By Sean Miskell and Adam Searing
Kentucky has released a new Medicaid waiver request for state public comment today. This proposal would allow the state to make significant changes to its existing Medicaid program, affecting not only those newly eligible beneficiaries currently receiving health care through Kentucky’s existing Medicaid expansion, but also others served by the program, including pregnant women and children. Many of the proposed changes go beyond what the federal government has approved in previous Medicaid expansion waivers. Thus, although Governor Bevin presented the proposal as needing to be approved by the federal government as written or the state would end its Medicaid expansion program for over 400,000 current enrollees, this request merely starts the process of negotiation between the state and federal government.
If it’s not broken…
Kentucky’s request to make changes to its Medicaid expansion program is all the more puzzling because it is so successful as is. A state report found that Medicaid expansion is saving tens of millions of dollars every year since it started in 2014 while insuring hundreds of thousands of people. Nevertheless, Kentucky’s new Governor would like to make some major Medicaid changes.
There are some interesting ideas proposed in this waiver – like the attempt to innovate on mental health treatment – but many of the proposals seem more likely to make current beneficiaries worse off. This is a crucial point that makes Kentucky distinct from many of the other expansion waivers approved in states like Arkansas and Indiana. Because Kentucky has already expanded Medicaid, the waiver’s proposed changes would directly affect hundreds of thousands that are currently receiving coverage and accessing health care.
Questions to consider during the public comment period
We will have more analysis soon, and will certainly submit comments at the federal level once the proposed waiver reaches that stage. In the meantime, our initial reading of Kentucky’s request raises several questions:
- Why are pregnant women and children under age 19 included in this waiver request?
Kentucky says that including these groups who have been either getting Medicaid or CHIP are included to “streamline” coverage:
Single family coverage not only streamlines eligibility processes for the family and the State, it also reduces network and provider fragmentation between adults and children, thus improving access to care. Although children will be included in this Section 1115 demonstration, all children participating in Kentucky HEALTH will maintain their current benefit packages and will be exempt from all Kentucky HEALTH cost-sharing and plan structure changes.
If children and pregnant women don’t have their benefits, cost sharing requirements or plan structure changed by the waiver, it is unclear why they should be included in this request. If these groups are to continue their care as they have in the past then including them under this waiver seems only to make their coverage more confusing — not less.
- What will the complex nature of this request mean for enrollment?
A central feature of Kentucky’s request is that it places a number of hurdles between beneficiaries and their health coverage, including:
- Premiums: Premiums rise up to $8 per month for people under 100 percent of the federal poverty level (FPL). Just above the poverty level premiums can increase after several years to $37.50 a month– a significant sum for someone making around $12,000 a year. At such low-income levels we know from extensive research that people are so poor they routinely forgo paying premiums for health coverage to pay for other needs. Small cost sharing payments are already allowed under the Medicaid program and this would be a significant increase. Other states proposing similar premiums have had these proposals rejected – especially regarding premiums for those under the poverty level.
- Work or “community engagement” requirements: Kentucky proposes to require “all able-bodied working age adult Kentucky Health members without dependent children” to “participate in community engagement and employment activities to maintain enrollment.” The federal government has been clear that it will not approve waiver changes that condition eligibility for health care coverage on work or work training programs. This seems like requirements other states have failed to get federal agreement on with the addition that people could satisfy this 20 hour a week requirement (the hours required go up after every 3 months of eligibility to a maximum of 20 hours after 12 months) through some sort of unspecified volunteer services. Even with this addition, this requirement seems very much like provisions on work that other states have had rejected. Other states have managed to encourage participation in work, vocational and job training programs however – just not been able to use them as a requirement for eligibility.
- Lock out period for failure to pay premiums: People above 100% poverty level will be locked out of health coverage for six months for failure to pay premiums. Those under the poverty line cannot be locked out but will pay higher copayments. And regardless of income level, enrollees who fail to complete the states “annual redetermination process” will be locked out of coverage for six months. Additionally, failure to pay premiums after signing up for coverage with an income below the poverty line means a two-month (60 day) wait period for coverage. Generally, preventing people from getting health coverage, especially at such low incomes is harmful to patients and increases costs for caring for uninsured patients in hospitals and health clinics. After all, uninsured people still continue to try and obtain care, but have more difficulty getting seen and care is often delivered not by primary care physicians but in hospital emergency rooms. Lock out periods such as these have been rejected by the federal government.
- How will the proposed wrap-around benefits be administered?
The proposal includes a premium assistance program intended to promote employment and enrollment in employer sponsored health coverage. The premium assistance program would subsidize the enrollee’s employer plan and provide wrap-around benefits for services covered by Medicaid but not the employer’s health plan. But in a study of pre-Affordable Care Act premium assistance programs with co-authors at the Kaiser Commission on Medicaid and the Uninsured, Joan Alker and Sean Miskell found that data reporting for these programs was inconsistent as were the written materials explaining how beneficiaries can access wrap-around benefits. The study found that more research is needed to understand how best to administer wrap-around programs as states consider expanding premium assistance programs to greater numbers of beneficiaries as Kentucky is currently doing.
With a currently successful Medicaid expansion program that is popular in the state, Kentucky will no doubt face questions about these provisions and others in the coming weeks. We’ll be following what is happening in the state with interest.