A change sought by Gov. Matt Bevin to require many in Kentucky’s Medicaid program to pay premiums could cost many their benefits, according to the Kentucky Center for Economic Policy. While the KCEP is a liberal-leaning think tank based in Berea, it is basing its conclusions on data collected from a similar Medicaid waiver granted to neighboring Indiana two years ago.
Similar to what Bevin is seeking, the Indiana program allows the state to charge Medicaid recipients a monthly premium, just as a private insurer would. People above the poverty line are kicked out of Medicaid for six months if they miss a payment, while people in poverty are transferred to a more limited coverage plan that charges copayments for services.
More than half of the Indiana Medicaid beneficiaries required to pay premiums missed at least one payment during that time, the study concluded. The rate of nonpayment was highest among those living at or below the poverty line. Reasons for nonpayment were inability to afford the contribution, confusion about payment method or they didn’t know they were required to make a payment.
Like Indiana’s waiver, the Medicaid waiver Bevin requested for Kentucky would punish people for missing a premium payment either by locking them out of Medicaid for six months or dropping them to a more limited coverage plan. Recipients initially would have to pay from $1 to $15 a month, based on household income. After one year, those above the federal poverty line would have to pay $37.50 a month.
KCEP found Kentucky can expect many to be without coverage unmder the waiver, as cost and process of payment are likely to exclude many low-income residents.
Kentucky’s waiver application is being considered by the U.S. Department of Health and Human Services. Over the next five years, the changes it would make could shave $2.2 billion off the expected $37.2 billion cost of Kentucky’s Medicaid program, according to the waiver application. The tax dollars it would save is the biggest appeal of the proposed change.
The most controversial measures in Bevin’s plan include premiums and copays and a requirement that able-bodied adults be engaged in their communities for at least 20 hours every week, through a job, classes, volunteering or other specified activities.
We have no objection to the idea behind the proposed waiver. We think it is reasonable for even low-income residents to make small but affordable payments for their Medicaid benefits. Kentucky officials would be wise to carefully study the program in Indiana — and in any other states with similar programs — to learn from their strengths and weaknesses and design a more effective program in Kentucky.