Kentucky's new Republican governor, Matt Bevin, a staunch opponent of the Affordable Care Act, will seek a waiver to overhaul his state's expanded Medicaid program. He cited Indiana's cost-sharing model as one to possibly replicate.
But Bevin offered few details last week on how the program would work, although he did call for a block-grant system championed by conservatives. He also criticized Steve Beshear, his Democratic predecessor, accusing Beshear of lying about the benefits of Medicaid expansion.
“That is literally not sustainable financially,” Bevin said about Medicaid, which covers 1.3 million low-income people in the state. He argued that Kentucky's traditional Medicaid has a $128 million shortfall.
Bevin captured Kentucky's governorship this past November and pledged to change its Medicaid program. Beshear, an ACA supporter, expanded Medicaid to adults earning up to 138% of the federal poverty level. The former governor also established a state-run insurance exchange, which Bevin wants to disband. Many hospitals and doctors supported Beshear's effort because the expanded insurance coverage equated to more payments and less charity care.
Last February, Beshear's administration released a study conducted by accounting firm Deloitte and the University of Louisville that reported Medicaid expansion was paying for itself. Beshear told Modern Healthcare in 2014, before the Deloitte study was released, that economic advisers told him the state “can't afford not to” expand Medicaid.
“I feel very confident that by the time Kentucky has to start picking up a small share of the expanded Medicaid program in 2017, we will be able to afford it and keep the program in place,” Beshear said.
Last week, Bevin called the Deloitte Medicaid study a “straight-up, straight-out lie” and a distraction. “This is imploding financially, and (the Beshear administration) didn't want us to focus on that,” Bevin said.
Bevin said his administration will pursue a Sect. 1332 waiver, a component of the ACA that allows states to craft their own healthcare reform programs, as long as the number of those covered remains the same or greater. States can apply for a 1332 waiver starting Jan. 1, 2017.
If Indiana inspires Kentucky's plans for revised Medicaid expansion, the state's low-income residents will pay for more of their coverage costs, which some believe might discourage enrollment.
Bevin didn't say whether the proposed changes would lead to Medicaid beneficiaries losing coverage. But he emphasized that “it's important to empower people.” He mentioned the new Medicaid program would focus on “better health outcomes,” but there were no details on how that would be accomplished, or if it would change the payment structure for hospitals and physicians. It's also unknown how the managed-care companies that administer Kentucky's Medicaid program—Aetna, Anthem, Humana, Passport Health Plan and WellCare Health Plans—would be affected.
Mark Birdwhistell, vice president of external affairs and administration at University of Kentucky HealthCare, will lead drafting of the waiver plan to submit to the CMS. Bevin expects to have a model ready for the CMS “by the middle of next year,” and said he's already had positive conversations with HHS Secretary Sylvia Mathews Burwell.
