FRANKFORT The Secretary of the Kentucky Cabinet for Health and Family services told lawmakers Wednesday that Gov. Matt Bevin might halt expanded Medicaid coverage in Kentucky if a federal court orders changes to the program delayed.
Adam Meier told the Interim Joint Committee on Health and Welfare the state’s Medicaid program faces a shortfall in the Medicaid program which provides health coverage to the elderly, disabled and poor, including those single adults covered by the Medicaid expansion provision of the Affordable Care Act.
In all, Kentucky’s Medicaid program covers about 1.4 million people and the $11 billion program takes up an increasing portion of the state budget.
Bevin received approval from the Centers for Medicare and Medicaid Services (CMS) after President Donald Trump’s election to alter the expanded portion of the program to require able-bodied adults to participate in “community engagement” activities such as 80 hours of work per month, volunteering or education advancement.
The waiver also will allow Kentucky to charge premiums or co-pays for those in the expanded coverage population. A goal of the waiver is to encourage clients to find jobs and transition to commercial health insurance coverage and it is estimated the waiver will reduce Medicaid rolls by about 100,000 over five years.
But health advocates challenged the waiver in federal court, and the judge in the case is expected to issue a ruling by July 1.
There has been debate about whether the waiver will save Kentucky money—Bevin originally estimated it would save more than $250 million for Kentucky but subsequently he’s defended the move on helping clients become more productive and less dependent on government services than on the cost savings. (Since the federal government pays most of the cost—90 percent of expended population costs – its savings would be much larger.)
Some outside groups like the Kentucky Center for Economic Policy contend the move will actually cost Kentucky more in administrative costs than it will see in direct savings.
Bevin has previously said without the waiver, Kentucky cannot afford to continue offering the expanded coverage and he signed an executive order earlier this year indicating he would end the program if the federal court challenge succeeded.
Meier couldn’t give lawmakers a precise estimate of savings on Wednesday, but he said the state expects to save as much as $340 million over time.
If the courts invalidate the waiver or even delay its implementation, Meier said Kentucky will have to find savings.
That could include reducing coverage for things like vision, dental or pharmacy costs —or even the elimination of the expanded population coverage for those making up to 138 percent of the federal poverty level.
Even if the wavier stands, dental and vision coverage are no longer guaranteed under its guidelines. Medicaid enrollees could earn “My Rewards” points for such things as preventive health screenings, job training or earning a GED and then apply those toward dental and vision needs.
That part of the waiver was begun in January and Deputy Secretary Kristi Putnum told the committee that eligible clients have already banked about $7.8 million in the rewards program.
The other new requirements of the program are scheduled to begin on July 1 in Campbell County and gradually be introduced in other counties throughout the year.