Governor Andy Beshear will not move forward with former Governor Matt Bevin’s controversial changes to Kentucky’s Medicaid program. Beshear made the announcement Monday, within his first week in office.
Beshear said he’s sending a letter to federal officials to rescind the 1115 waiver that Bevin first submitted back in 2016. He also signed an executive order repealing Bevin’s signature health policy.
“Let me be clear, this Medicaid waiver would have cost Kentucky money, lives and jobs: I believe it would have saved us nothing,” Beshear said. “By every measure, Kentucky’s decision to expand Medicaid in 2014 has been a huge success.”
He addressed proponents of Bevin’s Medicaid changes.
“There will be some who argue that work requirements in the waiver would have encouraged people to get out into the workforce: the reality is the vast majority of people and expanded Medicaid already have one job, if not two jobs,” Beshear said. “For these people, their employer doesn’t provide private insurance and their income is low enough that they qualify for expanded Medicaid. The real way that we ultimately move people off of expanded Medicaid is through increasing wages for all Kentuckians.”
Flanked by health care advocates and Medicaid beneficiaries, including two that were plaintiffs in a lawsuit against the federal government for approving Bevin’s changes, Beshear said he’s asked a federal court to dismiss Kentucky’s role in defending the changes.
“By ending this waiver, we are ending Kentucky’s role in the litigation involving the waiver, which federal courts have already struck down,” Beshear said.
A federal court has twice struck down the waiver; earlier this year a U.S. Court of Appeals heard an appeal by the federal government and Kentucky. It’s unclear when a decision is expected.
Bevin’s signature health policy, which was never fully implemented because of court challenges, would have trimmed back some medical benefits and made it a little harder for some to keep coverage. Some Medicaid enrollees would have had to work, volunteer and do other activities to keep their health insurance. Some would have had to make monthly payments to keep coverage, while others would have faced co-pays.
Bevin first submitted his application for the changes to the federal government in August 2016. However, he was never able to implement them because of court challenges. Bevin argued that his changes to the program were necessary as eventually Kentucky would have had to put in more money to paying for Medicaid enrollee’s health insurance. The former governor also argued that these lower-income Kentuckians needed to be accountable and required to work or do other activities to eventually gain private employer coverage.
However, Beshear pointed to a Government Accountability Office report released in October that showed Kentucky’s estimate of implementing the waiver would cost $270 million.
“If this Medicaid waiver been fully implemented, it could have cost up to $270 million of taxpayer money: That is significant,” Beshear said. ‘The waiver would have cost our state hundreds of millions of dollars and raised costs to those that already have the least.”
Beshear referred to the program’s premiums and co-pays. Co-pays already went into effect earlier this year, and advocates say the change has patients to not go to doctor’s appointments or be turned away for not being able to pay.
The Affordable Care Act first made Medicaid expansion available to states in 2014, and former Gov. Steve Beshear –Andy’s father– took advantage of the opportunity to broaden the program to adults making up to 138 percent of the federal poverty line. Approximately 428,000 Kentuckians gained Medicaid health insurance under the expansion, and the state’s uninsured rate dropped from 25 percent in 2013 to 11 percent in 2018.
Before the implementation of the expansion, Medicaid eligibility for parents was at $11,491 for a family of three, and there was no coverage for adults without dependent children. Expansion broadened eligibility to a family of three making under about $16,000.
Research showed that in the years following expansion, low-income Kentuckians made fewer trips to the emergency room and had less trouble paying medical bills. And people who gained coverage under expansion also received preventive care like cancer screenings. Ben Chandler, the president of the Foundation for a Healthy Kentucky said his group is happy to see the program stop from moving forward.
“Going forward, we anticipate working closely with the Administration on implementing policies that increase equitable access to high-quality preventive and other health care services that all Kentuckians need,” Chandler said in a statement.
Will It Be So Easy?
Gov. Beshear sending a letter to the U.S. Department of Health and Human Services is only the first step in the process of rolling back the waiver, according to Jeff Myers, founder of health care consulting firm OptDis.
The head of the Centers for Medicare and Medicaid, which approved the Medicaid waiver, will have to accept the reversal of the waiver. Kentucky will also have to submit another document called a state plan amendment, which will have to go into much more detail on what exactly Beshear is trying to rescind.
“The state program office will have to review it, and that’s going to take several months: it’s not going to happen overnight,” Myers said.
The federal government may also ask for money back that was already given to Kentucky to help implement technology and other infrastructure that would enabled Bevin’s changes to operate.
“How much have they invested in it? And presumably they [the federal government] will want it back,” Myers said. “It seems unlikely that [Administrator] Seema Verma is likely to do anything for this governor. I can’t imagine she’s going to make it easy.”
Verma helped spearhead Bevin’s signature program, and also oversaw Indiana’s similar program.
This post has been updated.