Kentucky Gov. Matt Bevin, representing a state where the uninsured rate has plummeted from 14.3% to 6% since adopting the Medicaid expansion under the Affordable Care Act, is proposing sweeping Medicaid changes that would make it harder for Kentuckians to keep their coverage. He threatens to cancel the Medicaid expansion if HHS doesn't approve his plan.
HHS, which is expected to decide on Bevin's proposal in coming months, recently turned down a Medicaid waiver proposal from Ohio because it would reduce coverage and make healthcare less affordable. By rejecting Kentucky's proposal as well, HHS could send a strong signal to other states that restricting beneficiaries' access to coverage is not acceptable.
In reviewing waiver proposals, HHS considers whether they hold promise for improving coverage or health outcomes for low-income people, increasing access to health providers, or otherwise making healthcare for low-income people better or more efficient. Bevin says his plan, which is modeled in significant part on Indiana's waiver program, aims to produce better health outcomes. But the results from a state-commissioned evaluation of Indiana's first year under its waiver indicate that replicating the Indiana program would almost certainly do the opposite.
Key features of the Indiana program appear to keep some eligible low-income people from enrolling and keep some enrollees from getting needed healthcare.
Premiums are one example. Medicaid limits the extent to which states can impose premiums and other kinds of charges. That's because extensive research shows they make it much harder for low-income people to participate in health coverage programs, especially people with very low incomes and significant healthcare needs.
Indiana's waiver allows it to require people living below the poverty line—even those with no income—to pay a monthly premium to get a benefit package that includes dental and vision care. If they don't, the state will shift them to a plan that lacks dental and vision coverage and imposes copayments for doctor visits and prescriptions. Also, applicants' coverage isn't effective until they pay their first premium.
Those premiums appear to be depressing enrollment in Indiana below what it would otherwise be. Roughly one-third of eligible applicants whose enrollment is delayed until they pay their premiums end up not enrolling because they don't make a premium payment, the state-commissioned evaluation found.
The report also casts serious doubt on the effectiveness of the private accounts Indiana set up for each Medicaid enrollee. Modeled on health savings accounts, they're funded by the state and by premiums that enrollees pay into the accounts. Enrollees are supposed to use them to help cover their healthcare costs.
Indiana says the accounts are designed to “promote the efficient use of healthcare, including encouraging preventive care and discouraging unnecessary care.” But fewer than half of respondents to a survey conducted as part of the evaluation even knew they had an account. Many respondents also incorrectly answered a series of true-false questions about their accounts. The accounts can't act as an efficient incentive if enrollees don't know about or understand them.
Kentucky has been highly successful in enrolling people and providing equal access to care for all Medicaid beneficiaries under its Medicaid expansion. The state has enrolled more than 400,000 newly eligible residents in health coverage, and far fewer low-income residents are skipping medications due to cost or incurring debt from unpaid medical bills. A recent study found that low-income adults in Kentucky and Arkansas (another Medicaid expansion state) receive more primary and preventive care, visit emergency departments less often, and report better health than low-income adults in Texas, which hasn't expanded.
HHS should not allow Kentucky to take steps that could undermine those impressive results. And states that haven't yet expanded Medicaid should model their programs on states such as Kentucky, Arkansas, Ohio and others that have made great progress in covering more people, making sure the most vulnerable can obtain care.