The Trump administration has approved an overhaul of Medicaid in Kentucky that for the first time will require some low-income people to work to keep their health coverage, just one day after issuing guidance making it easier for states to seek work requirements.
The administration’s approval represents a seismic philosophical shift for Medicaid, which was created more than 50 years ago to cover the poor. The Kentucky proposal developed by Republican Gov. Matt Bevin will force some poor adults to work approximately 20 hours per week to retain their benefits.
At the same time, the Trump administration greenlighted a host of other conservative policies, including new mandated payments from enrollees and coverage lockouts, which will significantly roll back coverage protections in Kentucky’s Medicaid program. Those changes will result in about 95,000 enrollees being forced off the program, Kentucky estimates.
“Kentucky is leading the nation in this reform," Bevin said at press conference Friday. “It will soon become the standard and the norm in the United States of America, and America will be better for it.”
Conservatives see work requirements as a major victory, while progressive groups have vowed lawsuits to block them from taking effect. As Medicaid expanded to cover millions of low-income adults under Obamacare, Republicans have sought greater restrictions to curb swelling enrollment. That includes tying certain enrollees’ benefits to employment or other job-related activities, including job training or volunteer work.
“There’s countless studies out there that show the link of having a job and positive health outcomes," Centers for Medicare and Medicaid Services Administrator Seema Verma said Thursday.
Kentucky is one of nearly a dozen mostly GOP-led states trying to institute new Medicaid restrictions that would primarily affect working-age, low-income adults without young children. Under the Kentucky plan, there are several exemptions to the work rules for people with disabilities, children, pregnant women, the elderly and individuals with debilitating illness.
Arkansas, Indiana, Maine, Utah and Wisconsin are among other red states awaiting federal approval for similar rules.
But Kentucky — which had one of the most successful Obamacare implementations under Bevin’s Democratic predecessor Steve Beshear — has received national attention as a test case for the types of conservative changes the Trump administration would allow.
Kentucky on Friday was also approved to make other far-reaching changes to Medicaid that other states have eyed. CMS will let Kentucky charge monthly premiums for adults in the expanded Medicaid program and some parents. State officials said premiums will range from $1 to $15 per month, and failure to pay could result in co-pays ranging from $3 to $50.
The state was also approved to waive a long-standing Medicaid policy that allowed new enrollees to get coverage for medical bills dating back three months. Coverage for parents and childless adults will no longer start until they pay their first premium.
Kentucky Medicaid enrollees booted from coverage for not complying with employment rules can be reinstated if they work or participate in a related activity for 80 hours over a month, or if they complete a health or financial literacy course.
Democrats have argued that work requirements undermine the very nature of Medicaid as a health care entitlement for low-income Americans, and protest the Trump administration’s argument that working improves health.
The Medicaid statute doesn’t allow states to condition health benefits on employment, so states are seeking work requirements through federal waivers that allow demonstration programs if they further Medicaid’s objectives. CMS and these states say there are health benefits associated with working, which advances Medicaid’s goal of improving enrollees’ health. But critics of the idea say forcing unemployed, low-income people off insurance won’t make them healthier.
“Their contorted effort is to say is, you know what, people who are working are healthier," said Leonardo Cuello of the National Health Law Program, an advocacy group weighing litigation to block the new requirements. "It’s not that work is making people healthy. It’s that you provide health care to people and they’re able to work.”
Verma said she recused herself from the Kentucky decision because she helped draw up the plan as a consultant before Trump nominated her to head CMS. But the decision by her agency was no surprise. Verma and other top Trump officials have praised work requirements, which they often refer to as “community engagement.”
They have also expressed support for other conservative Medicaid policies, such as requiring able-bodied adults to pay more toward their coverage. Conservatives contend that compelling enrollees to contribute more will make them more responsible for their health care, but critics point to research that finds forcing low-income families to make even small payments often depresses enrollment.
Verma has lamented that the Obamacare expansion, which began in 2014, was a costly detour away from Medicaid’s core mission of covering the most vulnerable populations, including pregnant women and people with disabilities. Medicaid now covers roughly one in five Americans.
Kentucky, which first filed its waiver request with the Obama administration more than a year ago, is one of 17 states with GOP governors that expanded Medicaid coverage under Obamacare. Bevin, who was elected in 2015, has been highly critical of the health law, although he did not go as far in dismantling it as he had vowed during his campaign.
Roughly 480,000 low-income residents signed up for expanded Medicaid, representing the bulk of the state’s coverage gains tied to Obamacare. Kentucky’s uninsured rate plummeted more than any other state in the country.
Bevin has argued that the Medicaid changes, which will begin taking effect this year, are necessary to put the program on a financially sustainable path. Starting in July, the work rules will be gradually phased in across the state.
The Bevin administration expects that the work requirement and other changes will reduce Medicaid enrollment by 95,000 over a five-year period. About 1.4 million people are currently covered through the state’s program.
More than 11 million people signed up for Medicaid expansion in states that joined the program. Nineteen states, nearly all of them with Republican governors, refuse to expand.