Bill to reform public-assistance programs, including Medicaid, is approved by a committee and the House in the same day

By Melissa Patrick

Kentucky Health News

Legislation aimed at tightening Kentucky's rules for public-assistance programs passed out of committee and the full House just hours later on Thursday, with strong opposition from advocates and many Democrats and cries of "fear-mongering" from the prime sponsor. 

House Speaker David Osborne and Speaker Pro Tem David
Meade presented House Bill 7 in committee. (LRC photo)

“The only way that you would lose benefits in this bill is that you were either doing something that is illegal, or you are an able-bodied adult with no dependents that is not willing to participate in the work programs," House Speaker Pro Tem David Meade of Stanford said multiple times on the floor while presenting the bill.

Meade and other supporters of House Bill 7 said it aims to ensure that Kentuckians who are receiving safety-net services such as health and food assistance qualify for them, and to move more able-bodied Kentuckians into jobs, especially as extensions provided because of the pandemic phase out. 

A similar bill passed the House in 2020, but stalled in the Senate. Like last time, this bill is sponsored by Meade and  House Speaker David Osborne of Prospect. Rep. Melinda Gibbons Prunty of Belton in Muhlenberg County recently added her co-sponsorship to this bill. All are Republicans. 

The 27-page bill moved to the Senate on a 71-26 vote. Norma Kirk-McCormick, R-Inez, was the only Republican voting against the measure. 

The bill would require the Cabinet for Health and Family Services to apply for a federal waiver so Kentucky could require able-bodied adults without dependents to participate in at least 80 hours a month of qualifying "community engagement" activities to get Medicaid coverage if they have been enrolled in the program for more than 12 months.

"At this point, there's not a chance really that the Biden administration is going to approve" the application, said Dustin Pugel, senior policy analyst at the left-leaning Kentucky Center for Economic Policy. "There's Supreme Court precedent now against it. But that says nothing about what perhaps a future administration or future Supreme Court might decide." 

Anticipating rejection of the application, the bill would require the state to keep applying annually.

KCEP estimates nearly 200,000 people could lose Medicaid coverage, and tens of thousands of Kentuckians could lose Supplemental Nutrition Assistance Program (SNAP) benefits should HB7 pass.

 "If 200,000 Kentuckians lose Medicaid coverage because of HB7, fewer people will be able to go to the doctor for care. That could result in lost jobs at provider offices and more patients seeking uncompensated care in high-cost emergency departments," the Foundation for a Healthy Kentucky said in a statement opposing the bill.

"For the reasons outlined above, the foundation opposes HB7 as it is currently written and we urge legislators to oppose any new policies that would prevent Kentuckians from accessing care and food assistance," said the foundation.

HB 7 would also establish a Benefits Cliff Task Force to find ways to bridge the "benefits cliff" that results when a small change in income can cause a big loss of benefits. There is also language directing work on child-care assistance programs for people as their incomes increase above the current limits.

"The goal is to get those folks who are able-bodied adults with no dependents back out into the workforce and to assist them in that when we develop the bridge insurance program and the child-care assistance programs as well," said Meade. 

Rep. Lisa Willner, D-Louisville, told the House that she worries that the consequences of the bill will be different than the stated intentions and will result in people getting kicked off their benefits.

At the earlier Health and Family Services Committee meeting, Health Secretary Eric Friedlander estimated that the original bill would probably require the health cabinet to double its current workforce and would cost tens of millions of dollars to simply be able to answer the phones.

"I just think we have the potential for a real disaster situation," Friedlander said.

On the floor, Meade called this estimate "puzzling" because they had removed the most costly part of the bill and some of the work required of the cabinet would also be required by the federal government. He said that the rest of the bill is the same as the 2020 bill, which carried a cost estimate of $20 million, with $15 million of that to be funded by the federal government. 

Asked in committee what problems the bill is trying to solve, Meade said his goal is to reduce the number of ineligible people who are on Medicaid; to put both Medicaid and SNAP benefits on the same EBT card to eliminate any possibility of selling them; and to create a task force to develop a "bridge program" for people who make too much money for Medicaid, but not enough to purchase insurance and to work on the child-care gap to help people work.

Asked on the floor how many people are on the Medicaid rolls who shouldn't be, Meade said discussions with researchers at the University of Kentucky suggest that it could be upwards of 200,000 of the 1.6 million Kentuckians on Medicaid. 

Rep. Kim Moser of Taylor Mill, chair of the health committee, said "We're really trying to streamline and make sure that this is creating efficiencies and not creating barriers." 

Rep. Tom Burch, D-Louisville, scoffed at that: "It is not a bill to streamline our system. It's an evil bill. It's a bill that's going to hurt people."

In support of the bill in committee, Rep. Ryan Dotson, R-Winchester, said, "I think this commonwealth is long overdue with welfare reform and purging those out of the system that really don't need to be there. . . . I do believe this is a good first step." 

Speaking against the bill in committee, several advocates painted a picture of the challenges faced by people on public assistance. 

"I'm here to ask that we don't punish Kentucky's hardworking people who are in transition or trouble," said Mike Wynn of Grace Health in Eastern Kentucky. "Don't punish them for the few bad actors that abuse the system." Wynn said he had been a Kynector for seven years, helping people get health coverage. 

"This bill would make a very complex process even harder and nearly impossible for some," said Celine Mutuyemariya, a community policy strategist with the Louisville Urban League. "I urge the members of this committee to think about the very real consequences of this bill." She added that she has worked as a community health worker and Kynector in the past. 

Christina Libby, a certified community health worker and Kynector with the Homeless and Housing Coalition of Kentucky, said it's important to dispel the myth that everyone who is eligible for benefits are getting them or can get them easily. Further, she said it is an "unnecessarily complicated" process. 

"Getting help is already hard, very hard," she said. "It's a demoralizing and discouraging process." 

Kentucky Voices for Health provided lawmakers with a letter signed by 60 organizations and 64 constituents across the state stating their concerns about the bill.

Here are some key provisions related in HB 7 related to Medicaid: 

• After the federal government lifts the pandemic-era limit of the state's ability to disenroll individuals from Medicaid, the health cabinet would have 12 months to do a full audit of Medicaid rolls. 
• Medicaid coverage for treatment of substance-use disorder in prisoners, included in the 2020 budget, would be put into law. 
• The cabinet could not accept self-attestation of income, residency, age, household composition, caretaker or relative status or coverage for the purpose of determining Medicaid eligibility, except for residents of assisted-living and long-term care facilities. 
• The cabinet would have to use only the most recent income verification data available when determining eligibility.
• The cabinet could not make presumptive eligibility determinations, to approve someone for Medicaid before their qualifying paperwork is completed. 
• New rules would be established for for presumptive eligibility determinations by hospitals. 
• The attorney general, currently Republican Daniel Cameron, could bring action against the cabinet if he thinks provisions of the bill are not appropriately implemented.