The possibility that Kentucky could pull the plug on Medicaid expansion is reiterated in a recent court filing by the state.
The state is a defendant in a case that challenges the November 2018 reapproval of Kentucky HEALTH by the Trump administration filed in U.S. District Court in Washington, D.C.
In its filing seeking summary judgment, the state highlights the fact that Gov. Matt Bevin issued an executive order last year saying the state would terminate Medicaid expansion if a court blocked one or more components of the Kentucky HEALTH program.
“With Kentucky HEALTH, Kentucky can afford to continue providing expanded Medicaid, plus the enhanced benefits that are part of Kentucky HEALTH,” the state says in a memo filed last week.
“Without Kentucky HEALTH, the Governor’s executive order will take effect. Surely keeping expanded Medicaid in the form approved in Kentucky HEALTH is more likely to assist in advancing the objectives of Medicaid in Kentucky than not having any form of expanded Medicaid at all.”
That’s just one of the arguments put forth by the state in the lawsuit, which takes place as Kentucky prepares to implement Kentucky HEALTH later this year.
Numerous health scholars and national groups, such as the American Medical Association, AARP and the National Alliance on Mental Illness, have filed briefs in support of the Medicaid beneficiaries making the legal challenge.
The federal defendants, who include U.S. Health and Human Services Secretary Alex Azar, have filed for a dismissal of the case, or for summary judgment in their favor.
The case was brought by more than a dozen Medicaid beneficiaries, who say Kentucky HEALTH will harm some of the state’s most vulnerable citizens, namely adults who gained coverage through Medicaid expansion, and that the Trump administration’s approval of the program constitutes an abuse of authority.
In court documents filed last week, the federal government argues that Azar made a rational decision, while acting within the authority given to him by Congress, with the idea that Kentucky HEALTH would help beneficiaries achieve financial assistance through community engagement, reduce dependency on public assistance, incentivize healthy behaviors and allow the state to stretch its finite resources.
“Kentucky HEALTH furthers the Medicaid statute’s objective to furnish medical assistance because it allows Kentucky to experiment with ways to stretch limited Medicaid resources and thereby maximize coverage for its citizens through the broader KY HEALTH project,” the federal government says in its memo.
Kentucky HEALTH would impose requirements, such as paying premiums and putting in 80 hours a month of work or “community engagement,” on certain beneficiaries, who would have to report their activities to the state.
Though the program is officially set to kick off April 1, with premiums being waived during the first month, phasing in of the community engagement requirement won’t begin until July, the state recently announced.
The program was to start last year but got sidelined when U.S. District Judge James Boasberg ruled that the Trump administration’s initial approval of the program was arbitrary and capricious and that Azar had “never adequately considered whether Kentucky HEALTH would, in fact, help the state furnish medical assistance to its citizens, a central objective of Medicaid.”
Kentucky HEALTH is a Section 1115 demonstration project, which occurs when the U.S. Health and Human Services secretary waives certain provisions of Medicaid law to give states more flexibility to design and potentially improve their programs.
In the court case, the state argues that Kentucky is ideally situated to test out the most contentious feature: the work or community engagement program. The state refers back to Gov. Bevin’s original request for the waiver, which mentioned several of state’s societal woes, including the drug epidemic, many residents living in poverty, poor workforce participation and nearly a third of Kentuckians being on Medicaid.
“These troubling statistics make Kentucky a particularly good fit for testing a community-engagement program,” the state argues in its recent filing. “At a minimum, it is a reasonable construction of Section 1115 and a valid exercise of the Secretary’s judgment to conclude that this is so.”
More than 18,000 people reportedly have lost their Medicaid coverage as a result of a similar work requirement in Arkansas, but the state dismisses the relevance of that in the court filing.
“One demonstration project cannot be discredited by two months’ worth of data from any entirely separate demonstration project,” the state says. “To suggest otherwise makes a mockery of the empirical process. Regardless, there is no indication that Arkansas’ waiver contains safeguards comparable to the ‘guardrails’ contained in Kentucky HEALTH.”
For example, the state notes that it has built in some ways for beneficiaries to regain their coverage or to show good cause for noncompliance. Also, the U.S. Centers for Medicare and Medicaid Services can take action if unexpected coverage losses occur in significant numbers.
In the past, Kentucky has estimated that Kentucky HEALTH could lead to 95,000 Kentuckians losing their Medicaid coverage in the first five years.
However, the federal government says in its filing that the estimate is the result of a flawed interpretation of a study and downplays its relevance, noting that Azar concluded that figure would likely be “dwarfed by the 454,000 newly eligible adults who stand to lose coverage if Kentucky elects to terminate the non-mandatory ACA expansion.”
In the case, Kentucky also quibbles with the coverage loss estimate of 95,000 and says that any coverage losses must be considered in conjunction with “enhanced coverage.”
“Under Kentucky HEALTH, Kentucky offers beneficiaries services that are optional under the Medicaid Act—namely, dental and vision benefits and coverage for over-the-counter prescriptions,” the state says. “Not only that, but the Commonwealth even offers benefits that are not normally covered through Medicaid … like certain fitness-related benefits and SUD (substance-use disorder) coverage.”