market. The end result is what’s called a death spiral, when insurers have to increase costs, so more people pull out because they can’t afford it, until insurance companies decide not to offer individual plans anymore. This would be devastating for the hundreds of thousands of Kentuckians who buy insurance directly from an insurance company.

Economic Ripples:

The billions of federal dollars that have been pumped into Kentucky have had a major impact on our economy. If repeal moves forward and that money suddenly evaporates, every part of the state will feel it.

According to the Commonwealth Fund, of the 45,000 jobs that would be lost in 2019 because of repeal, 38 percent would be in the healthcare sector. The rest would come from construction, real estate, retail, finance and other industries.

Over five years beginning in 2019, Kentucky’s business output would lose nearly $41 billion in value in addition to $24 billion less in federal spending. With such a dramatic drop in our state’s economic activity, the state would see $718 million less in revenue in the midst of a health crisis and a massive pension liability that has already pushed lawmakers to undermine critical state services.

ACA repeal would wreak havoc on Kentucky:

The Affordable Care Act has been a lifeline to Kentuckians who either gained healthcare coverage through the Medicaid expansion and insurance subsidies, or have been protected from harmful practices banned by provisions in the law. Our economy has benefitted from a large influx in federal funds that have boosted job growth and invigorated local economies.

Instead of building on these successes, repealing the ACA would wreak havoc on our healthcare system and reverberate throughout the commonwealth. People would be left without access to needed treatment, healthcare providers would see their revenues shrink and potentially lead them to close their doors, and state government would be forced to further cut vital services as it deals with a smaller state coffer. Congress can and should improve on the ACA, and any public healthcare program, so that more Kentuckians have quality, affordable healthcare, but instead it is tilting full steam toward repeal. Kentucky’s representatives in Washington should be aware of the damage that would cause back home.

Many Kentucky Workers Have Gained Insurance through the Medicaid Expansion and Are Now at Risk

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Thousands of Kentuckians who work low wage jobs at restaurants, on construction sites and at retail stores are among those who have gained health insurance because of Kentucky’s decision to expand Medicaid under the Affordable Care Act (ACA), newly-available Census data show. These workers’ access to care is now at risk if the ACA is repealed or Kentucky takes steps backward on the expansion, harming our economy and the health of our state.

Over half of all Medicaid eligible Kentuckians who gained health insurance between 2013 and 2015 held a job, according to American Community Survey data. When you factor in the same low-income Kentuckians who held a job at some point in the past five years that proportion grows to nearly 4 in 5.

The biggest industries where workers have gained coverage are as follows:

  • Restaurant and food services, where there are 15,980 more insured workers. Whereas 58 percent of workers in that sector whose family incomes were below the eligibility level for Medicaid under the expansion were uninsured in 2013, only 23 percent were uninsured in 2015. 1
  • Construction, with 6,190 workers gaining health insurance and an uninsured rate that fell from 63 percent to 20 percent.
  • Department and discount stores, with 6,120 workers gaining health insurance and an uninsured rate that fell from 50 percent to 5 percent.

The next largest groups of workers with coverage gains were those employed in gas stations, auto manufacturing, grocery stores, hospitals, children’s day care, general merchandise stores and landscaping services (see chart on following page).

Kentucky is a national leader in health coverage gains under the Affordable Care Act. 2 While most of those who are gaining insurance are working, they are in jobs that do not offer them coverage. The share of Kentucky workers who had access to health insurance through their employer has gradually fallen from 70 percent in 1980-1982 to only 53.7 percent in 2011-2013. 3 Medicaid, as well as access to private insurance with the help of tax credits, are helping fill the gaps left by an eroding employer-based insurance system.

Kentucky ranks near the bottom on many health measures, making our decision to expand Medicaid that much more important. Recent studies from the Chan School of Public Health at Harvard show progress: Kentuckians are getting more preventative screenings and care, more care for chronic conditions that otherwise worsen more severely over time and even report having better health.4 Their ability to go to the doctor for regular checkups and when sick means the rest of the state can stay healthier.

Those gains are seriously threatened with the newly-elected president and Congress promising to repeal the Affordable Care Act, which provided for Medicaid to be expanded in the first place. Doing so would result in an estimated 29.8 million fewer Americans having health insurance, and millions more being vulnerable to many of the harmful practices insurers are currently barred from using.5 Also, the recent request to make changes to Kentucky’s Medicaid program puts the state’s gains at risk. With barriers to coverage, reduced benefits and administrative complexity that both adds unnecessary cost and confusion for beneficiaries, much of the progress we’ve seen would start to move backward under such a plan. 6

It’s important that federal and state lawmakers protect the advances we are making in health care for the sake of workers and the entire economy.

top-10-industries-with-medicaid-eligible-insurance-gains-2015

 

 

  1.  Report looks at citizens ages 19 through 64 in families with income at or below 138 percent of the federal poverty line who have worked within the past twelve months. Citizens are the focus because the Medicaid expansion is generally unavailable for non-citizens.
  2. US Census Bureau, “Health Insurance Coverage in the United States: 2015,” September 2016, https://www.census.gov/library/publications/2016/demo/p60-257.html.
  3. Economic Policy Institute analysis of Current Population Survey March supplement.
  4. B.D. Sommers, R.J. Blendon, & E.J. Orav, “Both the ‘Private Option’ and Traditional Medicaid Expansions Improved Access to Care for Low-Income Adults,” Health Affairs, January 2016 35(1):96–105, http://content.healthaffairs.org/content/35/1/96.full?keytype=ref&siteid=healthaff&ijkey=A6hBKcGzMrX2A.                   B.D. Sommers, R.J. Blendon, E.J. Orav & A.M. Epstein, “Changes in Utilization and Health among Low-Income Adults After Medicaid Expansion or Expanded Private Insurance,” JAMA Internal Medicine, August 8, 2016, http://archinte.jamanetwork.com/article.aspx?articleid=2542420.
  5. L. Blumberg, M. Buettgens, & J. Holahan, “Implications of Partial Repeal of the ACA through Reconciliation,” Urban Institute, December, 2016, http://www.urban.org/research/publication/implications-partial-repeal-aca-through-reconciliation.
  6.  Dustin Pugel & Jason Bailey, “Proposed Medicaid Waiver Would Reduce Coverage and Move Kentucky Backward on Health Progress,” Kentucky Center for Economic Policy, October 7, 2016, http://kypolicy.org/dash/wp-content/uploads/2016/07/1115-Medicaid-Waiver-Federal-Comments-KCEP.pdf.

Proposed Medicaid Waiver Would Reduce Coverage and Move Kentucky Backward on Health Progress

To view KCEP’s comments for the federal comment period, click here.

To view this brief in PDF form, click here.

