News Law and Policy

Kentucky Governor Backtracks on Pledge to End Medicaid Expansion

Teddy Wilson

Republican Gov. Matt Bevin said last week that he would not eliminate the state’s expansion of Medicaid and the kynect health-care exchange.

Kentucky’s new Republican Gov. Matt Bevin had promised to dismantle the state’s effort to implement the Affordable Care Act (ACA), and his defeat of Democratic Attorney General Jack Conway in November appeared to be a death knell for low-income residents’ health-care coverage.

However, Bevin said last week that he would not eliminate the state’s expansion of Medicaid and the kynect health-care exchange, but rather reform how the state has implemented the programs.

Bevin repeatedly said during the 2015 campaign that he would eliminate Medicaid expansion in the state. Bevin proposed transitioning residents on Medicaid through kynect to the federal health insurance exchange by 2017, when the ACA’s federal health-care subsidies are reduced.

“Absolutely. No question about it. I would reverse that immediately,” Bevin told reporters during a February 2015 press conference, according to the Associated Press. “The fact that we have one out of four people in this state on Medicaid is unsustainable, it’s unaffordable and we need to create jobs in this state, not more government programs to cover people.”

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Bevin changed course and announced his plans for reforming the Medicaid expansion program during a December 30 press conference. “We are going to transform the way in which Medicaid is delivered in Kentucky, and this transformation, I think, will be a model for the nation,” Bevin said.

The details of Bevin’s plan will be hammered out over the next six months, after which people “will have a very clear understanding of whether this is going to work or no.” The governor said that the new system could be implemented by the beginning of 2017.

The Kentucky program has been widely praised as a success, and it has been credited with reducing the uninsured rate in the state from 20.4 percent in 2013 to 11.9 percent in mid-year 2014. Kentucky’s 8.5 percent drop in the uninsured rate over the past two years is higher than any other state with the exception of Arkansas.

Bevin was joined in December by Vickie Glisson, the secretary of the Cabinet for Health and Family Services, and Mark Birdwhistell, the former secretary of the Cabinet for Health and Family Services.

Birdwhistell said during the press conference that low-income residents needed a Medicaid system that was “affordable and sustainable,” and that other states have created programs that could be an example for the plan that may be proposed.

“We’ve looked at other models in other states,” Birdwhistell said. “One of the things we keep talking about is the Indiana model. My personal preference is that we need a Kentucky model: a model that meets the needs of Kentucky.”

Indiana Gov. Mike Pence announced in January 2015 that the state will expand Medicaid under the ACA, becoming one of many GOP governors to cede to some form of Medicaid expansion after opposing Obamacare since its passage through Congress. The expansion will cover 350,000 low-income Indiana residents, or about 46 percent of the state’s 765,600 uninsured residents.

Bevin said that the need to reform the Kentucky program was mostly about its cost.

“It comes down to several things,” Bevin said. “Cost is primary among them. Ultimately it does not matter what the solution is. If there is not a way to pay for it then it would not be an option for the long term.”

The federal government pays 100 percent of the cost of expanding Medicaid in the state, and beginning in 2017, federal funding will decrease to 90 percent. A 2013 analysis by the state health department projected that Kentucky’s expansion of Medicaid would create a $15.6 billion positive economic impact, as well as nearly 17,000 jobs across the state.

Bevin claimed in December that full Medicaid expansion under the ACA was unaffordable “despite all the happy talk that came out of the previous administration.”

Bevin’s proposal to reform Medicaid expansion due to the cost of the program was announced a week before the governor released a budget proposal that would slash the state’s revenue. Bevin has proposed eliminating the state’s inventory and inheritance taxes, which would cost the state an estimated $55 million per year, according to reporting by McClatchy.

Bevin dismissed a reporter’s question to respond to the concerns of the thousands of state residents who may lose their health insurance under the governor’s proposal. “I really hope you’ve been listening to what I’ve just said, and I’m not sure that you have in light of that question,” he said.  

Whatever plan Bevin proposes will need the approval of the federal government. The Centers for Medicare and Medicaid Services (CMS) must approve waivers from states seeking to implement plans that differ from full Medicaid expansion under the ACA.

“I had a very extensive and substantive conversation with Health and Human Services Secretary Sylvia Burwell,” Bevin said. “She and I had a good conversation about what solutions would look like for Kentucky. It is our intention to work with CMS as we have said we would.”  

CMS officials approved a waiver allowing Indiana to implement its plan after months of negotiations between Pence and the Obama administration.

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