At a news conference Wednesday morning in Frankfort, Gov. Matt Bevin announced his much-anticipated plan to remake the state's expanded Medicaid system.
Under the plan, which would require federal approval, Kentuckians who earn between 34 percent and 138 percent of the federal poverty line would be required to pay fixed premiums for the insurance. The premiums will range from $1 to $15 for "able-bodied adults," according to Mark Birdwhistell, University of Kentucky HealthCare's vice president for administration and external affairs who is heading up the state’s waiver process
Bevin said requiring users to pay premiums would give them "dignity and respect."
Bevin also said the changes would create about $300 million in savings for the state and $1.9 billion in savings for the federal government and over the next five years.
The program will be called Kentucky H.E.A.L.T.H., which stands for "Helping to Engage and Achieve Long-Term Health."
Bevin's predecessor, former Democratic Gov. Steve Beshear, expanded the state's Medicaid program under the Affordable Care Act. More than 400,000 Kentuckians have signed up for the expanded service.
Vision and dental insurance would not be covered under the proposed program. Medicaid recipients would be able to earn credits to purchase additional benefits like vision or dental by participating in volunteer work and taking a health risk assessment.
Birdwhistell said those who don’t pay their premiums will be temporarily kicked off Medicaid.
“There will be a lockout period if they do not pay their premiums, but we’re giving them a chance — we’re call those ‘on ramps’ — that they have the ability to come back on,” Birdwhistell said.
Those who end up locked out would have to take a health literacy class and pay back the amount they owe to start receiving services again.
Premium prices would increase for those who earn more than 100 percent of the federal poverty line.
Bevin also issued an ultimatum to federal officials who will review the plan:
Bevin: if CMS doesn't approve the 1115 waiver, expanded Medicaid program will be repealed in Kentucky
— Ryland Barton (@RylandKY) June 22, 2016
“[U.S. Health and Human Services Cabinet] Secretary Burwell and her team will decide whether there will be expanded Medicaid in the State of Kentucky,” Bevin said. “The commonwealth’s expansion of Medicaid is now going to lie in the hands of [the Centers for Medicare and Medicaid Services].”
Bevin’s administration has instituted a 30-day comment period on the official plan, which is posted on the state’s Cabinet for Health and Family Services website. Officials said they plan to officially submit the waiver to the federal government on Aug. 1, with hopes of getting approval sometime in September.
The plan would then be rolled out in several counties on a trial basis.
“We’ll start small, there’ll be a pilot program, and we will ultimately roll this out to increasing numbers of counties. And ultimately, the intent would be to the entire state,” Bevin said.
Save Kentucky Healthcare, a nonprofit group started by former Gov. Beshear, criticized Bevin’s proposed changes.
“Gov. Matt Bevin declared war on Kentucky’s working families today by announcing his intentions to take away health benefits, increase costs and institute unwieldy requirements for those families to keep health coverage," the group said. "And if the federal government refuses to accept these draconian changes, he threatened to kick hundreds of thousands of working Kentuckians off of health care.”
Susan Zepeda, president and CEO of the nonprofit Foundation for a Healthy Kentucky, said there are elements to praise and areas of concern in the proposal. Among the former are improving efficiency for Managed Care Organizations, new incentives that reward healthy behavior and Bevin's commitment to put some of the savings from the changes into drug and mental health treatment.
But she said excluding dental and vision benefits from the program, anticipated drops in Medicaid enrollment and financial penalties for those who don't pay premiums raise concerns.
"Low-income Kentuckians eligible for Medicaid often have very different health issues and living circumstances from those of the average state employee covered by the health plan after which this is modeled," she said.
Federal Officials Await Proposal
Ben Wakana, press secretary for the U.S. Department of Health and Human Services, said the federal government has been working with the state to find a solution that “continues progress” on the state’s health care gains.
“We are hopeful that Kentucky will ultimately choose to build on its historic improvements in health coverage and health care, rather than go backwards,” Wakana said in the statement.
“Kentucky is only beginning the Medicaid waiver process and has not yet submitted a waiver to CMS. When it does, we will evaluate the waiver based on our longstanding principles of access to coverage and affordability of care, principles that we have repeatedly shared with the state.”
There are several possible points of contention between Bevin’s proposed Medicaid overhaul and what the federal government has allowed states to do in the past.
According to a letter sent from HHS Secretary Sylvia Burwell to Arkansas Gov. Asa Hutchinson, the federal government refused to allow Arkansas to require people to work to be eligible for Medicaid benefits.
“Consistent with the purposes of the Medicaid program, we cannot approve a work requirement,” Burwell wrote.
Additionally, according to an HHS official, state’s aren’t allowed to impose premiums that prevent low-income people from accessing coverage and can’t penalize people for needing Medicaid coverage for multiple years.
U.S. Sen. Mitch McConnell praised Bevin for the proposed Medicaid overhaul, criticizing previous Gov. Steve Beshear’s moves that embraced the Affordable Care Act.
“I applaud Gov. Bevin for recognizing the unaffordable mess left behind by his predecessor and responding with innovative, common-sense steps to engage patients, improve health and reduce the burden on Kentucky taxpayers,” McConnell said in a statement.
Rep. Jeff Hoover, the Minority Leader of the state House, also celebrated Bevin’s proposal.
“Kentucky must focus on results-driven health and a cost-sharing approach, rather than the continued reliance on taxpayer-funded benefits and the further erosion of health that has resulted from Obamacare and Medicaid expansion," he said.
Democratic House Speaker Greg Stumbo said a legislative review of the proposal is already in the works.
“We have asked our Budget Review Subcommittee on Human Resources, which is chaired by Rep. Joni Jenkins, and the House Task Force on Vulnerable Kentuckians, which is chaired by Rep. Jim Wayne, to analyze the proposed waiver and determine what effect this will have on Kentuckians," he said.