Kentucky is applying to modify its Medicaid program through a waiver under Section 1115 of the Social Security Act. The proposed changes will result in fewer Kentuckians covered and decrease health care access, which will ultimately harm the health status of Kentuckians and move the state backwards in its recent health care gains. And while the proposal is framed in terms of increased financial sustainability and reduced costs, it can end up costing the state more overall as it introduces new, expensive and complex administrative burdens, and limits access to the preventative care that improves health. In the end, rolling back Kentucky’s historic gains in healthcare coverage would be antithetical to the goals of the Medicaid program and the 1115 waiver process and hurt the many Kentuckians who benefit from the Medicaid program in its current form.

How far we’ve come, and what is at stake

Kentucky’s Medicaid participants include thousands of working families, veterans, pregnant women and people with disabilities, as well as hundreds of thousands of children and seniors. Current enrollees include the following:

  • Children: 561,326 (39 percent) of enrollees are children.
  • Working adults: The majority of Medicaid-eligible adults who gained coverage under the expansion in 2014 in Kentucky were low-wage workers 1.
  • Veterans: An estimated 9,500 uninsured Kentucky veterans and 5,300 uninsured spouses of veterans became newly eligible for Medicaid under the expansion.
  • Pregnant women and infants: 43.6 percent of all births in Kentucky were covered by Medicaid in 2010 (the most recent year for which data were published).
  • Seniors: 90,794 of current Kentucky Medicaid enrollees are ages 65 and older.
  • Disabled or requiring long-term care: 161,380 Kentucky Medicaid enrollees are eligible through disability, blindness, long-term care needs or brain injury for which they require care either in a facility or at home.

Kentucky is a national leader in its substantial reduction in the uninsured rate under the Affordable Care Act; the share of the population without insurance dropped from 20.4 percent in 2013 to 7.5 percent in 2015, according to Gallup. The Medicaid and marketplace enrollment counts show these coverage gains were driven largely by the Medicaid expansion in 2014, which increased eligibility to up to 138 percent of the federal poverty level. Coverage alone is not the end goal, but it is the basis for better access to care, prevention of disease, cost-efficiency of long-term health spending and (over time) tremendous public health gains including reductions in preventable mortality.

As summarized by the Center on Budget and Policy Priorities, “Numerous studies show that Medicaid has helped make millions of Americans healthier by improving access to preventative and primary care and by protecting against (and providing care for) serious diseases. For example, expansions of Medicaid eligibility for low-income children in the late 1980s and early 1990s led to a 5.1 percent reduction in childhood deaths. Also, expansions of Medicaid coverage for low-income pregnant women led to an 8.5 percent reduction in infant mortality and a 7.8 percent reduction in the incidence of low birth weight. 2 ” When compared to Texas in 2014, which did not expand its Medicaid program, low-income Kentuckians were more likely to take prescribed medicines; more likely to receive regular care for chronic diseases such as asthma, hypertension, and depression; were more able to pay medical bills; and were less likely to use the ER as a usual source of care 3 .

In Kentucky, increased coverage has led to better access to services, including many forms of preventative care. State Medicaid data shows hundreds of thousands of people are using their new coverage for such cost-effective purposes. Comparing 2013 to 2014, the following services were funded by Medicaid:

  • Cholesterol screening, 80,769 to 170,514 (up 111 percent).
  • Preventative dental services, 73,739 to 159,508 (up 116 percent).
  • Hemoglobin A1c tests (diabetes), 52,685 to 101,360 (up 92 percent)
  • Cervical cancer screenings, 41,613 to 78,281 (up 88 percent).
  • Breast cancer screenings, 24,386 to 51,292 (up 111 percent).
  • Annual influenza vaccinations, 14,090 to 34,305 (up 143 percent).
  • Colorectal cancer screenings, 17,164 to 35,633 (up 108 percent).
  • Tobacco use counseling and interventions, 406 to 1,094 (up 169 percent).

Although each service does have a cost, the services being used by the expansion population are, for the most part, not the services that drive overall Medicaid spending. These enrollees are relatively inexpensive to cover and the coverage allows them to maintain health and continue working and caring for their families. And when a screening does indicate cancer or diabetes, it is still money well-spent 4 . Left undiagnosed or untreated, these conditions worsen and become more complicated (and expensive) to treat later on.

Kentucky’s current Medicaid program also has a positive impact on Kentucky’s economy, an impact that this waiver would put in jeopardy. For example, the General Fund savings Kentucky will realize because of Medicaid expansion in 2017 and 2018 from spending on public health, mental health, indigent care and other areas surpasses what the state will have to put in to match the federal investment. Even when 10 percent of the cost must be covered by the state beginning in 2020, the return on the state’s net contribution will be large after taking into account these savings, the additional tax revenue resulting from job creation due to the injection of federal dollars and the health benefits for our communities and workforce.

Waiver 1

Over $2.9 billion has flowed to health care providers because of Medicaid expansion as of last October. Such an influx of funds to the healthcare system has had an impact on jobs in the state. According to Bureau of Labor Statistics data, after modest growth in health care and social assistance jobs during the first year of Medicaid expansion, growth picked up at a rapid pace in 2015. The sector grew 5.5 percent from 2014 to 2016, compared to 3.4 percent growth overall (see graph below). That growth results in income and sales tax revenue to the Commonwealth 5. Also, everyone saves when fewer people let health problems go untreated only to use expensive emergency room care later 6.  Hospitals saw a reduction of $1.15 billion in uncompensated care from treating patients without health insurance during the first three quarters of coverage year 2014 when compared to the same time period a year before 7.

Waiver 2

Source: KCEP analysis of Bureau of Labor Statistics data.

Waiver does not meet criteria set forward in law

The purpose of 1115 waivers is to provide flexibility to create and share better methods of providing health coverage and care. Waivers ultimately should result in a healthier population. They should also be rooted in evidence that the changes proposed can be made without harming the people Medicaid seeks to serve. We strongly believe that far from benefitting Kentuckians, there is evidence this waiver would be detrimental to the most vulnerable citizens in the Commonwealth. This result becomes clear when looking at the components of the proposal through the lens of the four criteria the Centers for Medicare and Medicaid Services (CMS) use to evaluate an 1115 waiver:

  • Increase and strengthen overall coverage of low-income individuals in the state.
  • Increase access to, stabilize and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state.
  • Improve health outcomes for Medicaid and other low-income populations in the state.
  • Increase the efficiency and quality of care for Medicaid and other low-income populations through initiatives to transform service delivery networks.

