FRANKFORT, KY (CNHI) - Calling it "transformational in all ways," Republican Gov. Matt Bevin announced Friday that Kentucky is the first state granted authority to require "able-bodied adults" on Medicaid to work in exchange for health coverage.
The federal Centers for Medicare and Medicaid Services informed Bevin's administration Friday of the approval on an 1115 waiver to tailor the federal program which provides health coverage for the poor, disabled and elderly to match Kentucky's population and circumstances.
"It will indeed become the model for the nation -- mark my words," Bevin said Friday.
The approval comes a year and a half after Bevin first sought approval to redesign Kentucky's $11 billion, federal-state program which covers about one-third of the state's population to ensure beneficiaries "had some skin in the game," as Bevin put it at the time.
The waiver's prospects didn't look promising under the Democratic administration of Barack Obama, but was viewed here as an almost certainty once Republican Donald Trump was elected president.
A clearly pleased Bevin went so far as to describe the approval as a first step in "entitlement reform" which he claims will become a model for the nation.
Under the waiver, about half of those in Kentucky who are covered under the Medicaid expansion authorized by the Affordable Care Act will be required to work 20 hours a week, or volunteer in their communities for that many hours each week, or receive the equivalent number of hours of education.
Administration officials call that "community engagement" a key component of the program they've named Kentucky HEALTH. They claim the program will help beneficiaries "transition" to commercial insurance and better employment opportunities.
Most Republicans, including U.S. Senate Majority Leader Mitch McConnell, R-Ky., hailed the announcement while Democrats bewailed it.
"I applaud CMS and Governor Bevin for recognizing the unaffordable mess left behind by his predecessors and responding with innovative, common-sense steps to engage patients, improving health, and reduce the burden on Kentucky taxpayers," McConnell said in a written statement.
But Kentucky's lone Democratic Congressman, John Yarmuth, of Louisville, called the move "dangerous and irresponsible" and said Bevin is "sabotaging" health coverage for 95,000 Kentuckians -- the number of enrollees the Bevin administration predicts will be removed from Kentucky's Medicaid rolls over the next five years.
They estimate the changes will save about $2.4 billion over five years. But most of that will accrue to the federal government which pays for 90% of the costs for the expanded Medicaid population. Kentucky will see a savings of perhaps $340 million over the same time period.
Under Bevin's Democratic predecessor, Gov. Steve Beshear, Kentucky embraced Medicaid expansion and was viewed as a national model for its implementation of the ACA. Early projections by the Beshear administration were that it would enroll about 180,000 Kentuckians.
Instead, more than 480,000 enrolled, bringing the state's total Medicaid enrollment to nearly 1.4 million, adding strain to an already severely constrained state budget.
Proponents, health officials and advocates for the poor argued the program would improve Kentucky's miserable health rankings while representing a bargain because the federal government paid all of the costs of the expansion for the first three years and 90% of the costs thereafter.
Those same voices see Kentucky HEALTH as creating barriers to health care for the poor which will lead to poorer health outcomes and reduced workforce.
Dustin Pugel, policy analyst with the Kentucky Center for Economic Policy, said Friday the change will reverse "the historic progress" Kentucky made in health care over the past two years.
"New barriers to getting covered and new ways of getting kicked off coverage will hurt working Kentuckians, health care providers and our economy," he said.
But Bevin said Friday the community engagement feature will allow Kentuckians on Medicaid "the respect and dignity to do something for themselves."
According to administration officials, the changes will affect only "able-bodied adults" who are not caregivers for others, or are not already working, or attending education classes. Those affected will be charged family premiums of $1 to $15 a month, depending on income levels.
The changes will not affect those covered by the traditional scope of Medicaid prior to the ACA: the elderly, disabled, medically frail, pregnant women or those caring for children or other family members.
Kentucky HEALTH will be phased in beginning in April with provisions kicking in on July 1. Bevin said he expects it to be fully up and running by fall, however.
Even though approved by the CMS, the changes are likely to face court challenges, according to advocates who contend federal law forbids work requirements and premiums for those in poverty. Asked if he expected such a challenge, Bevin answered, "We'll see."
To see if a person will be required to work to get Medicaid under this new regulation, click or tap here.