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Kentucky becomes first state to require work for some Medicaid beneficiaries

011218 Leonard Work Requirements Kentucky Medicaid pic
The announcement came a day after the Trump administration released guidelines for how states were supposed to implement the program. Republican Kentucky governor, Matt Bevin, says the current program in his state is unsustainable. (AP Photo/Bryan Woolston)

The Trump administration has approved a proposal from Kentucky that would require some Medicaid beneficiaries to work, volunteer or take classes as a condition of being enrolled in the program.

The commonwealth will become the first state in the country to implement such requirements, a request it initially made under the Obama administration. Under former President Barack Obama, the government determined that work obligations ran counter to Medicaid's mission of providing medical assistance to low-income people. Centers for Medicare and Medicaid Services Administrator Seema Verma helped to write the waiver as a private contractor, prior to the presidential election and to taking on her role in the administration, and recused herself from its review.

The approval comes only a day after the Trump administration issued guidance for states that want to carry out work requirement programs. Shortly after the federal government announced its decision on Thursday, pro-Obamacare groups vowed to take legal action as soon as a waiver was approved.

Kentucky has estimated that the work requirements and other changes it wants to make to its healthcare program will cause about 95,000 Kentuckians to fall from Medicaid rolls and would result in more than $2.2 billion in savings over five years. The waiver application, state officials wrote, “represents our good faith effort to continue Medicaid expansion in a responsible manner.”

“Our demonstration waiver seeks to continue health coverage for our existing Medicaid population while evaluating new policies designed to prepare individuals for self-sufficiency and private market coverage,” they wrote in the waiver.

People on the Kentucky program wouldn't have to work or take on other activities right away. During the first three months of being covered, they would have no requirements, and the longer people are on the program the more hours they would need to participate in activities, rising to 20 hours a week for those in the program longer than a year. Someone who doesn't fulfill his or her hours will have coverage suspended for a month.

The Kentucky program makes numerous exemptions for caregivers and, as federal guidelines stipulate, do not apply to people with disabilities, children, pregnant women and older adults. It also exempts people it categorizes as "medically frail," such as people with cancer, blood clotting disorders, or alcohol or substance abuse disorders.

Kentucky expanded Medicaid under its previous governor, Steve Beshear, who was a Democrat. The current Republican governor, Matt Bevin, has looked at ways to change the program and says it's unsustainable. In 2013, the state projected that 147,634 people would enroll in Medicaid expansion during the first year under Obamacare and would grow to 187,898 over the next six years. Instead, enrollment now exceed 428,000, Kentucky officials said in the waiver application.

"These costs have the potential to challenge the overall state budget and could create funding issues for other programs, such as education, pensions, and infrastructure, as well as also jeopardize funding for the traditional Medicaid program that covers the aged, blind, disabled, pregnant women and children," officials wrote in the waiver.

At a press conference announcing the waiver approval, Bevin called the waiver an "extraordinary opportunity for us to chart a path that will produce the kinds of results that are needed."

"It will be a model for the nation," he added.

Democrats are opposed to contingencies on Medicaid because they say it will become an impediment even to those who are exempted from enrollment. Rep. John Yarmuth, D-Ky., called it "dangerous" and said it would "jeopardize the healthcare of far too many Americans based on a cynical and insultingly erroneous belief that receiving Medicaid is synonymous with being lazy."

Bevin pushed back against the accusations at the press conference, saying his office saw it as an opportunity for residents.

"It's dangerous to nobody," he said. "How is it dangerous to give somebody an opportunity to make their life better? How is it irresponsible to expect people to be engaged in their own outcomes? To create an environment in which people have a chance to get healthier?"

He also indicated that he believed some people receiving Medicaid should be contributing to the program.

"Why should an able-bodied, working-age man or woman, with no dependents, not be expected to do something in exchange for that which they are being provided, when the people who are providing it to them are required to do the very same things? I think it's a fair question to ask," Bevin said.

Brian Neale, CMS deputy administrator and director for the Center for Medicaid and CHIP Services, praised Kentucky's waiver.

“Today’s approval is the result of the hard work of Gov. Bevin and his team and serves as a testament to Kentucky’s ongoing commitment to improving the lives of its Medicaid beneficiaries,” he said. “We look forward to reviewing the outcomes from Kentucky’s thoughtfully-crafted, groundbreaking demonstration, which will undoubtedly aid Medicaid reform efforts across our nation.”