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.