Saturday, January 20, 2018

Kentucky's new Medicaid program will have administrative hurdles that are likely to cost some their health coverage

Critics of the Trump administration's decision to add work requirements to Kentucky's Medicaid program cite research to support their concerns that this requirement will cause fewer people to enroll in the program.

Margot Sanger-Katz of The New York Times compiled a list of examples, writing that there is "a lot of research available about the Medicaid program, specifically, that shows that sign-ups fall when states make their program more complicated."

One of several examples that she shares is from 2003, when the state of Washington tried to reduce Medicaid spending by requiring beneficiaries to prove eligibility twice a year, instead of just once, and added some paperwork. One result: 40,000 fewer children in the health insurance program in just one year. The policy was reversed two years later.

Conversely, Sanger-Katz writes that in the early 2000s, Louisiana wanted to increase the number of children in the state health insurance program, so it simplified the sign-up process, resulting in a "surge of enrollment" and "the number of administrative cancellations fell by 20 percentage points."

Another example, which Sanger-Katz doesn't mention, comes form Indiana, the model for Kentucky's program. There, when small, income-based premiums were required, 55 percent of the affected enrollees either never made a first payment or missed a payment while enrolled.

Donald Moynihan, a public-affairs professor at the University of Wisconsin, who is writing a book on the effects of administrative burdens, told Sanger-Katz that it is well documented that complex programs make non-compliance more likely, especially for those who aren't well organized.

"Anyone who has ever forgotten to pay a bill on time, or struggled to assemble all the necessary forms of identification before heading to the DMV, is likely to sympathize with how administrative hurdles can stymie someone," Sanger-Katz writes. "But these may be especially daunting for the poor, who tend to have less stable work schedules and less access to resources that can simplify compliance: reliable transportation, a bank account, internet access."

Kentucky's new Medicaid program creates several "administrative hurdles," and nine other states have asked to make similar program changes, Sanger-Katz reports.

The Kentucky plan requires "able-bodied" Kentuckians on the program to work at a job or participate in an approved list of "community engagement" activities at least 80 hours a month, and to document their participation.

It requires enrollees to pay small, income-based premiums monthly; to report any changes in their income within 10 days of the change; and to renew their coverage promptly at the end of the year.
Failure to meet these requirements very quickly results in a six-month lock-out, invoking more rules.

For example, those below the federal poverty level who don't pay premiums will be required to make co-payments. Those above the poverty level will be allowed to re-enroll if they pay their past-due premiums and take a financial- or health- literacy course.

Gov. Matt Bevin and his lieutenants argue that the changes will give beneficiaries more "dignity and respect" and promote personal responsibility. But they also estimate that the changes will leave the program with almost 100,000 fewer enrollees after five years than without the changes, partly because of "non-compliance."

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