1. Will this waiver increase and strengthen overall coverage of low-income individuals in the state?

The waiver is projected to result in fewer people enrolled because it includes a number of measures shown to reduce coverage, including denying benefits to people who don’t pay premiums or fail to re-enroll in time and locking them out for a period of time as well as work requirements for maintaining coverage. Ample past research shows such barriers will reduce the number of people who can participate. But the purpose of 1115 Medicaid waivers is to test ways to expand coverage or otherwise improve care, not move backwards on health care access.

The waiver is designed to reduce coverage

The Medicaid waiver proposal claims the changes will save $2.2 billion in federal and state money over the first 5 years of the program. But the waiver document shows those savings would occur because fewer Kentuckians are covered.

The data provided shows 17,833 fewer people will be covered by Medicaid in the first year of the demonstration compared to not having the waiver, a number that would grow to 85,917 in year 5 (data from report presents “member months,” and the table below converts that to number of full-year members by dividing by 12. The actual number of members who would lose coverage would be larger as those who lose coverage for portions of a year are taken into account).

Waiver 3

Source: KCEP calculations from Kentucky HEALTH document.

Other elements of the waiver don’t explain the projected cost savings because the estimated cost per member, per month is actually slightly higher for the Medicaid expansion population under the waiver, though it is slightly lower for children and non-expansion adults.

Evidence does not support that the waiver will result in members’ incomes increasing such that they are no longer Medicaid eligible

The administration suggests coverage reduction will happen in part because they will move people to private insurance plans; in addition, their incomes would need to rise above 138 percent of poverty so  they are no longer eligible for either regular Medicaid or premium assistance and wrap-around coverage. But it is unclear what evidence is being used to connect the assumed increase in economic well-being to the measures and requirements included in the plan.

The assumption that promoting work will somehow lead to this outcome is at odds with the research on work requirements (reviewed below) and the reality that the majority of those who have gotten coverage from the Medicaid expansion are working now; they just work in jobs where they cannot afford or are not offered coverage 8. Many workers are Medicaid recipients because a large portion of jobs pay low wages while wage growth has been stagnant, and because rising health care costs over the last few decades have led employers to shed responsibility for coverage. Whereas 70 percent of Kentucky workers had employer-based coverage in 1980, only 56 percent do today 9. Even if the minority who are not working were to suddenly gain employment — which evidence does not support would result from these requirements — it should not be expected that many would obtain jobs that lift them above 138 percent of the federal poverty level.

Experience with past safety net programs shows that work requirements do not increase well-being

In spite of a rejection of work requirements in every other state that has proposed them (including Indiana and Pennsylvania), this waiver seeks to require work or community engagement activities as both an expectation for coverage and an incentive for added benefits. However, it has been long demonstrated that work requirements in other safety net programs are not only ineffective in promoting long-term employment and wage growth, but have led to a greater likelihood of being stuck in deep poverty – at or below 50 percent of the federal poverty level 10.

The Center on Budget and Policy Priorities’ analysis of potential work requirements for Medicaid eligibility determined that such requirements would ‘unravel’ many gains from the Medicaid expansion without increasing employment:

Imposing a work requirement in Medicaid thus could undo some of the Medicaid expansion’s success in covering the uninsured… The Medicaid expansion has enabled states to provide needed care to uninsured people whose health conditions have often been a barrier to employment, including people leaving the criminal justice system who have mental illness or substance use disorders and for whom access to health care can reduce recidivism and improve employability.  Connecting these vulnerable populations with needed care can improve their health, help stabilize their housing or other circumstances, and ultimately improve their ability to work.  These gains would be eroded if a work requirement led to significant numbers of these individuals losing coverage and being unable to access health care that they need 11.

Also, as already mentioned, most Kentuckians getting coverage because of Medicaid expansion don’t need an incentive to work because they are already working, they are just working in low-wage jobs where they can’t afford or are not offered health insurance through their employer. In the first year of Medicaid expansion, those who gained coverage most commonly worked in restaurants and food services followed by construction, temp agencies, retail stores, building services like cleaning and janitorial services and grocery stores. These kinds of jobs usually have limited benefits, if any.

Many Kentucky workers make low wages — in fact, in 2014 30 percent made wages that would put them below the federal poverty line for a family of four. Wages are low and also have been stagnant or declining across the bottom of the wage distribution after adjusting for inflation over the last 15 years. Because the waiver creates an escalating level of premiums for those who remain Medicaid eligible, it punishes workers for the low wages and wage stagnation that are beyond their control.

In addition, jobs are lacking in significant parts of the state as Kentucky still seeks to recover from the Great Recession and as fundamental restructuring of industries like mining and manufacturing have left certain communities with far fewer jobs than are needed. Only 28 of Kentucky’s 120 counties have more people employed now than in 2007 — before the Great Recession hit — and 24 counties have seen more than a 20 percent decline in employment 12. Those decreases are not because of a sudden unwillingness to work, but because jobs were eliminated and have not been replaced. The shortage of jobs is likely to exacerbate the extent to which work requirements result in losses of coverage rather than increases in employment.

Other Kentuckians face significant barriers to better employment including a criminal record, lack of education and training, inability to afford transportation and other hurdles. Absent a more comprehensive solution to create jobs and remove barriers, measures to make health coverage contingent on certain activities will result in fewer people covered.

Premiums are a barrier to coverage

According to an extensive body of research, premiums create a barrier for health coverage for many low-income individuals. For instance, Oregon received approval in 2003 to increase the premiums it charged participants in its Medicaid waiver program and also impose a six month lock-out period for non-payment of premiums; a study found that following these changes, enrollment in the program dropped by almost half 13. Similar effects occurred with programs in Utah, Washington and Wisconsin 14. All five states that have instituted premiums for their expansion populations have seen either an increase in collectable debt among enrollees, a decrease in enrollment or at the very least an increase in churn in and out of the Medicaid program 15. Finally, since many employers don’t offer coverage, escalating premiums are an ineffective incentive for moving people off of Medicaid on to employer-sponsored health insurance. They become, in effect, a penalty for being poor – especially as they increase over time while wages in low-income jobs remain flat. Escalating premiums are also harmful for entrepreneurs whose businesses often struggle in the early years after start-up; this proposal would introduce a graduating cost to those individuals just as their businesses are getting off the ground.

Instituting a lock-out period will lead to fewer people covered

A mandatory six-month lock-out for failure to re-enroll on time or to pay premiums on time for a population already struggling with low wages will almost certainly leave people without coverage. As of April of this year, Indiana had not publicly revealed how many people had been shut out of health coverage through their lock-out period, but given the thousands who had been disenrolled for failure to pay premiums, it is likely that the ranks of uninsured adults have swelled.

