Starting Jan. 1, many Kentucky Medicaid recipients will have to make co-payments for a variety of health care services, including prescriptions, appointments with physicians, and emergency room visits for non-emergency services.
For years, the organizations that manage health care plans for Medicaid recipients could chose whether to charge co-payments for these services. In the past, those organizations, called MCOs, waived some or all co-payments for Medicaid recipients, according to a Cabinet for Health and Family Services spokesman.
The new co-payment rules — separate from Kentucky HEALTH, the state’s new Medicaid policy set to roll out April 1 — remove the MCOs ability to waive co-payments and require patients to pay the fees when they receive care.
Some Medicaid recipients will be exempt from the co-pays, including pregnant women, children, and individuals receiving hospice care. People whose income is at or below the federal poverty level also are exempt.
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Most co-payments will be between $1 and $8, but inpatient services, such as hospital admissions or mental health and substance abuse admissions, will be $50.
Emily Beauregard, executive director of Kentucky Voices for Health, a coalition of health care advocates, said she’s worried the co-pays will cause confusion among recipients who may have assumed all Medicaid changes would come in April with the proposed implementation of Kentucky HEALTH.
In addition, Beauregard said mandatory co-payments will dissuade people from getting the care they need, leading to more long-term health problems that will ultimately cost the state more money.
“It’s just a barrier to care,” Beauregard said. “It’s a safety net program for a reason, and the fewer barriers that we have, the more people are able to access the care they need when they need it.”
Officials with the Kentucky Cabinet for Health and Family Services, though, hope mandatory co-payments and the Kentucky HEALTH program will “empower individuals to improve their health and their lives,” spokesman Doug Hogan said in an email to the Herald-Leader.
“Just as we have put in place programs that provide support for education, workforce development, volunteerism and other training efforts, it is important that the individual participate in this process by prioritizing their spending to allow for payment of co-payments,” Hogan said. “We hope to see a greater involvement in these training programs, but equally important (is) more involvement in their health care decision-making, not only for the individual but also for their children.”
Mandatory co-payments will also help Medicaid recipients prepare as they transition from Medicaid into the commercial insurance market, Hogan said.
On April 1, when the state’s new Medicaid program is scheduled to roll out, monthly premiums will become the default payment plan for Medicaid recipients, rather than co-payments.
The premiums range from $1 to $15 a month depending on a family’s income, according to the Kentucky HEALTH website.
That plan, which is expected to be challenged in court, also would impose 80-hour-a-month work requirements and monthly check-ins on several hundred thousand able-bodied adults enrolled in Kentucky’s $9.7 billion-a-year Medicaid program. About 95,000 people are projected to lose their publicly-funded insurance during the next five years because of those changes.
Beauregard said the implementation of mandatory co-payments just four months before Kentucky HEALTH is planned to launch will create a “massive amount of confusion and chaos.”
“The timing is really terrible,” Beauregard said. “What’s the rush? Why do we need to make a big change now and another big change three months later?”
“From our perspective, it’s unwise do to major changes like this back to back,” she said.
According to a 2017 report by the Henry J. Kaiser Family Foundation that reviewed 65 papers on the effect of cost-sharing mechanisms, such as co-pays, on Medicaid and Children’s Health Insurance Program beneficiaries, even small co-payments can lead to unintended negative consequences.
The report found that small, mandatory payments lead to increased use of emergency rooms, increased rates of high blood pressure, and serious financial burdens for low-income families, “causing some to cut back on necessities or borrow money to pay for care.”
Though officials hope mandatory co-payments, along with the implementation of Kentucky HEALTH, will encourage Medicaid recipients to move to commercial market insurance, the Kaiser report found that many either become uninsured or face other financial difficulties as a result.
“There are people who just don’t have that money,” said Rachael FitzGerald, director of member services and federal programs for the Kentucky Primary Care Association, a not-for-profit corporation of Kentucky health care providers. “If the patient does not pay upfront, the providers will lose that income.”
FitzGerald said providers may run into problems when trying to determine whether a patient should be required to make a co-payment.
The Cabinet for Health and Family Services released a PowerPoint presentation earlier this year showing providers how to navigate the Kentucky Medicaid Management Information System, the online database providers use to determine whether to charge a co-payment.
FitzGerald said the effectiveness of this system, though, and providers’ ability to use it, is “the most worrisome part.”
“The biggest confusion will be … who has to pay and who doesn’t have to pay,” FitzGerald said, adding that patients, too, will may be caught off guard in January when they’ll be charged a co-payment by their health care providers. “Yes, of course there’s going to be confusion, but like many other things that are coming ahead, people will adjust, and they’ll know their expectation to pay something.”