Misguided Medicaid Proposals Risk Jeopardizing Coverage

Medicaid was back in the news last week, in large part because of two proposals that would be significant steps backwards for the critical safety-net program that provides affordable health insurance to more than 70 million Americans. Both proposals—one at the national level from House Republicans and the other at the state level in Kentucky—are misguided and off the mark.

While the House Republican proposal announced by Speaker Paul Ryan on June 22 is packaged as providing “state flexibility,” it is really an effort to dramatically shift responsibility for future growth in health care costs to state budgets. This jeopardizes coverage for millions of Americans, places health care jobs at risk, and likely harms providers through reduced reimbursements. The proposal gives states the option of either a “per capita allotment” or a block grant. Both of these ideas are harmful to Medicaid enrollees who need health care to thrive in school, keep their job, or receive long-term care in their senior years. It would also put health coverage particularly at risk during a recession, as need for coverage would increase at a time when state budgets are tight.

One of the reasons why these proposals are ill-advised is that there’s no need for a radical refinancing of the program. Medicaid has always benefitted from an extremely low overhead compared to private health insurance. Medicaid costs have grown because more people have become eligible for coverage, and because the overall cost of health care – whether public or private – has increased. Moreover, recent studies point to job creation and budget savings for hospitals and safety-net providers in Medicaid expansion states.

Just as the House Republican proposal is misguided, Kentucky’s Medicaid waiver proposal is also troublesome. Since Medicaid was expanded in Kentucky, more than 500,000 Kentuckians have enrolled, providing them with access to affordable health care. The expansion was so successful that the uninsurance rate was cut in half in Kentucky in just a few short years. Success stories abound of Kentuckians who are able to receive preventive care, necessary specialty care, and prescriptions, many for the first times in their lives.

Unfortunately, a new administration in Kentucky wants to make changes to the Medicaid program that are likely to result in less affordable care and in some cases the elimination of coverage. Many of the changes Kentucky is proposing are modeled off of Indiana’s Medicaid expansion, which is still too early in its implementation to know whether it should be replicated. These proposals, which include increased cost-sharing through premiums, are roadblocks to becoming and staying covered. Kentucky should stay the course with its impressive coverage gains and celebrate its successes.

Another element of the Kentucky waiver – work requirements – is one of the most troubling components. According to the details released, all “able-bodied adults” would have to participate in employment or volunteer work for 20 hours per week. Similar requirements in other public assistance programs have led to tens of thousands of people losing benefits due to a lack of available job training and/or a scarcity of jobs in some communities—or even because their employers can’t provide 20 or more hours of work per week. Furthermore, the work requirements have restricted access among many people who are struggling to maintain employment due to mental illness or chronic health conditions, but who are not receiving disability benefits. Simply put, people need to be healthy in order to work. Denying health care to people who are unable to work, can’t get enough hours at their job, or live somewhere with no jobs, does nothing more than jeopardize their health and make future work that much more difficult. The federal Centers for Medicare and Medicaid Services (CMS) have consistently refused to allow work requirements in Medicaid, and they should reject the new proposal from Kentucky.

Medicaid expansion has been one of the true public policy successes of recent years. In 2013, the Census Bureau found that only 7.3 percent of children under age 18, or 5.4 million children, were uninsured, a reduction of over 2 million uninsured children since 2000. Then in 2014, as a result of the Affordable Care Act, adults’ health insurance coverage soared to historic levels, with the share of Americans lacking insurance coverage down to 10.4 percent in 2014 from 13.3 percent in 2013. Young adults and low-income workers particularly benefitted, with those ages 18 to 34 comprising over 40 percent of the 8.8 million newly insured Americans. The key next step is for the remaining 19 states to expand Medicaid, rather than jeopardize the gains that we have made.