Reducing some benefits is another method of reducing coverage

The waiver proposal refers to benefits such as vision and dental coverage as “enhanced benefits” that people should earn back rather than be guaranteed. This stance reflects a dangerous departure from the recognized impact that oral and vision screenings and preventative care play in maintaining health as a whole. Though modest in cost, these benefits are a critical part of Medicaid coverage.

In addition, removing retroactive coverage and non-emergency medical transportation (NEMT) will create added barriers to coverage and the utilization of coverage. By eliminating retroactive coverage, there is risk of individuals facing unpayable bills, which would be further aggravated by the fact that they will owe premiums. Getting to and from treatment, especially in rural parts of the state, is often a challenge, which is why NEMT is such an important component of our state’s healthcare success. In two expansion states (Nevada and New Jersey) adults who newly received coverage through Medicaid and used NEMT did so largely (40 and 30 percent respectively) to get to treatment for mental illness and substance abuse 16. Removing this benefit would limit effective coverage for many Kentuckians who have difficulty with personal transportation, and could exacerbate drug abuse and mental health problems already rampant across the Commonwealth.

Waiver 4

2. Will it increase access to, stabilize and strengthen providers and provider networks available to serve Medicaid and low-income populations in the state?

Provider networks and providers will likely become even less available to those covered by Medicaid and low-income populations in Kentucky under this waiver. Specifically, in the case of vision and dental providers who already receive low reimbursement rates for the services they provide to Medicaid recipients, making coverage for such services contingent upon community engagement activities and healthy behavior incentives will likely reduce the number of people who use such services. It is likely that providers will no longer see it as worthwhile to continue accepting such inconsistent coverage.

Moreover, healthcare providers who serve patients that have a blend of employer-sponsored health-insurance and Medicaid, as the waiver would promote, will have to determine which insurer to bill, and create systems to be able to make those determinations. This will add more administrative overhead and inefficiency in delivering care. Some small, vulnerable providers may have to discontinue accepting Medicaid coverage because they are unable to afford the added administrative costs.

3. Will the waiver improve health outcomes for Medicaid and other low-income populations in the state?

Reductions in the number of people covered by Medicaid, disincentives for using benefits and the elimination of dental and vision coverage will not lead to healthier Kentuckians. The idea that community engagement activities, cost-sharing measures and financial or health literacy courses will result in better health outcomes is not supported by evidence. However, higher rates of coverage have been associated with better health outcomes, particularly those that can lead to early diagnosis of preventable conditions.

Dental and vision coverage are critical to wellness

Though the waiver refers to these benefits as “enhanced,” they should be viewed as necessary, basic benefits essential for health. Both of these routine services offer critical opportunities for specialized early diagnosis and preventative treatment that often cannot be offered in a primary care appointment. Such care is especially needed because Kentucky already has poor oral health and significant vision impairment, and because routine appointments with dentists and optometrists save money and sometimes lives.

The American Dental Association recommends that good oral health requires a minimum of one cleaning and check-up per year. The 2013 Kentucky Health Issues Poll found that individuals are much more likely to see a dentist if they are insured, or well off 17. Only 43 percent of uninsured Kentuckians saw a dentist in the past year, versus 70 percent of those who were insured.

Kentucky’s oral health reflects its low levels of dental care, and reducing access would only worsen these problems. A study by the Center for Health Workforce Studies shows 18:

  • Kentucky ranked eighth in 2012 for adults who had a tooth extracted because of tooth decay or gum disease.
  • Kentucky ranked 5th in 2012 for adults 65 years or older who had 6 or more teeth extracted for the same reasons. While this population is largely covered by Medicare, tooth decay is a long-term preventable condition that would have started much earlier.
  • Similarly, for Kentuckians aged 65 or older, 23.5 percent had untreated dental cavities, 19.3 had oral pain within the last 3 months and 22.1 percent had trouble chewing food.

Low-income Kentuckians are disproportionately affected by bad oral health. For instance, 28 percent of low-income Kentuckians surveyed by the American Dental Association in 2015 said the appearance of their mouth and teeth affects their ability to interview for a job, versus 17 percent of middle and high income Kentuckians. They were also more likely to report that life was less satisfying because of a dental condition and were more likely to have problems like dry mouth, difficulty biting and chewing, pain, avoiding smiling, embarrassment, anxiety, problems sleeping, reduced social participation, difficulty with speech, difficulty doing usual activities and taking days off from work due to oral conditions.

Although poor dental health can be debilitating on its own, there are several ways in which oral health is connected to more serious health problems. Problems with oral health have been linked to diabetes, stroke, adverse pregnancy outcomes and cardiovascular disease. Dental cavities left untreated often lead to secondary infections that can become life-threatening. Routine oral exams often lead to early detection of other diseases that display symptoms in the mouth, enabling less costly diagnosis and treatment.

Medicaid’s provision of dental coverage is cost effective. Trips to the emergency room (ER) for dental-related conditions (which are covered by Medicaid) are expensive and often preventable through routine dental visits. Dental-related ER care is at least 3 times as expensive as a dental visit – $749 for non-hospitalized care 19. States that report ER visits show large numbers of patients who receive costly care for conditions that could have been prevented in a dentist’s office 20. Medicaid is the primary payer for 35 percent of all dental-related ER visits, which amounted to $540 million in 2012 21, but it only makes up 28.1 percent of non-dental-related ER visits. According to Pew, when California ended its dental care for 3.5 million low-income adults in 2009, ER use for dental pain increased 68 percent; in 2014 adult dental benefits to eligible Californians were restored.

ER visits do not typically treat the underlying dental disease, so issues like infection can reoccur, leading to costlier and repeated emergency room visits. Dental pain is also the leading gateway to opioid addiction, and doing more to prevent such pain is critical to addressing Kentucky’s drug problem.

Dental care is relatively inexpensive as a Medicaid benefit. Given current Medicaid spending per patient, utilization rates and reimbursement rates in states that offer dental benefits, the Health Policy Institute estimated that it would cost an extra 0.7 percent to 1.9 percent for the other states to begin offering that benefit 22. In 2014, the 29 states that offered some dental benefit through Medicaid collectively spent $10.1 of $327.5 billion on dental care. This means only three percent of Medicaid expenditures were spent on dental care.

Likewise, the health consequences of eliminating vision coverage for routine screenings would likely be significant. The Centers for Disease Control notes early detection, diagnosis and treatment can prevent significant loss of vision, and “people with vision loss are more likely to report depression, diabetes, hearing impairment, stroke, falls, cognitive decline and premature death. 23

In Kentucky there are an estimated 192,060 people who are either blind or have serious difficulty seeing even when wearing glasses, according to 5 year estimates of the 2014 American Community Survey. This represents roughly 1 in 20 Kentuckians who aren’t in an institution like a nursing home. On a county level, vision impairment ranges from 1.5 percent in Gallatin county to 12.7 percent in Pike county.

