In wake of Trump's election, Bevin administration says it will keep negotiating with Obama officials about Medicaid waiver request

Donald Trump and President Obama met Thursday.
(Photo: Michael Reynolds, European Pressphoto Agency)

By Al Cross
Kentucky Health News

The administration of Gov. Matt Bevin says it will continue negotiations with federal officials about its requested waiver of some Medicaid rules despite the election of Republican Donald Trump, who vowed in his campaign to "repeal Obamacare" but now says he will keep parts of it.

“Until changes occur at the federal level, the Bevin administration will continue to work within the confines of federal law as written,” said Doug Hogan, spokesman for the Kentucky Cabinet for Health and Family Services. “To that end, the Bevin administration will continue to negotiate in good faith with the U.S. Department of Health and Human Services."

It remains unclear what effect the election might have on HHS officials, who have often cited Kentucky as an Obamacare success story and might be motivated to preserve as much of it as possible. But the election may create a better negotiating position for the Republican governor, who has said he is ready to end his Democratic predecessor's expansion of Medicaid to about 440,000 people.

Bevin's waiver request asks for permission to require premiums to those with incomes below the poverty level and require work or training for able-bodied adults who aren't primary caregivers, both conditions that HHS Secretary Sylvia Burwell has said she would not approve.

Trump will take office Jan. 20. Hogan said that when things change at the federal level, "We will respond accordingly."

Bevin has said that the state cannot afford to have 1.32 million people, nearly 30 percent of its population, on Medicaid. His proposal says it "is expected to save taxpayers $2.2 billion over the five-year waiver period," by reducing enrollment in the program, but only $331 million of that would be state tax money, because the federal government covers the bulk of Medicaid costs.

The federal government is paying the full cost of the expanded Medicaid population through this year. Next year the state will be responsible for 5 percent, rising in annual steps to the federal health-reform law's limit of 10 percent in 2020. The state pays about 30 percent of the cost of traditional Medicaid participants.

Republicans have long proposed that Medicaid funding change to block grants, which would give the states certain amounts of money and more flexibility to write rules. That seems likely to be a part of any replacement of the 2010 Patient Protection and Affordable Care Act. But that will be a complicated task.

“It’s anybody’s guess what President Trump and a Republican Congress will do. Just repealing the Affordable Care Act is not a serious option unless they have something to replace it with,” former 6th District U.S. Rep. Ben Chandler, who voted against the law and now heads the Foundation for a Healthy Kentucky, told John Cheves of the Lexington Herald-Leader.

“The reality on the ground is that Gov. Bevin won his election in Kentucky and Donald Trump has now won his election nationally,” Chandler said. “It is incumbent on the rest of us to work with them in any way that we can to see that whatever they propose will hopefully make our people healthier. And I’ve got to believe that they want that same result.”

Trump reiterated Friday that he wants to keep the part of the law that prevents insurance companies for denying coverage because of pre-existing conditions. "But the insurance industry has long said it would have a hard time abiding by this rule unless virtually all Americans are required to have insurance," reports Amy Goldstein of The Washington Post.

Post business reporter and columnist Steven Pearlstein explains,  "To guarantee that people with pre-existing conditions can get affordable health insurance, you need to have rules requiring guaranteed issue and community rating," charging roughly the same prices in a geographical area. "To keep insurance companies in business because of guaranteed issue and community rating, you need to have an individual mandate" for everyone to buy insurance. "And because poor people can’t afford health insurance, you need subsidies. Combine all three, and what you have, in a nutshell, is ... Obamacare.

"Yes, it’s a bit more complicated than that, but not much. It’s possible to allow insurance companies charge twice or three times as much, to people who are older or sicker. You can let healthy people buy somewhat more bare-bones 'catastrophic' policies to satisfying their obligation under the individual mandate. You could even avoid community rating by sending sick people into 'high risk pools' where their premiums would be subsidized by a tax on everyone else’s health care premiums.

"But at the end of the day, once you decide that everyone, regardless of age or medical condition, should be able to buy health insurance at an affordable price, you have essentially bought into the idea that young and healthy people have an obligation to subsidize the older and sicker people in some fashion. And once you do that, it’s sort of inevitable you end up where every health reform plan has ended up since the days of Richard Nixon. You end up with some variation on Obamacare."