Gov. Matt Bevin's plan to impose work requirements and premiums on many Kentucky Medicaid recipients evaporated Tuesday night as Democrat Andy Beshear declared victory in the race for governor.
When he takes office Dec. 10, Beshear pledged to quickly reverse the Republican governor's proposed changes to Kentucky's Medicaid program, which were expected to end health coverage for an estimated 95,000 people over the first five years.
Bevin's long-planned Kentucky HEALTH initiative never got to take effect, although he did briefly end dental and vision benefits last year for several hundred thousand expanded Medicaid recipients before restoring them, following a public backlash.
A federal appeals court in Washington is now considering the second legal challenge to Kentucky HEALTH in as many years.
President Donald Trump's administration approved a waiver so Bevin could restructure the state's $9.7 billion-a-year Medicaid program to add strict eligibility rules for able-bodied, working-age adults. But lawsuits filed by Medicaid recipients kept the initiative tied up in court. A federal district judge in Washington twice struck it down as "arbitrary and capricious," ruling that it would interfere with the central purpose of Medicaid: providing health care.
With a change in governors, Kentucky seems ready to drop Kentucky HEALTH and end the legal battle.
"In my first week in office, I am gonna rescind this governor's Medicaid waiver," Beshear said to cheers and applause in his victory speech Tuesday night. "Health care is a basic human right and my administration will treat it as such."
It's not immediately clear what impact Beshear's decision would have on the pending decision at the U.S. Court of Appeals for the District of Columbia, since Kentucky's Medicaid challenge is linked there to a similar case from the state of Arkansas.
But from a policy perspective, the reversal is welcome news to those opposing Bevin's Medicaid changes.
"Beshear's election is a huge relief for us and for our clients and for the hundreds of thousands of people who get their health care through Kentucky's Medicaid program," said Ben Carter, an attorney with the Kentucky Equal Justice Center, which represents those suing to block Kentucky HEALTH.
There are 1.2 million low-income people insured through Kentucky's Medicaid program, which is paid for by the federal and state governments.
Beshear's father, former Democratic Gov. Steve Beshear, expanded Medicaid to add roughly 400,000 adults in 2014 as allowed by the federal Affordable Care Act. Many are employed at low-wage jobs that don't offer health insurance. Following Steve Beshear's Medicaid expansion, the number of Kentuckians without health insurance plunged from 14.3 percent in 2013 to 5.4 percent in 2017.
"It is very rare in public policy to find something like Medicaid expansion that has been such an unalloyed good for everyone -- for the patients who in some cases would have died without it, for the medical providers and for a lot of rural hospitals that otherwise might have to close without the money coming in from Medicaid," Carter said.
Bevin, who succeeded Beshear in 2015, called for changes to require able-bodied adults between the ages 19 and 64 to complete at least 80 hours a month of "community engagement" in order to keep their Medicaid coverage. That could mean a job, school, vocational courses or community service.
"There is dignity associated with earning the value of something that you receive," Bevin told reporters. "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."
Bevin also wanted to impose monthly premiums; reporting requirements to keep the state updated on recipients' current work and pay information; and lockout periods denying coverage to people who failed to follow the rules.
Critics said tens of thousands of Kentuckians who already work likely would lose their Medicaid coverage because the mandatory reporting requirements would prove confusing and burdensome. They pointed to other states, such as Arkansas, where thousands of people were locked out of their coverage because they did not promptly respond to mailers or missed a reporting deadline.
"When you charge a premium, some people can't pay it, so off they go. When you make people file a report every month, some people aren't going to make the deadline, so off they go," one of the Medicaid recipients suing to block Kentucky HEALTH, Ronnie Stewart of Lexington, told the Herald-Leader last year. "It's all about putting up roadblocks."
Bevin's Kentucky HEALTH initiative wasn't cheap.
Kentucky expected to pay $272 million in fiscal years 2019 and 2020 on information technology and administrative costs to impose the strict eligibility rules, roughly twice the combined expense of four other states overhauling their own Medicaid programs, according to a report issued last month by the U.S. Government Accountability Office.
That sum did not include the nearly $100 million that the Bevin administration spent on Kentucky HEALTH from 2016 to 2018, according to the GAO report.