Bevin plans to move ahead with Medicaid changes, but another court battle is likely

Nov. 27--Kentucky now has federal approval to try again next April with a plan imposing 80-hour-a-month work requirements, premiums and monthly check-ins on several hundred thousand able-bodied adults enrolled in its $9.7 billion-a-year Medicaid program, with 95,000 people estimated to lose their publicly funded insurance during the next five years.

But this second launch attempt for Gov. Matt Bevin's Kentucky HEALTH initiative is likely to end up where the first round did -- in court. The health advocacy groups that convinced a judge to strike down the federal government's first approval of Bevin's proposal in June say they will return to that judge early next year with an amended complaint raising similar objections.

The groups' lawsuit, filed Jan. 24 on behalf of 15 Kentucky Medicaid recipients, claims Kentucky HEALTH would violate the 1965 law establishing Medicaid because it would reduce access to health care for poor people who need it.

"The Bevin administration has submitted the same flawed plan to CMS for review, and CMS has engaged in the the same flawed analysis. So we would expect the court to view it similarly," said Ben Carter, attorney for the Kentucky Equal Justice Center, one of several groups challenging the Medicaid waiver in U.S. District Court in Washington, D.C.

"It's sort of like the definition of insanity, doing the same thing twice but expecting a different outcome," Carter said.

Initially, Kentucky HEALTH was supposed to launch in July in Northern Kentucky's Campbell County and gradually phase in across the rest of the state by December.

However, U.S. District Judge James Boasberg blocked that roll-out, ruling that CMS "never adequately considered whether Kentucky HEALTH would, in fact, help the state furnish medical assistance to its citizens, a central objective of Medicaid. This signal omission renders (the waiver approval) arbitrary and capricious."

Little changed between Kentucky's first and second Medicaid waiver applications and the two approvals granted by the U.S. Centers for Medicare and Medicaid Services, the most recent of which came last week, these critics say. CMS' 136-page re-approval made brief references to the overwhelmingly negative public comments about Kentucky HEALTH, rejecting each objection raised.

Bevin has promoted Kentucky HEALTH by saying that able-bodied adults on Medicaid will do better if they are engaged in their communities, either as workers, volunteers or students, and if they contribute something toward the cost of their care. Monthly premiums would begin at $1 to $15, eventually topping out at $37.50

"This idea that we are somehow punishing people -- that somehow this will be a detriment to people -- I think is a huge, huge misunderstanding of what people need, the dignity and the respect that comes from giving people an opportunity," Bevin told reporters earlier this year.

Bevin repeatedly has threatened to terminate Kentucky's expanded Medicaid program for more than 400,000 low-income adults if the courts prevent him from going forward with Kentucky HEALTH.

On Tuesday, Health and Family Services Secretary Adam Meier told a legislative committee that the state is proceeding under the assumption that Kentucky HEALTH will launch April 1.

When a lawmaker asked Meier about the possibility of additional delays due to litigation, he replied: "There's always a chance." But the state and CMS put a lot of effort into addressing concerns in this second round of application and approval paperwork, he said.

"I think what they've done a really good job of is really drawing out the various things we did in that process so that we could better highlight all the thought that went into ensuring that this program was designed to engage people but not create issues with people having access to the coverage they have today," Meier told the Interim Joint Committee on Health, Welfare and Family Services.

Meier also took issue with the estimate of 95,000 people who would lose Medicaid coverage during the first five years of the waiver. He said that figure would include Kentuckians "graduating" from Medicaid for a job and private insurance coverage, which should be considered a success.

The one waiver-approved state already imposing similar requirements on Medicaid recipients, Arkansas, has cut more than 12,200 people since September for failing to make monthly employment and income status reports on a state government website.

Such drastic numbers prompted a federal oversight panel on Nov. 8 to call for "a pause in disenrollments" until the state can better educate people on their reporting obligations and make the task easier for them. For one thing, the panel said, online-only reporting can be difficult for poor people in Arkansas, a rural state that ranks among the least digitally connected in the nation.

"The Medicaid population has been historically hard to reach and educate," the Medicaid and CHIP Payment and Access Commission wrote to the federal government. It added: "These concerns present lessons for other such waivers."

More than 1.3 million Kentuckians were enrolled in Medicaid in September, about 30 percent of the state's population, a drop of 6.7 percent since January. That includes the traditional Medicaid program covering the disabled, the elderly and families with dependent children, and the expanded Medicaid program, approved under the Affordable Care Act, covering able-bodied, low-income adults, many of them workers who are not provided with health insurance by their employers.

The percentage of private sector jobs in Kentucky that came with health insurance fell from 70 in 1980-82 to 54 in 2014-16, according to research by the Kentucky Center for Economic Policy in Berea.

For Kentuckians laboring near the minimum wage in stores, restaurants and hotels, Medicaid is how they provide health care for their families, said Dustin Pugel, a policy analyst for the center. The work requirement might not be a problem for this population, since they already work, but finding the time every month to report their wages and hours would be, Pugel said.

"It can be so easy to miss a reporting deadline and get locked out when you have a flip-phone and no reliable access to the web at home," Pugel said.

"That's what we're seeing right now in Arkansas," Pugel said. "Real people are not very good at keeping up with their reporting requirements because their lives get in the way. They have kids to take care of, meals to cook, jobs they have to get to. They don't have the time to keep logging onto a government website and keep reporting all of this stuff. And quite frankly, that's not what most of us are expected to do to keep our insurance, is it? Most of us enroll in our insurance once a year and then we're done."

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