Wednesday, February 14, 2018

Startup costs of work rules for Medicaid program mean it won't save money for the first two years, state officials say

Gov. Matt Bevin's administration plans to spend $374 million over the next two years, most of it federal money, to implement changes in the Medicaid program for which Bevin won federal approval last month, reports Deborah Yetter of the Courier Journal.

"It has added $186 million to the current budget and proposes $187 million in the next budget year starting July 1 for administrative costs, most of the money associated with the Medicaid changes," Yetter reports. Part of the administrative costs added to this year's budget would go toward creating a Medicaid computer system required by the federal government."

"Much of the money will go to adding technology to track compliance with new rules that require some people on Medicaid to work, train for jobs or volunteer at least 20 hours a week and pay monthly premiums," Yetter adds. "Those changes are expected to affect fewer than 200,000 people out of the 1.4 million Kentuckians enrolled in the federal-state health plan. Critics of the plan argue that's a lot of money for a plan aimed at a small fraction of the Medicaid population."

In his campaign and early in his term, the Republican governor said the expansion of Medicaid by his predecessor, Democrat Steve Beshear, was not sustainable and the program needed to be changed to save money. Now he and his lieutenants say the changes aren't intended to save money, but to steer people into jobs that include health insurance.

Tim Feeley, deputy secretary of the Cabinet for Health and Family Services, told a legislative panel recently, "The goal here is to get people working and off Medicaid and into private insurance, to improve their health and give them the satisfaction of working." Yetter notes, "Advocates argue the majority of those in Kentucky affected by the changes already work at low-wage or part-time jobs with no health coverage."

Medicaid Commissioner Stephen Miller told a budget subcommittee last week that the changed won't save any money in the two-year budget that begins July 1, but in the following three years -- the extent of the federal approval -- the savings will total $2.1 billion in federal funds and $300 million in state money, Yetter reports.

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