Questions arise over Kentucky's Medicaid cuts following work requirement rejection

Kentucky Republican Gov. Matt Bevin's administration announced it will cut dental and vision coverage for nearly 500,000 Medicaid beneficiaries in response to a federal judge's rejection of the state's Medicaid work requirement.

An administration spokesman said the court ruling Friday knocks out the state's new system of paying for all dental and vision coverage for Medicaid expansion enrollees.

But critics say that announcement is misleading, and that beneficiaries will continue receiving the limited dental and vision benefits they've had all along. They say the move is part of Bevin's effort to push through his conservative changes to the state's Medicaid expansion by threatening to end it or roll it back if he doesn't get his way.

A spokesman for the state Cabinet for Health and Family Services said the Bevin administration would cut those benefits in response to U.S. District Judge James Boasberg's ruling Friday invalidating the CMS' approval of Kentucky's Medicaid waiver establishing work requirements and imposing premiums on beneficiaries.

"Without prompt implementation of Kentucky Health, we will have no choice but to make significant benefit reductions," Health and Family Services Secretary Adam Meier said.

Under the Section 1115 five-year demonstration, which was scheduled to start July 1, beneficiaries could earn points in a My Rewards account that could be used to pay for dental and vision services beyond those covered under the regular Medicaid program. That might include restorative dental work and eyeglasses.

Beneficiaries would receive points in their rewards account by meeting Kentucky Health's requirement to complete 80 hours per month of employment or other community engagement activities and by participating in wellness activities such as filling out an online personal health questionnaire.

The ruling Friday blocked the establishment of the rewards accounts along with the rest of the waiver's provisions.

"So for people who may have accumulated points for additional services, those are not available," said Ann Marie Regan, senior staff attorney at the Kentucky Equal Justice Center, which was one of the three advocacy groups that brought the lawsuit challenging the waiver. "But the governor is not changing existing benefits, and we don't think he can."

Regan also questioned whether the Bevin administration could make any other Medicaid benefit cuts without going through the process of changing state regulation governing benefits and submitting a state plan amendment to the CMS for its approval.

While Bevin previously warned that he would end the state's Medicaid expansion if his waiver were challenged in court, Meier now says the administration will work with the CMS to "resolve the single issue raised by the court so that we can move forward with Kentucky Health."

But Regan said it's hard to see how the Kentucky demonstration could be made consistent with the judge's ruling, which the Trump administration is likely to appeal. Boasberg held that a work requirement leading to people losing coverage is not consistent with the primary objective of the Medicaid statute, which he said is to furnish medical assistance.

"I suppose they'll try to tweak the language so it sounds like people won't be cut off coverage," Regan said. "Or they could make it voluntary and provide services to folks to encourage work, which is what they say their goal is."