KY Policy Blog

What’s In the Governor’s Proposed Medicaid Changes

By Jason Bailey
June 22, 2016

Governor Bevin rolled out proposed changes to Kentucky’s Medicaid program that would put up harsh new barriers to coverage and care for Kentuckians including premiums and work requirements. The plan also reduces benefits and creates complex new administrative systems to track and collect payments and activities.

The proposal, called a Section 1115 waiver to the Medicaid program, is subject to public comments in Kentucky before going to the Department of Health and Human Services (HHS) for their consideration and response. Aspects of the proposal put Kentucky’s nation-leading health gains at risk and threaten progress in getting people the preventive care needed to improve health.

Major components of the plan include the following:

Work Requirements for Participation

The plan includes a requirement that non-disabled adults without children engage in certain work and/or community requirements beginning after three months in the program. These activities start at 5 hours a week and ramp up to 20 hours a week after 1 year. Failure to do so results in suspension of benefits.

Such requirements have been consistently rejected by HHS in waiver proposals, and rigorous evaluations show attaching similar requirements to safety net programs doesn’t work to reduce poverty.

Premiums with Penalties for Failure to Pay

Members will have to pay $1 to $15 in premiums a month based on income. After a year in the program, premiums continue climbing for those with incomes above the poverty line, up to $37.50 a month. Co-pays from the current program are eliminated for those paying premiums, though those co-pays are often not collected currently.

Premiums must be paid within 60 days of eligibility. Those above the poverty line who do not pay are locked out of the plan for six months; they can re-enroll before that time if they pay back premiums owed and take a financial or health literacy course. For those below the poverty line, members not paying premiums keep benefits but must begin contributing co-pays and will lose access to their MyRewards account mentioned below.

Premiums have been attempted in past Medicaid experiments, and strong evidence suggests they significantly reduce the number of people covered.

Elimination of Certain Benefits

Dental coverage would no longer be part of the regular Medicaid benefits package despite Kentucky’s poor oral health, and neither would vision coverage (see more below). Also eliminated is help with transportation for non-emergency medical visits.

Elimination of Retroactive Coverage and a Lockout for Those Who Miss Signing Back Up

Currently, Medicaid provides retroactive coverage to new members for up to three months prior to enrollment. However, the proposal would make coverage start on the first day of the month payment is received (a pre-payment can be made to begin coverage for those not yet determined eligible). Because some people may not seek coverage until they have a serious health problem, this could mean facing unpayable health care bills.

If a member does not re-enroll for coverage before the expiration of each 12-month period, he or she loses coverage. The member then will have three months to re-enroll and if they do not must wait an additional six months to reenroll unless they take a financial or health literacy course. According to the Center on Budget and Policy Priorities, that’s something “no state has proposed doing.”

Two Kinds of Health Savings Accounts for Each Member

Medicaid members would have a $1,000 deductible each year, though the plan contributes $1,000 to each member in a health savings account to make the payment. Half of the unused deductible each year will go into a second health savings account, called MyRewards. The MyRewards account is also set up to receive funds for certain health, community and job training activities. The monies in that account can be used for benefits not covered including dental, vision and over-the-counter medications. Monies are taken out of the account as a penalty for non-emergency use of the emergency room.

Attempts to Link Medicaid to Private Employer-Based Insurance

The waiver proposal attempts to link Medicaid to employer-provided insurance for those employers that offer coverage to workers who are Medicaid recipients. Members with access to these plans are encouraged — and ultimately required — to enroll in the employer-sponsored plans, and are given monies for the premiums (minus the Medicaid premium payment above). Medicaid pays for benefits the employer does not provide. According to a recent study of similar ideas, there are challenges with such programs and “more research is needed” to know how to administer them.

Changes to the Medicaid program proposed through an 1115 waiver must be approved by HHS. By law, any changes must improve coverage, access to providers, health outcomes or the efficiency and quality of care. A number of elements in the proposal are at odds with those goals and threaten to move Kentucky backward in our important recent health care gains.

Public hearings in Kentucky will begin next week and written and emailed comments will be collected until July 22, more info here.

 

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6 Responses to “What’s In the Governor’s Proposed Medicaid Changes”

  1. Arnold Weiner says:

    On Medicare and with a fully paid secondary medical insurance from the employer from whom I retired, I will never need Kentucky’s Medicaid program. That being said, I support FULL coverage for those who need it and do not complain about my Kentucky taxes going to fund it. These changes are horrible for families who need medical, dental and/or vision care. Our state and federal representatives need to be supporting a national FREE (paid by taxes) health care system. Expand the program to insure proper health coverage for all. Did you not read that Kentucky residents rank near the bottom in good health standards. I do not like or support the Governor’s suggested program.

