Kentucky is first to get OK for Medicaid work requirement

Kentucky has become the first state to require many of its Medicaid recipients to work to receive coverage, part of an unprecedented change to the nation's largest health insurance program under the Trump administration.

The Centers for Medicare and Medicaid Services announced the approval on Friday. The change will require adults between the ages of 19 and 64 to complete 80 hours per month of "community engagement" to keep their coverage. That includes getting a job, going to school, taking a job training course or community service.

It's a big change for Kentucky, a state that just four years ago embraced former President Barack Obama's health care law under a previous Democratic governor who won praise for posting some of the largest insurance coverage gains in the country.

But Republican Gov. Matt Bevin said while more Kentuckians have insurance, it is not making them healthier.

Kentucky, along with the rest of Appalachia, still falls behind the rest of the country in 33 out of 41 population health indicators, according to a recent study. Bevin said he believes his program, with its emphasis on work and community service, will encourage people to be healthier.

"There is dignity associated with earning the value of something that you receive," Bevin said. "The vast majority of men and women, able-bodied men and women ... they want the dignity associated with being able to earn and have engagement."

In its application to Washington, Bevin's office said it expected the changes to save taxpayers more than $300 million over the next five years. They said the new rules will apply to about 350,000 Kentuckians, about half of whom already have jobs. They estimated as many as 95,000 people could lose their Medicaid benefits, either because they did not comply with the new rules or they lose their eligibility when they get jobs that pay too much money.

Democratic U.S. Rep. John Yarmuth, who represents Louisville, called the plan "dangerous and irresponsible."

"Thousands of Kentucky families will face financial ruin," he said.

But there are many exemptions for the work requirements. The work requirements will not apply to pregnant women, full-time students, former foster care youth, primary caregivers of children and the elderly and full-time students.

The work requirements -- which start in July and will last five years -- also do not apply to anyone designated "medically frail," a broad term that includes people suffering from alcohol or drug addiction in a state that has been among the hardest hit by the opioid crisis.

"Why should an able-bodied working-age man or woman with no dependents not be expected to do something in exchange for that which they are being provided?" Bevin said. "I'm not worried about it at all."

Bree Pearsall is worried. She and her husband, Ben Abell, are full-time farmers of about 200 acres just south of Louisville. Pearsall said they depend on Medicaid to cover their family, which includes a 2-year-old and a new baby expected next month.

Under the new program, Pearsall and her husband would have to let state officials know each time their wages change. If they don't, they could lose their insurance for up to six months as a penalty. Since the couple is self-employed, they don't have a regular paycheck, and their income changes dramatically throughout the year.

"I see those being very big obstacles to maintaining consistent coverage," she said. "I'm definitely anxious about it."

The changes also require people to pay up to $15 a month for their insurance. Basic dental and vision coverage is eliminated, but people can earn those benefits back through a rewards program. That includes doing things like getting an annual physical, completing a diabetes or weight management course or participating in an anti-smoking program.

Advocates for the poor have said work requirements will become one more hoop for low-income people to jump through, and many could be denied needed coverage because of technicalities and challenging new paperwork. Lawsuits are expected as individual states roll out work requirements.

Calling the Trump administration's waivers "unprecedented," two senior congressional Democrats who work on Medicaid issues asked the nonpartisan Government Accountability Office to review the government's decision-making process.

"It is critical that key decisions regarding eligibility, coverage, benefits, delivery system reforms, federal Medicaid spending, and other important aspects of these demonstrations are transparent, accountable, and in line with congressional intent," wrote Rep. Frank Pallone of New Jersey and Sen. Ron Wyden of Oregon.

Senate Majority Leader Mitch McConnell praised the changes, calling it "common-sense steps to engage patients, improve health, and reduce the burden on Kentucky taxpayers."