by Phillip Bailey
by Ryland Barton
by Deborah Yetter
The next step in the governor’s 1115 Medicaid waiver proposal is for the state to consider public comments, before submitting the final proposal. With the first of the three public hearings being held today, here are some links to information about the state’s Medicaid program and what the waiver plan would mean for Kentucky:
It is important that Kentuckians raise concerns about the health and economic impacts of the waiver proposal before a final version is submitted to the federal Centers for Medicare and Medicaid Services. Here is information about the public hearings:
Public Hearing 1: Tuesday, June 28, 2016, 10 a.m. – noon Central time
Western Kentucky University, Knicely Conference Center Auditorium, 2355 Nashville Road, Bowling Green, KY 42101. You can view this hearing online today: https://connect.wku.edu/medicaidpublichearing/.
Public Hearing 2: Advisory Council for Medical Assistance (MAC) Special Meeting – Wednesday, June 29, 2016, 1 p.m. – 2 p.m. Eastern time
Kentucky Capitol Annex, 702 Capital Avenue, Frankfort, KY 40601
Public Hearing 3: Wednesday, July 6, 2016, 11 a.m. – 1 p.m. Eastern time
Hazard Community and Technical College Campus, Room 208, Jolly Classroom Center, 1 Community College Drive, Hazard, KY 41701
by Deborah Yetter
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.
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.
by Eric Pianin
by Chris Kenning
The proposed changes to Kentucky’s Medicaid expansion include the elimination of dental coverage from the package of benefits for adults. Reducing access to dental care would likely lead to other, more serious health problems and cost the state more in overall Medicaid spending through greater use of emergency room services.
Dental care makes up a small portion of the overall budget, but is a very efficient preventative medical service that is critical in Kentucky given our poor oral health.
What does Medicaid currently cover?
Medicaid has long covered extensive dental services for children under 21. While eligible adults’ coverage is more limited, it includes routine services like exams, fillings, x-rays and extractions. As of late 2015, Medicaid dental visits had risen 31 percent in Kentucky thanks largely to Medicaid expansion. Currently, 29 states offer dental benefits beyond emergency services.
Kentucky’s dental health
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:
- 48 percent of Kentuckians at or below 138 of the Federal Poverty Level (or those eligible for Medicaid under the expansion) have seen a dentist in the past year versus 81 percent for those at or above 200 percent of the Federal Poverty Level.
- Only 43 percent of uninsured Kentuckians saw a dentist during that time, versus 70 percent of those who were insured.
- On the whole, 64 percent of Kentuckians went to a dentist in the past year.
- According to a Gallup poll in 2014, Kentucky ranked 43rd in the nation for adults who said they had visited a dentist in the past year.
Kentucky’s oral health reflects these low levels of dental care. A study by the Center for Health Workforce Studies shows:
- 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
A poll conducted by the American Dental Association looked at oral health status, attitudes, and utilization in all 50 states. In Kentucky, nearly every category of health and access were worse for people with low-incomes (at or below 138 percent of the federal poverty level) than for middle or high income Kentuckians:
- Low income Kentuckians were more likely to report that life was less satisfying because of a dental condition.
- 28 percent of low income Kentuckians 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.
- Low income Kentuckians 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.
- Low income Kentuckians were more likely to go without visiting a dentist over the course of a year because of cost, or because the dentist is in an inconvenient location.
Oral health has an impact on overall health
Although poor dental health can be debilitating on its own, there are several ways in which oral health has an impact on overall well being. 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 can also lead to early detection of other diseases that display symptoms in the mouth, enabling less costly diagnosis and treatment.
Trips to the emergency room (ER) for dental-related conditions (which are covered by Medicaid) are expensive and often preventable through routine trips to the dentist. Dental-related ER care is at least 3 times as expensive as a dental visit – $749 for non-hospitalized care. Nationally, these kinds of visits are becoming more frequent. 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. Medicaid is the primary payer for 35 percent of all dental-related ER visits, which amounted to $540 million in 2012, but it only makes up 28.1 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 emergency room visits.
The only subset of the population that saw a national decline in dental-related ER usage was young adults aged 19-25. A provision of the Affordable Care Act allows young adults up to 26 to remain on their parents’ insurance policy, which one study found resulted in an increase in young adults going to the dentist. The authors cite the removal of cost barriers as a reason for the uptick in dental visits. The 2013 Kentucky Health Issues Poll showed this trend is true for Kentucky as well, with young adults aged 18-24 being the adult age bracket most likely to have visited a dentist in the last year (69.3 percent).
Dental care costs are a small portion of Medicaid spending
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. 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.
Kentucky’s utilization and reimbursement rates are generally lower than the national average for dental care, but if it followed the national trend, Kentucky spent just over $54 million out of the $1.5 billion in General Fund dollars on dental care through Medicaid in 2014.
In fact, Kentucky already skimps on payments to dental providers to keep costs down. Medicaid reimbursement rates paid to providers are set at the state level, and dental care reimbursement rates in Kentucky are just over 40 percent of what private insurers pay. This low payment contributes to the fact that only 24 percent of dentists accept Medicaid patients in Kentucky. Nationally, 77 percent of Federally Qualified Health Centers (FQHCs) – medical safety net clinics – provided dental care in 2013, but only 52 percent of FQHCs in Kentucky offered any such services, most of which are concentrated in southern and eastern Kentucky. Dentists are already thin across the state – 51.9 per 100,000 people, as opposed to the national average of 59.2.
Kentucky is healthier with dental care
Cutting dental benefits will lead to a less healthy population, costing Kentucky more in the long term. Conditions easily prevented by regular cleanings and screenings often lead to costly trips to the emergency department and debilitating pain. Kentucky already ranks low nationally on its oral health, and many low-income Kentuckians have difficulty getting to a dentist because so many don’t accept Medicaid. Dental care should not be seen as an extra bonus but as an essential element of overall health.
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).
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.