The Trump administration on Friday told Kentucky it can go ahead with its controversial Medicaid overhaul ― an initiative that would reduce benefits, require some beneficiaries to work, and generally make it more difficult for people to stay on the program.
Administration officials and their Kentucky counterparts have portrayed the plan as a way to improve the health of low-income residents and encourage self-sufficiency among poor but able-bodied adults. “The result will be a transformational improvement in the overall health of our people and will provide a model for other states to follow,” Matt Bevin, the state’s Republican governor, said at a press conference Friday.
But there’s scant evidence that Kentucky’s changes will have the effects that Bevin and his allies are promising. In fact, of the roughly 95,000 people expected to lose coverage, some will almost surely be people who are working ― or have reasons why they can’t work ― but who failed to satisfy the new system’s paperwork requirements.
Almost by definition, the people likely to lose coverage already have some combination of financial and medical problems, and without coverage, both are likely to get worse. It’s not clear how much this worries Bevin and his allies in Washington ― or whether it worries them at all.
In the new scheme, most working-age adults in Kentucky would have to demonstrate that they have spent at least 80 hours a month working or engaged in employment-related activities, like searching for a job or performing community service. Many would also have to pay premiums, of up to $15 a month.
Anyone who does not pay their premiums or submit paperwork to show their eligibility would lose their coverage and would not be able to reapply for six months, although people who don’t pay premiums could restore coverage by completing a financial literacy course (the details of which aren’t yet clear).
The Kentucky initiative also eliminates a transportation benefit, designed to get poor people to the doctor or hospital when they don’t have the means to do so. And it ends “retroactive” eligibility, under which Medicaid covers bills from the past three months for people who sign up for Medicaid only after they’ve had a medical episode that landed them in the hospital.
Kentucky’s proposal is likely to prompt legal challenges. If it survives, then the result will almost certainly be a smaller Medicaid program. Both the state and the federal government would likely end up spending less money than they would otherwise. But fewer people would be on Medicaid: The number of beneficiaries would drop by roughly 95,000 within five years, according to official state estimates.
By comparison, Kentucky’s total Medicaid enrollment ― including kids on the Children’s Health Insurance Program ― is about 1.25 million right now, according to official statistics.
In theory, the new requirements would not affect children, the elderly, pregnant women, primary caregivers or the “medically frail,” because Kentucky’s proposal explicitly exempts them. But those categories are narrower than they might seem, experts warned Friday as they pored over the final proposal and checked it against previous versions. (Every analyst studying it has warned that their conclusions are still a little tentative.)
“Medically frail,” for example, doesn’t appear to include people with serious chronic diseases that make jobs difficult to find and keep. And the new paperwork requirements will be difficult for some people to satisfy ― because they can’t get the right documentation, for example, or because overwhelmed state offices won’t be responsive to questions.
As a result, some people who remain eligible for Medicaid will almost surely end up losing coverage anyway. It’s happened that way before, when states introduced work requirements for food stamps and straightforward cash assistance.
“The policy could allow many people to fall through the cracks, including those with chronic health conditions, and those with mental health or substance use disorders such as opioid addiction,” Hannah Katch, a senior analyst at the Center on Budget and Policy Priorities, told HuffPost. “And for those who are eligible for an exemption, the policy could still require someone who is medically frail, for example, to jump through administrative hoops to demonstrate that they are eligible for an exemption.”
Kentucky isn’t the only state that wants to impose these kinds of restrictions on Medicaid. Nearly a dozen states have similar requests sitting in Washington, awaiting approval from the Trump administration that they’re almost certain to get. More could follow soon.
Friday’s approval of Kentucky’s new plan came one day after the Trump administration announced it would approve work requirements. This represented a considerable policy shift. Previously, the Obama administration had rejected such requests, arguing that work requirements violate Medicaid’s guarantee of health care for poor people. These are the same arguments that advocates for the poor are likely to make if and when they sue to block the changes.
Trump administration officials, like their Kentucky counterparts, know this. In their letter approving the proposal, they previewed their defense by making the same argument they did on Thursday ― that requiring able-bodied Medicaid recipients to work would improve their health outcomes and help them become familiar with the way private health insurance works. That is why, the administration said, it was within its rights to approve Kentucky’s request as a “demonstration project.”
But there’s very little evidence to suggest Kentucky’s overhaul will improve health outcomes, and quite a lot of evidence to suggest it will actually worsen them. Multiple studies, some of them focusing on Kentucky specifically, have shown that giving people Medicaid makes them healthier and more financially secure, which in turn makes it easier for them to find and hold on to jobs.
There is also little reason to think these changes would make Kentucky’s Medicaid program more efficient. On the contrary, new requirements such as checking to make sure people have jobs will inevitably require more administrative work ― not just for the people who want Medicaid, but for the state government as well.
Retroactive eligibility ― a key if underappreciated provision of Medicaid in most states ― doesn’t simply help low-income people avoid crippling medical debt. It also helps finance the operation of safety net hospitals. Ending it, as Kentucky plans to do, would likely hurt both. When another state, Indiana, experimented with having Medicaid recipients contribute toward the cost of their Medicaid, large numbers did not, and they ended up losing coverage as a result.
Those are just some of the reasons to think the real motivation for these changes has little to do with health outcomes, efficiency or the economy as a whole. A more plausible explanation is that Republican officials ― including Bevin and Seema Verma, the Trump administration official in charge of Medicaid ― think too many able-bodied adults are on the program. In fact, Verma has said this explicitly before.
Many Americans ― quite possibly most ― would have no problem linking Medicaid and work. But nearly 80 percent of people on Medicaid are already in families where somebody is employed, and nearly 60 percent work themselves, according to data from the Henry J. Kaiser Family Foundation. And of those who don’t work, most are in school or caring for a family member, or have a medical condition that they say prevents them from working. Other studies have yielded similar findings.
That all of this should be happening in Kentucky is ironic. Although a relatively conservative state, smack in the heart of what now qualifies as Trump country, Kentucky enthusiastically embraced the Affordable Care Act when it became law. It took advantage of new federal money to expand its Medicaid program, so it would be available to all people with incomes below or just above the poverty line.
Between 2013 and 2016, the share of Kentucky’s residents without insurance fell from 20.4 percent to 7.8 percent. That was the single biggest drop of any state in the country.
But that change took place while Steve Beshear, a Democratic governor enthusiastic about helping poor people get health insurance, was in charge. Bevin, his successor and a loud critic of “Obamacare,” campaigned on a promise to roll back the expansion. Although he backed off that promise ― perhaps because many of those who supported him would have been among the hundreds of thousands losing coverage ― he has continued to suggest Medicaid needs radical changes because, he says, it encourages dependency.
Bevin has also made a threat that if he can’t get his way on the work requirement and other changes, he will go ahead and roll back the expansion after all. That would leave a much larger number of Kentucky residents, perhaps approaching half a million, without health insurance.
CORRECTION: A previous version of this story mistakenly suggested that “presumptive” eligibility is another term for “retroactive” eligibility. In fact, they are two separate things, and Kentucky’s overhaul repeals only the latter.