Kentucky Submits Proposed Medicaid Waiver

A couple months ago, Kentucky released the first version of its proposed Medicaid waiver for public comment and we pointed out several major problems with the proposal. Basically, the proposal contained elements like very high premiums and very high copayments, lockout periods where people would be denied health coverage and work (or involuntary “volunteer”) requirements: All of these are unlikely to be approved by the federal government. Today Kentucky submitted the same proposal for federal review with very few substantive changes.

All Medicaid waivers are the product of a long back and forth negotiation with the federal government however, so elements like the above don’t necessarily mean a compromise version of Kentucky’s waiver couldn’t eventually be approved. Kentucky’s proposal certainly contains ideas that would be very likely to meet state and federal agreement such as innovation around substance abuse treatment and more use of care coordination.

Unfortunately, Kentucky precludes this sort of compromise with this sentence on the first page of the waiver proposal submitted to the federal government today:

The Kentucky HEALTH program, as outlined below, represents the terms under which the Commonwealth will continue Medicaid expansion.

So, basically the state – led by Kentucky’s Governor Matt Bevin – is saying to the federal government “Give us everything we want in this waiver or we will take the 400,000 largely uninsured people we covered under our Medicaid expansion and remove them from their health plans.”

This sort of ultimatum is unusual in health care politics. Usually, when cuts are proposed, the politicians proposing them are quick to try and make the case that people won’t really be hurt by these cuts, or can get care elsewhere, or will have some new health plan or service available that will be even better than the current system. Therefore, “Repeal and replace” is the byline, not “Repeal and go back to millions of people not getting health care anywhere.” Kentucky, at least at this point, is taking a different road.

And Kentucky’s Medicaid expansion is working really well which makes this sort of way of doing business especially troubling. A recent study from Harvard found that Kentucky’s lower income folks were doing far better on 26 measures of access, quality and yes, health, than people in Texas, which hasn’t expanded Medicaid. This is in line with a rapidly growing body of research on the positive effects of state Medicaid expansions across the country.

So why mess with something that is doing so well and even threaten to take it away? Obviously there are some health care politics here that keep a successful program perpetually on the chopping block. However, I do think there is a misapprehension too that is woven through Kentucky’s waiver proposal: That there are simply many jobs available to lower income workers that cover health benefits at an affordable price. This is simply not the case and was a real problem before Medicaid expansion became an option for states (and continues to be a problem in states that have not expanded Medicaid). Workers in construction, food services, hospitality, small businesses like car repair and similar jobs simply do not have health plans available through their employer. Even when plans are available they may be stitching hours together from several part-time jobs and trying to finish up school or get new training and so don’t qualify. These people are working, living in poverty, but with nowhere to go to get health coverage. For them Medicaid expansion has been wildly successful in Kentucky. That we are at a point where a waiver request to the federal government can threaten to take away their coverage is unfortunate.

Adam Searing
Adam Searing is an Associate Professor of the Practice at the Center for Children and Families