Kentucky’s new Medicaid work requirement begins to roll out on July 1. So, what does it do?
Rachel Aretakis/Louisville Courier Journal
A federal appeals court in Washington, D.C., will hear arguments Friday in a case to decide whether Kentucky and other states can enact sweeping changes to Medicaid that include requiring some adults to prove they are working in order to keep health coverage.
It’s a key event in the ongoing battle over whether states can require low-income adults, mostly those added to Medicaid through an expansion under the Affordable Care Act, to report work or volunteer hours, pay premiums or meet other new rules.
“The Oct. 11 hearing is a huge moment,” said Judith Solomon, a senior fellow on health who follows Medicaid for the Center on Budget and Policy Priorities in Washington. “This is really the bellwether for all the cases.”
Kentucky was the first state to win federal approval for a Medicaid overhaul including work requirements after Donald Trump, a Republican, became president in 2017. But more states have similar plans in the pipeline.
Medicaid, funded largely by the federal government, provides health coverage to 75 million people nationwide and about 1.3 million adults and children in Kentucky.
The federal appeals court will decide whether the Kentucky plan proposed by Republican Gov. Matt Bevin violates federal Medicaid law, as a lower court has ruled. The panel of judges also will hear an argument from Arkansas, which along with Kentucky, had its proposal for Medicaid work requirements overturned in March by a federal judge in Washington.
It is the first such challenge to reach an appeals court and has far-reaching implications. So far, 15 other states either have won approval to enact Medicaid work requirements or are seeking permission to do so from the Trump administration, which has endorsed the idea and proposes enforcing it nationwide.
Supporters argue the changes, called “community engagement” requirements, will improve health outcomes and get more people into the workforce. Opponents say most adults on Medicaid already are employed and the complicated new rules will cause people to lose coverage and worsen their health.
Lawyers for the U.S. Justice Department and for Bevin are asking the appeals judges to reinstate Kentucky’s plan. Kentucky argues that, in Bevin’s words, “it is a transformative program designed not only to stabilize the (Medicaid) program financially but to improve health outcomes and overall quality of life for its members.”
“We maintain that in Kentucky, we want more than to simply give someone a Medicaid card — we want to provide a program that focuses on improving health outcomes,” said Christina Dettman, spokeswoman for the state’s Cabinet for Health and Family Services, which oversees Medicaid.
But a team of health law advocates argues the plans by Kentucky and Arkansas violate federal Medicaid law, which includes no provision for work requirements, and would cause tens of thousands of people to lose health coverage with no gains in employment or improved health.
By approving the plans, the Trump administration “overturned a half-century of administrative practice, ignored swaths of social science evidence and data and threatened irreparable harm to the health and welfare of tens of thousands of people,” said the response from the National Health Law Program, the Kentucky Equal Justice Center, the Southern Poverty Law Center and Legal Aid of Arkansas.
Joining them in opposing the Medicaid changes in “friend of the court” briefs are more than 60 deans, professors and researchers from top medical schools and universities around the country as well as national organizations including the American Medical Association, the Catholic Health Association and the American Academy of Pediatrics.
In court filings they said the changes will lead to “mass disenrollment” in Medicaid and “dramatically worse health outcomes.”
In March, U.S. District Judge James E. Boasberg, in striking down the plans of Kentucky and Arkansas, found the states had failed to failed to prove the changes would advance a central goal of Medicaid — to ensure health coverage to the country’s most vulnerable citizens.
More recently, Boasberg struck down a New Hampshire plan for Medicaid work requirements that the Trump administration had approved. Another lawsuit challenging Indiana’s Medicaid work requirements was filed recently in federal court in Washington.
Critics of the Medicaid changes argue that research shows a majority of adults covered by Medicaid already work at low-wage or part-time jobs that don’t offer health insurance, such as construction, housekeeping or food service.
The Kaiser Family Foundation, a nonpartisan health policy group, reports that 63% of adults covered by Medicaid work. A majority of those not employed would be exempt from the state work requirements because of disability, caregiving duties or medical conditions, it found.
Meanwhile, critics point to the experience of Arkansas — which had launched its work requirements before they were blocked by the federal court — as an example of why they should be struck down.
A study by researchers with Harvard University published in September in the New England Journal of Medicine found that after Arkansas began the program in 2018, nearly 17,000 people lost Medicaid coverage — even though most met requirements, they were unable or unsure of how to comply with the new rules.
For example, about a third of those affected lacked internet access, even though the state required people to report the hours they worked online. Others didn’t understand the rules or realize they applied to them, the study said.
It found no significant gains in employment, a key goal of the Arkansas plan.
“We don’t see the benefits that advocates of the policy have speculated we’d see,” said Dr. Benjamin Sommers, a Harvard professor of health policy and economics who led the study.
A separate survey of Kentucky led by Sommers and published in September by the Commonwealth Fund found nearly half of Kentuckians enrolled in Medicaid didn’t know anything about the state’s proposed work requirement.
It found that 97% of Kentucky adults covered by Medicaid already meet the proposed requirements by activities such as working or job training or because they would qualify for an exemption.
“These results indicate there may be relatively few Medicaid beneficiaries who might be compelled to work by the new policy,” it said.
A decision by the three-judge panel will be an important step toward resolving the legal dispute. But it likely won’t be the final word, with most observers predicting the U.S. Supreme Court will make the final call.
“I assume whoever loses will take it there,” said Solomon, the health policy fellow.
Bevin told the Bowling Green Daily News in September the case “will ultimately be decided by the Supreme Court. And we’ll win.”
But if Kentucky wins, implementing the changes depends on Bevin, whose term ends in December. In seeking a second, four-year term, he faces a challenge from Attorney General Andy Beshear, a Democrat whose father, former Gov. Steve Beshear, enacted the very changes to Medicaid that Bevin is seeking to revise.
Steve Beshear authorized the expansion of Medicaid under the Affordable Care Act that allowed about 450,000 more low-income Kentuckians to get health care under the federal-state program that previously had been limited mostly to poor pregnant women, children and people with disabilities or the elderly in nursing homes.
When Kentucky first expanded Medicaid in 2014, the federal government paid 100% of the costs of the expansion, an amount gradually reduced to 90% by 2020. The federal government pays about 80% of Kentucky’s overall Medicaid costs of $11 billion a year.
The Medicaid expansion helped Kentucky post one of the largest decreases in the nation of adults with no health coverage, dropping from 40% to 7% by 2016.
But it was controversial with conservatives. Bevin, who as a candidate had pledged to eliminate the expansion, took office in 2015 with a plan instead to restructure Kentucky’s Medicaid plan.
Andy Beshear has characterized Bevin’s plan as an effort “to throw thousands of families off the Medicaid program.” On his campaign website, he pledges to abolish Bevin’s Medicaid plan on his first day as governor.
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