Foundation for a Healthy Kentucky has many concerns about new Medicaid plan; health officials say current plan is not sustainable

By Melissa Patrick
Kentucky Health News

FRANKFORT — At a legislative committee meeting July 20, health advocates urged the administration of Gov. Matt Bevin to make sure the final plan is evidence-based and that they fully understand the people it will affect. Administration officials said changes are needed because the 2014 expansion of the program isn’t sustainable.

“We are asking, as in any well-designed program, that it starts with an awareness of who are these people we are trying to help, what jobs are available in their communities, what is their education level, are they already working two or three jobs, or not able to find a job, do they have access to a computer?” said Susan Zepeda, president and CEO of the Foundation for a Healthy Kentucky.

Bevin’s plan calls for participants to pay premiums and have a higher level of involvement in their care, including community engagement and work requirements for able-bodied adults who aren’t primary caregivers or dependents — requirements that Bevin calls “skin in the game,” but health advocates call “barriers to care.”

“Kentuckians who don’t have paid sick leave, reliable transportation or a bank account already face greater barriers to obtaining and keeping insurance coverage and participating in their own health improvement. Their lost wages and time investment are their ‘skin in the game’,” Zepeda said in a news release. “A Medicaid reform plan that creates more barriers will exacerbate the state’s already challenging health statistics and health disparities.”

In her testimony, Zepeda praised several aspects of the waiver proposal, including the expansion of substance abuse treatment services, sustaining the behavioral health services in the state, managed care organization reforms and its healthy behavior incentives.

But she also came with a long list of concerns, such as the loss of dental and vision benefits from the core benefit package, denial of services and monetary penalties for nonpayment of premiums, the work requirements, the loss of non-emergency transportation to and from medical appointments, the reduction in smoking-cessation options, and the premiums for all income levels.

Despite provisions for regaining coverage after nonpayment, Zepeda said, “In some ways we liken this to taking a hungry child with a bad tooth ache who is misbehving in school, can’t pay attention and kicking that child out of school and then wondering why he or she isn’t learning.”

Republican Rep. Addia Wuchner of Florence said she supported the requirements for able-bodied Kentuckians to have to earn their dental and vision benefits because it will “help them to be an engaged health-care consumer.”

But Zepeda said poor people struggle to save money, especially when they don’t make enough to buy groceries or pay the rent. She said many in this population work, and wouldn’t have time to peform extra tasks to get dental or vision services.

Wuchner also supported the work and volunteer requirements. “If this would incentivize that individual to take the extra step to gain more education so that there are other jobs available to them, I just say that that is an incentive, not a disincentive,” she said.

Gabriela Alcalde, vice president of policy and programming at the foundation, said research does not support the effectiveness of work requirements for the poor. While voluntary skills and education training have been found to have very positive outcomes, mandatory work requirements do not have lasting effects, she said, so once people get out of the program, the effects disappear.

“They also increase poverty in some cases and do not in any way eliminate the barriers to access,” Alcalde said. “So we actually have people lose coverage, but not maintain gains with certain strategies.”

Zepeda said Bevin’s request to the federal government, for a waiver of normal Medicaid rules, would better seek such things as price transparency, which would allow participants to price-shop for their health care; integration of behavioral health, oral health and primary care under one roof; or to deliver care where people are, like schools.

“There are lots and lots of opportunities for care delivery reform that will lift up Kentuckians, make the access to care more equitable and help the state prosper,” she said.

Sen. Danny Carroll, R-Paducah, who earlier in the meeting said that the requirement for individuals to be on their employee based health plan if possible would likely add a financial burden to small businesses, summed it up.

“If you have to choose between some requirements and ownership or not being able to serve that population at all, I think it is clear that we have to require the ownership and some input and some investment from these folks to keep the system going,” he said. “I think it is a good balance on what we are trying to do without totally doing away with expanded services, but being able to afford it as a state.”

Administration defends plan

Medicaid Commissioner Steve Miller said that almost 500,000 people have been added to the Medicaid rolls through the expansion, which allows those with incomes to 138 percent of the federal poverty line to get Medicaid, with no long-term plan to pay for them.

“One of the concerns from the very beginning has been the sustainability of Medicaid expansion as we know it today,” he said, noting that the cost to the state between 2017 and 2021 will be $1.2 billion. The federal government pays for the expansion through this year, but next year the state will be responsible for 5 percent, rising in annual steps to the reform law’s limit of 10 percent in 2020.

The Steve Beshear administration said the expansion would pay for itself by creating health-care jobs and tax revenue, but the Bevin administration has said that hasn’t happened. No one has offered definitive figures.

“The funding will just not be available,” Miller averred. He said Medicaid’s budget has been increased by approximately $600 million over the next two years, while the consensus revenue projection is that new revenue coming into the state during the same time frame will be $585 million.

“Medicaid consumes every new dollar of revenue that comes into the state over the next two years,” without change, Miller said, and that will continue in the following budgets. That means that paying for Medicaid will crowd out all other initiatives, like pension funds, education, and corrections, he added.

The administration estimates that the waiver would reduce total Medicaid spending over five years by $2.2 billion dollars, but only $331 million of that would be state money, as a result of lower enrollment and less use of the program.

Adam Meier, Bevin’s deputy chief of staff, said the new plan’s goals are to improve participants’ health, to instill personal responsibility, to move people into commercial health insurance plans, to empower people to seek employment and to achieve fiscal sustainability.

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