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Matt Bevin wants to implement a customized waiver system that will see more residents paying for their health insurance and “better outcomes.”
Kentucky Gov. Matt Bevin expects his administration will know by mid-2016 if it can create a customized Medicaid waiver system to take effect the following year.
Bevin, speaking at a Wednesday morning press conference at the state Capitol in Frankfort, accused the administration of former Gov. Steve Beshear of lying about Kentucky’s Medicaid expansion paying for itself—citing a $128 million Medicaid shortfall this fiscal year.
Arguing the cost of the current system is unstainable with close to 30 percent or 1.3 million Kentuckians on Medicaid, Bevin wants to eliminate the state’s health insurance exchange, Kynect, and implement some combination of federal waivers available.
“It will be cutting edge; it will be transformative,” Bevin said. “I truly believe that, by the middle of next year, we will have an opportunity to know whether this will work or not.”
Earlier this month, a Kaiser Family Foundation survey found 72 percent of Kentuckians support preserving the current Medicaid program and 52 percent keeping the state exchange.
Popularity aside, more than 400,000 residents enrolled in Medicaid post-expansion—open to anyone making up to 138 percent of the federal poverty line. Kentucky saw the biggest drop in uninsured residents of any state between 2013 and 2014.
Bevin dismissed concerns about their coverage under a waiver system as “smokescreens” thrown by the previous administration to mask the fact the current program is “imploding financially.” But he conceded whatever solution his team comes up with, if any, can’t take effect until 2017, so no freeze in enrollments next year.
And if a plan isn’t clear by mid-2016?
“We continue to move forward under the structure that we currently have,” Bevin said.
Throughout the press conference, Indiana was repeatedly referenced as a potential model because of its use of federal 1115 waivers, Social Security Act grants funding pilot Medicaid projects—typically on a five-year, renewable basis.
Getting a system in place by January 2017 would also give Kentucky access to Section 1332 waivers under the Affordable Care Act, which are innovation grants letting state governments modify coverage so long as it remains affordable, accessible and doesn’t add to the federal deficit.
“The 1332, that’s the latest and greatest model,” Mark Birdwhistell, University of Kentucky HealthCare’s vice president of external affairs and administration, said during the press conference. “We’re still trying to figure out what that does.”
Birdwhistell, a former state Cabinet secretary, is acting as a consultant and said the governor’s team is “enticed” by the 1332 waivers. They could prove just what Bevin needs to charge enrollees premiums, change eligibility and employ cost-sharing, which he hopes will “make people as independent as possible” and maybe even “buy their own health insurance policy.”
Bevin intends to submit a new Medicaid solution to the Centers for Medicare and Medicaid Services (CMS) to obtain the waivers, but the federal government might not play ball if he dismantles the first functioning ACA state exchange—paid for with about $280 million in federal funds. That’s especially true because eliminating Kynect would take nine months and $23 million and, as the Courier-Journal reported, the state made $3 billion since 2014 off of Medicaid expansion, according to the Beshear administration.
Bevin said he’s spoken with U.S. Health and Human Services Secretary Sylvia Burwell and dialogue is beginning with CMS “in good faith.”
Waivers won’t change the fact the cost of any Medicaid program will be high, but Kentucky can’t afford the traditional approach, Bevin said.
Even if a cost-effective waiver system is developed, there’s no guarantee the state legislature will go along.
Bevin denied promising he’d completely scale back Medicaid expansion and end Kynect on the campaign trail.
“I have confidence that we can come up with a solution,” Bevin said. “I’m as confident, but as unable to predict with certainty, as I have ever been.”
Dave Nyczepir is a News Editor at Government Executive’s Route Fifty.