  2. Amy Marlatt says:

    This is the wrong direction our state should be going. It doesn’t work. We have a right to affordable health.

  3. Leslie S says:

    I work full time for a company that offers great dental and vision, but horrible health insurance. The deductible for medical where I work at is $3500, and costs you $27 every two weeks for one person. I only go to the doctor four times a year and that is to get my whole one prescription which is my blood pressure pills. If it wasn’t for the Medicaid program, I wouldn’t be able to go to the doctor because I couldn’t afford it. That’s how tight my budget is. My mother just returned to work after having to stay at home to care for my father for a few years since we could not afford to hire a nurse, and his insurance wouldn’t cover it. She has a medical card because she cannot afford insurance for her and my younger sister on the meager income she makes in fast food. Without her medical card, she couldn’t afford to get the care she needs to stay alive as she also has high blood pressure, sleep apnea, circulatory problems, and type 2 diabetes, among a few other minor health issues. There’s not alot of options in our area for work, so finding another job is out of the question. To give you an idea of how small my town is, we have to travel about 45 minutes drive time just to get to a Walmart…

    I’m all for requiring co-pays for those that can afford it. Just as I know that there are some people out there that do abuse the system. However, there are also many others out there that struggle to make ends meet and can barely afford to keep food on their table as is. How are they going to afford these changes? They won’t be able to. Then when they lose their coverage, they’re going to have to pay a fine out of whatever meager tax return they get, which in cases like mine, that’s how we afford to get school clothes for the kids, or birthday presents, or even just get the car fixed up enough to keep it running because we damn sure can’t afford a new one.

    I really wish these politicians would spend a couple weeks in our shoes before proposing to make changes that in the end are only going to make things worse….

  4. K Whitlock says:

    Many people who became eligible for Medicaid expansion were not eligible for the Medicaid program before the affordable care act. Most are working people that will get punished for not being available to do volunteer work? Ridiculous. I’m reading this as volunteer work will be required in order to retain Medicaid coverage. How can people work their jobs and take time off without pay to be a volunteer? Makes zero sense. I kinda think the governor sees people on Medicaid expansion as lazy and non productive when in fact it’s just that the jobs that pay well and offer medical insurance are far and few between. I think the governor failed to understand that most adults on the expansion are the working class citizens of Kentucky. And what good can come from taking away dental and vision care? And making people have to ‘earn’ it back? As if born without perfect vision and perfect dental wasn’t difficult enough now people have to ‘earn’ the coverage back? Ridiculous. Paying a premium as suggested isn’t going to be a problem for many people but there definitely will be people that will have to choose premiums or groceries especially once the higher rate takes affect. Governor isn’t it punishment enough to be poor and working as hard as we can without taking away Medicaid expansion? I don’t understand your logic. How is denying people the basic right to medical care and treatment good for Kentucky? By the way we do pay taxes too.

  5. Martha Nest says:

    This is a flawed plan from the beginning. You are requiring a non-disabled adult without children to work. Are you requiring non-disabled adults with children to work? That is the first flaw – it is discriminatory. Also if a person is working 20 hours per week in Kentucky at $7.25 per hour, they are making $145 per week and if they work full time, they are making $290 per week – where are they going to get the money to pay for the insurance? This plan is an administrative nightmare that cannot be implemented without tremendous costs that could be used to provide insurance for our citizens. Since when are dental and vision care not health related? It appears that Governor Bevin is banking on realizing costs savings by creating a program that is designed to make sure the recipient will be without health insurance after the first year by not following one of the rules. Then he can say that they don’t deserve health care. Kentucky should be a leader in health care reform, not engaging in discriminatory practices that widens the gap between the “haves” and the Have-nots”. Where is our sense of decency and pride in taking care of our most vulnerable citizens. If Governor Bevin was really intent on saving the Commonwealth money, he would work without pay and move to Frankfort and govern and not “work at home”. I would support a tax increase to pay for expanded Medicaid to give all of our citizens access to basic health care.

  6. cindy mayfield says:

    We learned today that my sister-in-law’s Medicaid coverage has been reduced so drastically that she will have to move into a nursing home, instead of continuing to receive the at home health aide assistance that she’s received for the past 5 yrs. She is completely immobile with MS (quadriplegic), and progressively gets worse, but would be more healthy and attended to more properly with the in home care she currently receives at my mother-in-law’s home. We are devastated to find this out. We have not told her that she is headed to the nursing home. She is near the end of her life and this will make her last days full of fear and sadness. I can’t believe that our state would treat it’s fully disabled residents like this.