Because diabetic retinopathy — or vision loss from diabetes — is a leading cause of blindness, early detection of diabetes often starts in an optometrist’s office. Other conditions like glaucoma and cataracts are also often detected early during annual vision screenings, before they become more difficult and costly to treat.

The current Medicaid vision benefit in Kentucky is modest, and only covers exams and diagnostic procedures at optometrist and ophthalmologist offices. Glasses (lenses, frames and repairs) are only covered for Kentuckians up to age 21, so most Kentucky adults are still responsible for buying their own eyewear and contacts out of pocket 24.

In the administration’s waiver proposal, beneficiaries could “earn back” vision and dental benefits by completing “specified health-related or community engagement activities.” But evaluations of similar incentive programs in Iowa and Michigan suggest few people likely would earn such incentives, leading to a big drop in the number of people with coverage 25.

Lower rates of coverage will result in poorer health outcomes

Findings from the ongoing Oregon Health Study show  Medicaid beneficiaries were less likely than those without insurance to suffer from depression and more likely to be diagnosed with and treated for diabetes. Those with Medicaid were also far more likely to access preventative care such as mammograms for women 26.  Another study found that 5 years after 3 states expanded Medicaid, expansion was associated with a 6.1 percent reduction in mortality 27. Recipients were also more likely to report that their health was “excellent” or “very good” and less likely to report delaying care due to costs 28.[vi] With the recent increase in screenings and other forms of preventative care in Kentucky, we can expect similar results. But as coverage is either taken away in the case of dental, vision or lock-out periods, or made less available in the case of premiums and work requirements, health outcomes will almost certainly decline.

4. Will the waiver increase the efficiency and quality of care for Medicaid and other low-income populations through initiatives to transform service delivery networks?

The waiver proposal would increase inefficiencies and add costs by creating complex new bureaucratic systems to track payments, activities and other elements that will shift dollars away from care and are likely to cost more than the revenue that is generated. While cost savings is stated as a primary purpose for submitting this waiver, it is not a sufficient criterion for an acceptable waiver on its own. Further, proposed changes would likely not even save money other than by reducing the number of people covered under the program — which could result in higher costs in the long-term as more Kentuckians are treated in the emergency room for expensive conditions that could have been managed through earlier intervention.

Added administrative costs and bureaucratic complexities will be expensive and inefficient

Creating new requirements for premiums means creating state administrative structures to bill, collect, track, answer customer questions and otherwise administer the program, including tracking expenditures against each enrollee’s income to ensure that premiums collected remain under federal caps. Also, the state must set up systems to manage two Health Savings Accounts (HSA) for each individual in the program (a deductible account and a “MyRewards” account), including tracking activities that earn credits and making payments between, into and out of the accounts. This tracking would require either expanded state government structures, or having the state contract (and oversee) the service to a third party.

Other states have examined the costs of collecting premiums in Medicaid programs and found the costs of collection typically exceed revenue collected. For example, several years ago Virginia introduced $15 monthly premiums to some families, but cancelled the program when the data showed the state was spending $1.39 to collect each $1 in premiums 29. Arizona concluded  even if it charged the maximum allowed premiums, it would cost four times more to collect them than the value of the collected funds 30. Another layer of complication arises from the fact that 31.7 percent of Kentucky households with family income under $15,000 are unbanked, according to the Federal Deposit Insurance Corporation 31. This makes collecting premiums even more difficult as traditional modes of making payments will not work for a significant portion of low-income households.

Regarding HSAs, the Urban Institute’s analysis concluded, “HSAs for the poor are highly likely to be administratively inefficient. The amounts collected from individuals would be small relative to health care costs. Because there are large numbers of individuals in these programs, there would be a relatively large number of small monthly transactions. Similarly, the money that flows out of these accounts, also small amounts each time a service is used, would have to be managed…. Although these payments may lead to lower enrollment rates and more disenrollment, it is unlikely they will lead to more appropriate use of care by enrollees. 32

Beyond collecting premiums and HSA contributions, new systems for assessing, certifying and tracking work or community engagement activities, financial literacy courses and health literacy courses will have to be created and managed. The state will then have to maintain a database that is able to affirm and record that members participated in some activity so that they can get credit in their “MyRewards” account. Then there will need to be some way of determining appropriate uses of those funds as enrollees make various health-related purchases. This will add significant bureaucratic inefficiencies and cost to the existing program.

For the premium assistance component of the waiver, yet another system will need to be created in order to track what benefits are being offered through employer-sponsored health insurance plans so the state will know what additional wrap-around services it will need to provide to satisfy all the guaranteed benefits of the Medicaid program. This will require reporting from insurance companies, a database for tracking benefit coverage for employees and ongoing monitoring for any changes that occur during open enrollment each year. It will also require that providers be knowledgeable about which program to charge for the services they perform – a patient’s employer sponsored health insurance plan, or the Managed Care Organization (MCO) offering the remainder of the benefits.

With less preventative care, costs will increase over time

Limited access to or use of preventative care is likely to add greater costs in emergency room care and in other more expensive treatment as otherwise preventable conditions worsen over time. Cutting access to early screening and detection will result in more significant health problems that go undiagnosed and untreated. Again, as was demonstrated in California, when dental benefits were cut they saw a 68 percent increase in ER usage for dental pain. As people are disenrolled without other forms of coverage, they are more likely to use care without being able to pay for it – resulting in more uncompensated care for which hospitals will seek payment.

Conclusion and recommendations

The Kentucky Center for Economic Policy seeks to improve the quality of life for all Kentuckians. We believe in policies that help create communities where everyone can thrive. To that end, we support the purposes and criteria of a Medicaid 1115 waiver as stated by CMS. That is why we are so concerned about the vast majority of the provisions in Kentucky’s proposed waiver. It is not only misaligned to the criteria of a demonstration waiver, in many cases it stands in opposition to them. Some elements of the waiver such as boosts to substance abuse treatment, chronic disease management and renegotiated contracts with MCOs are laudable, but either don’t require a demonstration waiver specifically, or don’t require waiving a part of the Social Security Act at all. We encourage the administration to continue to pursue these goals separate from the current proposal.

Work/community service requirements; premiums (including an escalation of premiums over time); reductions in coverage and benefits including loss of vision, dental, retroactive coverage and non-emergency medical transportation; lock-out periods for failure to pay premiums and for missing re-enrollment deadlines; blended employer-sponsored insurance; and complex administrative and compliance structures are real threats to the historic gains in health our state has recently experienced. For the first time in recent memory, Kentucky is heading in the right direction on health, and it would be a major mistake to go backwards now. We respectfully ask that the aforementioned features of the waiver be removed prior to its submission to the Department of Health and Human Services.

