Controversial parts of Medicaid plan remain

FRANKFORT, Ky. — Gov. Matt Bevin’s administration unveiled its long-awaited plan to reshape the state’s Medicaid program Wednesday, two months after Bevin announced a sweeping overhaul of the federal-state health plan for low-income and disabled Kentuckians.

Taking aim at the Medicaid expansion launched by his predecessor, Democrat Steve Beshear, under the federal Affordable Care Act, Bevin, a Republican, has said he wants to create a different program that includes more cost-sharing by consumers and encourages more personal responsibility for health choices.

“The submission of this waiver is the result of many months of extensive research, planning and time spent traveling the state,” Bevin said in a news release. The revised waiver, he said, “will allow us to continue to provide expanded Medicaid coverage, but unlike the current Medicaid expansion under Obamacare, it will do so in a fiscally responsible manner.”

The revised proposal tweaks the plan Bevin described in June, one that was soundly denounced by advocates for expanded access to health care. Some of those critics said Wednesday that Bevin’s new plan largely remains the same.

“It’s basically the same plan with only really small changes,” said Jason Bailey, executive director of the Kentucky Center for Economic Policy. “It still includes the very problematic measures that would reduce the number of Kentuckians who have health coverage.”

Emily Beauregard, executive director of Kentucky Voices for Health, said she was glad to see some proposed benefit reductions scaled back, but that the governor’s basic approach remains the same and she is worried that the U.S. Department of Health and Human Services will reject the waiver application. “If that’s the case, we’re wondering what Gov. Bevin will do – whether he’ll walk away from Medicaid expansion entirely or whether he’ll be willing to negotiate.”

But Republican state senators who oversee the Senate Health and Welfare Committee –  Julie Raque Adams, of Louisville, and Ralph Alvarado, of Winchester, described the waiver as a badly needed “common sense” approach to keep Kentuckians covered while controlling the spiraling costs of Medicaid to the state budget.

“The current Medicaid model in Kentucky is broken. If we continue down this unsustainable path, many Kentuckians will lose their healthcare coverage and we will have less state dollars to fund education and fix pension systems,” the senators said in a joint statement.

The revised waiver retains a provision to make dental and vision coverage optional benefits that people could purchase by accumulating rewards points in a separate account. But in Wednesday’s announcement, the Bevin administration noted that any changes to the dental and vision benefit will be delayed by three months to allow members additional time to accrue funds in the new rewards accounts.

Health advocates wanted the dental and vision benefits fully restored in the final waiver, citing Kentucky’s high rates of dental disease and health problems such as high blood pressure and glaucoma often detected through routine eye exams.

And the revised waiver retains a controversial requirement that people on Medicaid work or volunteer up to 20 hours a week.

Bevin’s deputy chief of staff, Adam Meier, recently told a legislative panel the administration would work to help add jobs or find volunteer work — especially in rural communities with few such options. That might include helping in soup kitchens or “picking up trash,” he told members of the Medicaid Oversight and Advisory Committee.

Critics had argued that many low-income people enrolled in Medicaid already work in low-wage jobs with no health coverage and that documenting and verifying work hours would add needless complexity and bureaucracy to the plan.

More recently, the volunteer proposal drew objections from the Kentucky Non-Profit Network after Meier met with its members to discuss volunteer options.

In an Aug. 14 letter, the group cited objections from its members including the need for additional staff to train and supervise volunteers, record-keeping and documentation likely needed to verify such volunteer work and the concern that “in our experience, coerced volunteers don’t result in a good volunteer program.”

Bevin’s proposal retains requirements that people pay monthly premiums for coverage for services that are now largely free, a provision Bevin has said would ensure more personal responsibility among Kentuckians and lead them to make better health care choices. It still allows for “lockouts” of  coverage some people who fail to pay premiums of $1 to $37.50 per month.

Besides the delay in implementing changes to the dental and vision benefits, here are other significant changes to the new waiver, according to Wednesday’s news release from the Kentucky Cabinet for Health and Family Services:

» Allergy testing and private duty nursing will continue to be covered services.

» Individuals determined to be “medically frail” will be exempt from required premiums and co-payments

» GED testing costs will be added as an additional covered benefit.

» The list of activities resulting in contributions to the My Rewards Account will be expanded to include caretaking responsibilities, passing the GED and ensuring children receive recommended preventative services like immunizations.

» Sliding scale premiums will be collected on a household basis — not an individual basis.

The press release also said some policies within the original waiver application will be clarified to address misconceptions in public comments. For instance, the news release said benefits will not change for children, pregnant women, medically frail and adults eligible for Medicaid before expansion.

And Bevin’s battle to restructure the program faces a significant hurdle. It now goes the federal government, which provides most of the money for Kentucky’s Medicaid program and must approve Bevin’s applications for a “waiver” to operate outside federal rules.

The changes are aimed largely at 440,000 people added to Kentucky’s Medicaid program through the expansion, which allows coverage for anyone earning 138 percent or less of the federal poverty level, about $16,200 for an individual.

Officials with the Bevin administration have said the new rules would apply mainly to “able-bodied adults” within the Medicaid population and would not affect  disabled individuals or those deemed “medically frail.”

Beshear had authorized the Medicaid expansion that began in 2014, saying it would dramatically reduce the rate of people with no health coverage in Kentucky and improve access to care in a state with some of the worst health outcomes in the nation. Under the expansion, Kentucky experienced the sharpest decline in the nation of residents with no health insurance.

But Bevin, elected last year, has said the plan is financially unsustainable, arguing the state can’t afford its growing share of the Medicaid costs even though the federal government funds the majority of Kentucky’s nearly $10-billion-a-year Medicaid program. About 1.3 million people, nearly one-third of the state’s population, now get health coverage through Medicaid.

At a recent hearing, state Medicaid Commissioner Steve Miller said Bevin’s plan would result in savings of $2.2 billion over a five-year period, about $1.9 billion of that in federal money and about $331 million of that in savings to the state.

That brought criticism from U.S. Rep. John Yarmuth, a Louisville Democrat, who spoke recently at the Louisville Forum, arguing that the savings mean a loss of $1.9 billion in federal money that would otherwise come to Kentucky.

The federal government pays 70 percent of the costs of Kentucky’s traditional Medicaid services for about 875,000 low-income people, including low-income pregnant women or very poor women with children, poor children, disabled people and the elderly in nursing homes.

It pays 100 percent of the costs of the additional 440,000 Medicaid members added through the expansion. That will drop to 95 percent next year and eventually to 90 percent.

Bevin has said that if federal officials don’t approve his proposal, he would simply abolish the Medicaid expansion Beshear enacted through executive order.

That has brought denunciation from advocates inside and outside Kentucky, including the Center for American Progress, a progressive public policy research organization based in Washington, D.C. In an Aug. 10 article, it said:

“Instead of issuing reckless ultimatums that threaten the  health and financial security  of low-income Kentuckians, Gov. Bevin should take a more responsible approach and build on the historic successes of health reform in Kentucky.”

This story will be updated.

Contact reporter Tom Loftus at (502) 875-5136 or at [email protected].