[UPDATE: This story was updated at 3:50 p.m. ET with comments from Kentucky’s governor and details on who would be exempted from the state’s new rule.]
Thousands of poor adults in Kentucky will have to find jobs and pay monthly premiums to retain their Medicaid coverage as a result of drastic changes to the state’s health insurance program approved Friday by the Trump administration.
With the long-expected decision, Kentucky becomes the first state to win federal approval to test a new work requirement in Medicaid, a controversial policy shift likely to result in a court battle over whether the administration overstepped its legal authority.
“I was raised by a father who said, ‘Don’t take something that is not earned,’” said Republican Gov. Matt Bevin in announcing the approval of Kentucky’s Medicaid waiver. “The vast majority of able-bodied men and women, able-bodied Kentuckians, they want the dignity associated with being able to earn and have engagement in the very things they are receiving, and an opportunity not to be put in a dead-end entitlement trap but given a path forward and upward.”
Conservatives say the work requirement can help lead people to employment and off the state-federal health program. Democrats, health providers and patient groups say the measure adds another stumbling block for people to keep their coverage.
“By lessening dependence on government assistance and promoting individual self-sufficiency, Kentucky’s efforts should also help to promote the fiscal sustainability of the program to better protect services for the Commonwealth’s most vulnerable,” Demetrios Kouzoukas, principal deputy administrator of the Centers for Medicare & Medicaid Services, wrote in his Kentucky approval letter. “Overall, CMS believes that Kentucky HEALTH [Helping to Engage and Achieve Long Term Health] has been designed to empower individuals to improve their health and well-being.”
The approval comes one day after the Trump administration released guidance to states on how to design and test programs that require work as a condition of receiving Medicaid.
A study by the Kaiser Family Foundation found that 6 in 10 non-disabled adults on Medicaid already work at least part time, although they often aren’t offered health benefits through those jobs or can’t afford them. (Kaiser Health News is an editorially independent program of the foundation.)
Surveys show that many Medicaid enrollees who don’t work are in job training, go to school or are taking care of a child or an elderly relative, conditions that would make them exempt from the new mandate, according to the CMS guidelines.
Kentucky’s program would require non-disabled adults each month to participate in 80 hours of work, job training, education or other qualified “community engagement.”
Those who are exempted include children and former foster care kids, pregnant women, senior citizens, people who are the primary caretakers for a child or a disabled adult, those who are deemed medically frail or diagnosed with an acute medical condition that would prevent them from working, and full-time students.
Officials acknowledge that the work requirement — coupled with other changes in its waiver request — would lead to about 95,000 fewer people enrolled after five years. But many of those would drop out not because of finding work but because they can’t overcome the new bureaucratic hurdles, say advocates for the poor.
“We expect that fewer people will be able to stay enrolled in coverage due to all of the red tape and penalties they’ll encounter,” said Emily Beauregard, executive director for Kentucky Voices for Health, an advocacy group. “Keeping up with the reporting requirements alone will be enough of a burden on people who have two or three part-time jobs that they’ll either lose coverage at some point or may decide it’s not worth enrolling to begin with.”
The Kentucky approval brings other major changes to the state’s Medicaid program, which has doubled in enrollment to 1.2 million people since the state expanded eligibility in 2014 under the federal Affordable Care Act.
The revisions would cut dental and vision coverage for many adults, although they can regain it by completing health-related activities, such as taking a disease management class or volunteering.
Individuals with income above the poverty level ($12,060) who do not pay their premiums in 60 days will be kicked out of coverage for six months. Enrollees can return to the program earlier if they pay two months of missed premiums and make one new premium payment. They also must complete a financial or health literacy course.
The state also eliminates its non-emergency transportation benefit for some adults in the program.
Under Kentucky HEALTH, enrollees will make a monthly payment ranging from $1 to $15 depending on income. Pregnant women and children will be exempt from that cost sharing.
The Kentucky Medicaid changes generally mimic those of neighboring Indiana, which altered its program in 2015 under then-Gov. Mike Pence.
CMS Administrator Seema Verma recused herself from the Kentucky decision because she had worked with state officials on the waiver request when she was a consultant before joining the Trump administration.
Kentucky is one of 10 states that have applied to CMS to enact a work requirement.
The work requirement is one of the biggest changes in the history of Medicaid, which covers more than 74 million people, or about 1 in 5 Americans. It is the nation’s largest health insurance program.
The majority of enrollees in Medicaid are children, pregnant women and elderly nursing home residents. But the expansion under President Barack Obama led to millions of non-disabled low income adults added to the program.
Update: This story was updated on Jan. 12 to add information from the governor and more details on the Kentucky waiver once they were released.