  1. Jason Bailey, “Many Kentucky Workers Have Gained Insurance through the Medicaid Expansion, Are at Risk If Program Is Scaled Back,” Kentucky Center for Economic Policy, November 10, 2015, http://kypolicy.org/many-kentucky-workers-have-gained-insurance-through-the-medicaid-expansion-are-at-risk-if-program-is-scaled-back/.
  2. Center on Budget and Policy Priorities, “Policy Basics: Introduction to Medicaid,” June 19, 2015, http://www.cbpp.org/research/health/policy-basics-introduction-to-medicaid.
  3. B.D. Sommers, R.J. Blendon, & E.J. Orav, “Both the ‘Private Option’ and Traditional Medicaid Expansions Improved Access to Care for Low-Income Adults,” Health Affairs, January 2016 35(1):96–105, http://content.healthaffairs.org/content/35/1/96.full?keytype=ref&siteid=healthaff&ijkey=A6hBKcGzMrX2A.
  4. Mary Cobb, “Protecting Medicaid’s Role in Advancing a Healthy Kentucky,” Kentucky Center for Economic Policy, May 2016, http://kypolicy.org/dash/wp-content/uploads/2016/05/Medicaid-Advancing-a-Healthy-Kentucky.pdf.
  5. Jason Bailey, “With Medicaid Expansion, Kentucky Healthcare Job Growth Picked Up in 2015,” Kentucky Center for Economic Policy, March 9, 2016, http://kypolicy.org/with-medicaid-expansion-kentucky-healthcare-job-growth-picked-up-in-2015/.
  6. Jason Bailey, “It’s Kentucky’s Lack of Coverage and Poor Health that are Unsustainable, Not Medicaid,” Kentucky Center for Economic Policy, March 10, 2016, http://kypolicy.org/its-kentuckys-lack-of-coverage-and-poor-health-that-are-unsustainable-not-medicaid/.
  7. The Kaiser Commission on Medicaid and the Uninsured, “What’s at Stake in the Future of the Kentucky Medicaid Expansion?,” The Henry J. Kaiser Family Foundation, July 7, 2016, http://files.kff.org/attachment/fact-sheet-Whats-At-Stake-in-the-Future-of-the-Kentucky-Medicaid-Expansion.
  8.  Jason Bailey, “Waiver Proposal Says Cost Savings Come from Covering Fewer People,” Kentucky Center for Economic Policy, June 23, 2016, http://kypolicy.org/waiver-proposal-says-cost-savings-come-covering-fewer-people/.
  9. Bailey, Kentucky’s Lack of Coverage and Poor Health that are Unsustainable, Not Medicaid.”
  10. LaDonna Pavetti, “Work Requirements Don’t Cut Poverty,” Center on Budget and Policy Priorities, June 7, 2016, http://www.cbpp.org/blog/work-requirements-dont-cut-poverty.
  11. Hannah Katch, “Medicaid Work Requirement Would Limit Health Care Access Without Significantly Boosting Employment,” Center on Budget and Policy Priorities, July 13, 2016, http://www.cbpp.org/research/health/medicaid-work-requirement-would-limit-health-care-access-without-significantly.
  12. Jason Bailey, “Kentucky’s Lopsided Recovery Continues,” Kentucky Center for Economic Policy, May 11, 2016, http://kypolicy.org/lopsided-recovery-continues/.
  13. Jessica Schubel & Jesse Cross-Call, “Indiana’s Medicaid Expansion Waiver Proposal Needs Significant Revision,” Center on Budget and Policy Priorities, October 17, 2014, http://www.cbpp.org/research/indianas-medicaid-expansion-waiver-proposal-needs-significant-revision.
  14. Ashley Spalding, “Indiana Approach to Medicaid Expansion Limits Access to Needed Care,” Kentucky Center for Economic Policy, August 26, 2015, http://kypolicy.org/indiana-approach-to-medicaid-expansion-limits-access-to-needed-care/.
  15. Andrea Callow, “Charging Medicaid Premiums Hurts Patients and State Budgets,” Families USA, April 2016, http://familiesusa.org/product/charging-medicaid-premiums-hurts-patients-and-state-budgets.
  16. MaryBeth Musumeci & Robin Rudowitz, “Medicaid Non-Emergency Medical Transportation: Overview and Key Issues in Medicaid Expansion Waivers,” The Henry J. Kaiser Family Foundation, February 24, 2016,  http://kff.org/medicaid/issue-brief/medicaid-non-emergency-medical-transportation-overview-and-key-issues-in-medicaid-expansion-waivers/.
  17. Foundation for a Healthy Kentucky & Interact for Health, “Most Kentucky Adults have had Dental Visit in Past Year,” 2013 Kentucky Health Issue Poll, March 2014, http://healthy-ky.org/sites/default/files/KHIP%20Dental%20visits%20FINAL%20032114.pdf.
  18. S. Surdu, M. Langelier, B. Baker, S. Wang, N. Harun, D. Krohl, “Oral Health in Kentucky,” Center for Health Workforce Studies, School of Public Health, SUNY Albany, February 2016, http://chws.albany.edu/archive/uploads/2016/02/Oral_Health_Kentucky_Technical_Report_2016.pdf.
  19. Laura Ungar, “ER Visits for Dental Problems Rising,” Courier Journal, June 28, 2015, http://www.courier-journal.com/story/news/local/2015/06/24/er-visits-dental-problems-rising/29242113/.
  20.  Pew Children’s Dental Campaign, “A Costly Dental Destination: Hospital Care Means States Pay Dearly,” The Pew Center on the States, February, 2012, http://www.pewtrusts.org/~/media/assets/2012/01/16/a-costly-dental-destination.pdf.
  21. Thomas Wall & Marko Vujicic, “Emergency Department Use for Dental Conditions Continues to Increase,” Health Policy Institute, April, 2015, http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_0415_2.ashx.
  22. Cassandra Yarbrough, Marko Vujicic & Kamyar Nasseh, “Estimating the Cost of Introducing a Medicaid Adult Benefit in 22 States,” Health Policy Institute, March, 2016, http://www.ada.org/~/media/ADA/Science%20and%20Research/HPI/Files/HPIBrief_0316_1.ashx.
  23. Vision Health Initiative, “Why is vision Loss a Public Health Problem?” Centers for Disease Control, September 29, 2015, http://www.cdc.gov/visionhealth/basic_information/vision_loss.htm.
  24. Dustin Pugel, “Vision Benefit Critical to Health of Kentuckians,” Kentucky Center for Economic Policy, July 5, 2016, http://kypolicy.org/vision-benefits-critical-health-kentuckians/.
  25. Judith Solomon, “Medicaid Beneficiaries Would Lose Dental and Vision Care Under Kentucky Proposal,” Center on Budget and Policy Priorities, June 30, 2016, http://www.cbpp.org/blog/medicaid-beneficiaries-would-lose-dental-and-vision-care-under-kentucky-proposal.
  26. Katherine Baicker, et. al., “The Oregon Experiment – Effects of Medicaid on Clinical Outcomes,” The New England Journal of Medicine, May 2, 2013, http://www.nejm.org/doi/full/10.1056/NEJMsa1212321.
  27. Benjamin D. Sommers, Katherine Baicker, & Arnold M. Epstein, “Mortality and Access to Care among Adults after State Medicaid Expansions,” New England Journal of Medicine, September 13, 2012, http://www.nejm.org/doi/full/10.1056/NEJMsa1202099.
  28. Ashley Spalding, “Medicaid Expansion Will Help Kentuckians Get the Care They Need and Increase Financial Security,” Kentucky Center for Economic Policy, May 9, 2013, http://kypolicy.us/medicaid-expansion-will-help-kentuckians-get-care-need-increase-financial-security/.
  29. Tricia Brooks, “Handle with Care: How Premiums Are Administered in Medicaid, CHIP and the Marketplace Matters,” Georgetown University Health Policy Institute, Center for Children and Families, December 2013,  http://www.healthreformgps.org/ wp-content/uploads/Handle-with-Care-How-Premiums-AreAdministered.pdf.

