Four New Ways Kentuckians Could Lose Medicaid
August 30, 2017
Low-income and disabled Kentuckians are currently eligible for a broad range of health care benefits thanks to Medicaid. As long as people earn below a certain annual wage ($16,670 for adult individuals), or have certain disability-related needs, they qualify. But Kentucky’s recent request to the federal government to make changes to our Medicaid program (known as an 1115 waiver) would add four new ways for people to lose coverage. The documentation attached to the waiver request estimates these new barriers will be a main driver behind 96,687 fewer people being covered by Medicaid.
1. Work Requirements are Ineffective and Unprecedented
The waiver includes a mandatory 20-hour “community engagement” requirement – which is essentially a work requirement. If non-disabled adults who are covered through the expansion and are not primary caregivers don’t volunteer or work 20 hours per week, they can be locked out of Medicaid for 6 months.
Such a requirement is at odds with the goal of the Medicaid program, which is to provide health coverage for those who cannot afford it. A work requirement will result in fewer people covered by Medicaid and has not been shown to be an effective tool for promoting long-term employment or reducing poverty. Evidence from the work requirements in TANF (cash assistance for low-income families) and SNAP (formerly known as food stamps) show that people don’t end up in well-paying, long term jobs or are lifted out of poverty because of their participation in a work requirement.
Although a work requirement has never been approved for any state’s Medicaid program, some states have started to ask for one. For example, a similar request to implement a work requirement in Indiana estimated roughly 30 percent of Medicaid enrollees would be subject to that requirement, and of those, a quarter would lose coverage because they wouldn’t meet the weekly hours required.
2. Premiums are a Barrier to Coverage for Those Already Struggling to Make Ends Meet
Under this same waiver request, Kentucky’s Medicaid program would require people who earn above the poverty line ($12,080 for an individual) to pay premiums that increase over time, topping out at $37.50 per month, or else lose coverage. People who earn below the poverty line also must pay either premiums that increase in tiers tied to income levels, or co-pays, which can be an impediment to getting needed care and become very expensive for people with health conditions. Only people deemed “medically frail,” children and pregnant women would not be subject to premiums.
Oregon, Utah, Washington and Wisconsin have tried charging premiums for Medicaid enrollees in the past. In each of these states, premiums resulted in enrollment decreases due to being an added barrier to coverage that people barely making ends meet could not manage. In Oregon, enrollment dropped by almost half when they began charging premiums for Medicaid.
Using Indiana’s mandatory monthly contribution outcomes as a proxy, we could expect over half of Medicaid enrollees in Kentucky to miss a payment, with some being locked out of coverage for six months and others being forced to make expensive co-pays every time they go to see a doctor. In Indiana, tens of thousands either lost coverage or were never covered because they missed a payment.
3. Reporting Requirement Penalty is Extreme Given the Nature of Many Low-Wage Jobs
Another way Medicaid enrollees could lose coverage for 6 months is if they fail to report relevant changes in income or work hours within a 10-day window. This mandate means any changes to hours or income that relate to the work requirement or premium tiers must be reported quickly and often.
This provision is especially problematic for Medicaid enrollees due to the kinds of jobs they have. Most Medicaid expansion-eligible adults work, but work in jobs with notoriously variable hours and inconsistent incomes like in restaurants, construction and retail. For example, “just-in-time scheduling” that can result in people being called into work the day-of or sent home after reporting for a shift, tip-dependent server jobs and weather-dependent construction work are all examples of low wage work that varies from week to week. Penalizing someone’s failure to report those changes with a six-month disenrollment is both unduly harsh and in no way reflects the kinds of health coverage others receive.
4. Annual Re-determination is Unnecessary and Disconnected from Other Types of Coverage
With the exception of pregnant women, children and the “medically frail” enrollees will have to fill out redetermination paperwork each year within a three-month window, starting nine months after their coverage begins. If an enrollee misses that window they lose coverage and have to wait nine months before they can start receiving benefits again.
Currently, as long as an enrollee’s circumstances have not changed they are re-enrolled automatically, like most anyone who gets insurance through work or who decides to keep an policy they purchased directly from an insurance company. This requirement adds a new, unnecessary hurdle for people to keep Medicaid coverage once they have it.
There are ways Medicaid enrollees can re-enroll prior to the end of their six-month lock out period if they lost coverage due to a work requirement, premium or reporting requirement violation. But nearly 100,000 Kentuckians will still lose coverage, in large part due to these new barriers. Medicaid waivers are meant to demonstrate innovation in providing health coverage for more low-income people, creating efficiencies in the delivery of care, strengthening the relationship between the state and health care providers and improving health. Building new ways for people to lose coverage falls far short of these goals.