  30. Melissa Burroughs, “The High Administrative Costs of Common Medicaid Expansion Waiver Elements,” Families USA, October 20, 2015, http://familiesusa.org/blog/2015/10/high-administrativecosts-common-medicaid-expansion-waiver-elements.
  31. Federal Deposit Insurance Corporation, “2013 National Survey of Unbanked and Underbanked Households,” 2014, https://www.economicinclusion.gov/surveys/2013household/documents/tabular-results/2013_banking_status_Kentucky.pdf.
  32. Jane B. Wishner, et al., “Medicaid Expansion, the Private Option, and Personal Responsibility Requirements: the Use of Section 1115 Waivers to Implement Medicaid Expansion Under the ACA,” Urban Institute and Robert Wood Johnson Foundation, May 2015, http://www.urban.org/sites/default/files/alfresco/ publication-pdfs/2000235-Medicaid-Expansion-The-PrivateOption-and-Personal-Responsibility-Requirements.pdf.

Approach to Medicaid Should Reflect Realities Facing Low-Income Kentuckians

Kentucky’s Medicaid waiver proposal frames the issue of health coverage for low-income Kentuckians largely as a problem of Medicaid participants’ lack of understanding about private insurance and failure to engage in work to obtain employer-based coverage. This approach includes several important misconceptions about who is receiving Medicaid, what’s happened to private insurance and how to best promote economic mobility in Kentucky.

Most Non-Disabled Adults With Medicaid Are Already Working

A key component of the 1115 waiver proposal is the addition of work requirements for non-disabled adults without children — making Medicaid coverage contingent upon working and/or doing community activities such as volunteer work and educational classes or programs. However, in contrast to the assumption that “able-bodied” adult Medicaid participants need to be incentivized to work, most already are. The majority of those who gained coverage through the Medicaid expansion in 2014, which increased eligibility to 138 percent of the federal poverty level or $33,534 for a family of 4, were low-wage workers — primarily employed in food service, construction, temp agencies and retail stores.

It is also important to note that there is already a “churn” in Medicaid enrollment in Kentucky, with participants regularly leaving Medicaid (i.e., due to income increases) at the same time that new members are enrolling.

Fewer Employers Offer Health Insurance and Its Costs Have Long Been Rising Faster than Wages

The Medicaid waiver proposal places emphasis on transitioning low-income workers to employer-sponsored health plans without addressing the main reasons they are not participating. The proposal initially encourages participants who have access to a workplace plan to participate — and ultimately requires enrollment in the workplace plan for these employees and their children, with the Medicaid program providing reimbursement for premiums (minus the premium the member is required to pay for Medicaid). The waiver plan also assumes lack of participation in private insurance has much to do with Medicaid members not understanding how private insurance works and focuses on educating members about private insurance. It does not acknowledge that employer-based insurance has been eroding for decades. The share of Kentucky workers with employer-based health coverage has declined from 70 percent in 1980 to 56 percent today.

Private insurance has become more expensive, which prices many workers out of the market even when their workplace offers a plan. Nationally average premiums for family coverage have increased much faster than workers’ earnings, which overall have barely kept up with inflation (see below). Education about how private insurance works does not increase a person’s ability to afford premiums.

Medicaid 1

Source: “How Consumers’ Cost Increases Far Outpace Wage Growth,” Jane Sarasohn-Kahn, http://www.healthpopuli.com/2015/09/23/health-consumers-cost-increases-far-outpace-wage-growth/

Those Who Aren’t Working Face Significant Barriers to Employment Not Addressed in Waiver

The barriers to employment faced by Kentuckians who are not working are typically much more difficult than simply being incentivized or punished by the state’s Medicaid program. These Kentuckians find themselves looking for work in a limited job market in large parts of the state. Those with little education and/or issues in their past that prevent them from passing a criminal background check have even fewer opportunities (and the new expungement process for non-violent felonies is an important step but expensive). Other obstacles include care responsibilities for children or family members and not having access to or being able to afford reliable transportation on a low income. Meanwhile, higher education, which can improve employment prospects, is increasingly unaffordable — even at the state’s community colleges.

Measures Like Work Requirements and Premiums Are Not Successful at Improving Economic Situations for Individuals and Families

Decades of solid research show that work requirements, premiums and other punitive measures don’t move people into better jobs and can actually drive people deeper into poverty.

According to an extensive body of research, even premiums that may seem small create a barrier for health coverage for many with low-incomes. For instance, Oregon received approval in 2003 to increase the premiums it charged participants in its Medicaid waiver program and also impose a six month lock-out period for non-payment of premiums; a study found that following these changes, enrollment in the program dropped by almost half. Similar effects occurred with programs in Utah, Washington and Wisconsin. Meanwhile, those without health coverage are vulnerable to catastrophic out-of-pocket health care costs, which are the cause of the majority of personal bankruptcies in the United States.

In addition, an array of rigorous evaluations of programs tying work requirements to public assistance show this approach is not effective at promoting employment and reducing poverty. These studies found that any employment increases were modest and faded over time; stable employment for participants proved the exception rather than the norm; most with significant barriers to employment never found work; and the large majority remained poor and some became poorer.

Waiver Proposal Says Cost Savings Come from Covering Fewer People

The Medicaid waiver proposal the administration has drafted claims the changes will save $2.2 billion over the first 5 years of the program. But the data shows those savings would occur because fewer Kentuckians are covered — the exact problem of lack of coverage Kentucky’s Medicaid expansion has been so successful at addressing.

The data provided shows 17,833 fewer people will be covered by Medicaid in the first year of the demonstration compared to not having the waiver, a number that would grow to 85,917 in year 5 (data from report presents “member months,” and the table below converts that to number of members by dividing by 12) (see more on drop in enrollment here and here).

Waiver table

Source: KCEP calculations from Kentucky HEALTH document.

Lower enrollment is the reason for the estimated $2.2 billion in savings over the 5 year demonstration period. Other cost savings don’t explain the decline because the projected cost per member, per month is actually slightly higher for the Medicaid expansion population under the waiver, though it is slightly lower for children and non-expansion adults.

Fewer people enrolled should be expected because the proposal includes a number of measures that will reduce coverage, including denying benefits to people who don’t pay premiums and locking them out for a period of time; also locking out people who miss reenrollment deadlines; and work requirements for maintaining coverage. Ample past research shows such barriers will reduce the number of people who can participate. But the purpose of 1115 Medicaid waivers is to test ways to expand coverage or otherwise improve care, not move backwards on health care access.

The administration suggests coverage reduction will happen because they will move people to private insurance plans. But big claims around that are not realistic, and reflect a lack of understanding of the realities facing low-income Kentuckians and changes in health insurance markets.

Most of those who have gotten coverage because of Medicaid expansion are working now. But a declining share of all workers get insurance through their employers because they either aren’t offered coverage or it isn’t affordable, and stagnant wages at the bottom make it more difficult for many people to afford private insurance. Jobs are lacking in big parts of the state, and other Kentuckians face barriers to better employment including a criminal record, lack of education and training, inability to find to affordable child care and other hurdles that won’t be removed by punitive measures denying care. In fact, reducing the number of people covered will worsen health problems, lowering quality of life, driving health costs back up as people return to the emergency room and making it even harder for some Kentuckians to access work and contribute fully to their communities.

Protecting Medicaid’s Role in Advancing a Healthy Kentucky

To view this report in PDF form, click here.

A new report by the Kentucky Center for Economic Policy provides an in-depth look at Medicaid in Kentucky, the benefits of Medicaid expansion and potential harmful impacts of changes that could create barriers to coverage and care.

The report was prepared in expectation of a proposal from Gov. Bevin to apply for a Medicaid waiver that might involve additional costs to recipients, benefit changes or other provisions.

The report highlights several key facts and points, including:

  • Medicaid is key to the health of Kentuckians for its role in covering many children, working adults, veterans, senior adults and the disabled. With Medicaid expansion, the program’s positive benefits are growing including a significant increase in health screenings, budgetary savings and a recent uptick in job growth in the health care sector.
  • The benefit package offered in Kentucky’s Medicaid program is reasonable and very similar to other states: most all of the services covered in Kentucky are also covered in least 40 other states or territories. And many other states offer important benefits not currently offered in Kentucky.
  • Some waiver ideas put forward by other states have the potential of impeding access to needed care, including premiums, lockout periods and elimination of certain benefits. Certain ideas introduce new administrative expenses that could end up costing the state more than any new revenue or savings generated. Also, there is a long list of state waiver requests the federal government has consistently rejected including: high premiums, benefit-reduction requests, work requirements and partial expansions.

Kentucky is in a unique situation among states because it has already expanded Medicaid while other states used a waiver-based approach in the decision to expand. By law, Kentucky cannot make changes designed simply to save money relative to the current program. Changes must meet the law’s goals of increasing coverage, expanding the provider network, improving health outcomes and/or improving the efficiency and quality of care.

The report concludes with recommendations that include active public participation in the process of developing a proposal, transparency, independent assessment of any changes and a focus on long-term benefits to the health of Kentuckians.

Many Kentucky Workers Have Gained Insurance through the Medicaid Expansion, Are at Risk If Program Is Scaled Back

To view this brief in PDF form, click here.

Many thousands of Kentuckians who work low wage jobs at restaurants, on construction sites, through temp agencies and at retail stores are among those who have gained health insurance because of Kentucky’s decision to expand Medicaid, newly-available Census data show. These workers’ access to care is at risk if Kentucky takes steps backward on the expansion, potentially harming our economy and the health of our state.

More than 73,800 low-wage Kentucky workers whose family incomes make them eligible for Medicaid under the expansion gained health insurance in 2014, according to the data. Workers make up the majority of the 137,220 Medicaid-eligible adults who gained coverage. Because the Census data was collected monthly from January through December 2014, it doesn’t reflect the full extent of coverage gains from Medicaid expansion to date, which total approximately 400,000.

The biggest industries where workers gained health coverage are as follows (see chart for full list):

  • Restaurant and food services, where 14,620 workers gained coverage. Whereas in 2013 (before expansion) 58 percent of that industry’s workers whose family incomes were low enough for Medicaid eligibility after expansion were uninsured, only 25 percent were uninsured in 2014 1.
  • Construction, with 5,920 workers gaining health insurance and an uninsured rate that fell from 63 percent to 32 percent.
  • Temp agencies, with 4,690 workers gaining health insurance and an uninsured rate that fell from 68 percent to 25 percent.

Kentucky led the nation in 2014 in its drop in rate of uninsured 2. While most of the adults gaining insurance are working, they are in jobs that do not offer them affordable coverage. The share of Kentucky workers who receive health insurance through their employer has gradually fallen over the decades from 70 percent in 1980-1982 to only 53.7 percent in 2011-2013 3. Medicaid and access to private insurance with the help of tax credits through Kynect, the state’s marketplace, are helping fill the gaps for workers.

Kentucky ranks near the bottom on many health measures, making our decision to expand Medicaid that much more important 4. Thousands more Kentuckians are getting the preventive care that can keep them healthy and on the job. Many of the workers who have gained coverage are people we encounter on a daily basis at restaurants, grocery stores, nursing homes, child care centers and more. Their ability to go to the doctor when sick also helps the rest of the state stay healthier.

 

  1. Report looks at citizens ages 19 through 64 in families with income at or below 138 percent of the federal poverty line who have worked within the past twelve months. Citizens are the focus because the Medicaid expansion is generally unavailable for non-citizens.
  2. US Census Bureau, “Health Insurance Coverage in the United States: 2014,” September 2015, http://www.census.gov/content/dam/Census/library/publications/2015/demo/p60-253.pdf.
  3. Economic Policy Institute analysis of Current Population Survey March supplement.
  4. Kentucky’s overall health ranks 47th among states in the United Health Foundation’s American’s Health Rankings, http://www.americashealthrankings.org/KY.