A federal watchdog agency has found that Kentucky expects to spend at least $271 million to launch Gov. Matt Bevin’s plan to overhaul Medicaid that includes requiring some adults to prove they are working.
Kentucky will spend nearly twice as much as four other states combined on administrative costs of enacting such changes, according to a report released Thursday by the Government Accountability Office.
The other four states the GAO examined — Indiana, Wisconsin, Arkansas and New Hampshire — will spend $137 million in total to enact similar programs, said the report by the nonpartisan agency that scrutinizes government spending.
The report identified “weakness” in oversight of the state projects by the Centers for Medicare and Medicaid Services, or CMS, which oversees state Medicaid programs funded largely by the federal government. It also found CMS failed to consider the costs of such state “demonstration” projects before approving them, the report said.
It said its findings raise questions about transparency, public accountability and whether such projects could drive Medicaid costs even higher.
“CMS has acknowledged that demonstrations, including those with work requirements, may increase Medicaid administrative costs and therefore, overall Medicaid spending,” the GAO report said.
Bevin, a Republican, took office in 2015 vowing to reshape Medicaid with work requirements and other changes he said would get people more engaged in their communities and become more responsible for their health.
Medicaid provides health coverage to about 1.3 million low-income and disabled Kentuckians, including about 600,000 children.
Jason Bailey, executive director of the Kentucky Center for Economic Policy, on Thursday questioned why Kentucky is pushing ahead with work requirements and other changes to Medicaid, given the costs outlined in the GAO report.
“Kentucky is a state that needs every dollar it can get its hands on to improve poor health,” said Bailey, whose progressive policy group has argued against Bevin’s changes. “Instead, as the GAO report clearly documents, we’ve been spending massive amounts of money to build a bureaucratic maze in which thousands of Kentuckians lose health coverage.”
Christina Mora Dettman, executive director of public affairs for Kentucky’s Cabinet for Health and Family Services, said the Bevin plan has cost savings that are not represented in the report.
The report “is poorly framed and represents the maximum funding approved for implementation of the waiver, rather than the amount spent, which is significantly lower,” she said. “Kentucky’s share of those costs is covered through savings from shutting down the duplicative and expensive Kynect system.”
She said the administration’s investment in user-friendly technology “is expected to save $2.4 billion over time.”
The report came as lawyers for Bevin and Arkansas appeared before a federal appeals court panel Friday in Washington, D.C., to try to persuade the court to allow the two states to proceed with Medicaid changes that have been blocked by a a lower court judge.
Kentucky became the first state in the nation to win approval for Medicaid work requirements from the Trump administration but 16 more states including Arkansas have won approval or have pending requests for similar changes to their Medicaid programs.
In March, U.S. District Judge James E. Boasberg struck down the plans of Kentucky and Arkansas, finding the states had failed to prove the changes, including work requirements, would advance a central goal of Medicaid — to ensure health coverage to the country’s most vulnerable citizens.
More recently, Boasberg struck down a New Hampshire plan for Medicaid work requirements that the Trump administration had approved. Another lawsuit challenging Indiana’s Medicaid work requirements was filed recently in federal court in Washington.
It’s part of the ongoing battle over whether states can require low-income adults, mostly those added to Medicaid through an expansion under the Affordable Care Act, to report work or volunteer hours, pay premiums or meet other new rules.
Bevin and other supporters of such changes, largely in Republican-led states, have argued the changes will lead to more participation in the workforce and make people healthier. Critics argue there is no evidence to support such claims and the changes instead will cause thousands of people who can’t meet or don’t understand the requirements to lose health coverage and experience worse health as a result.
The GAO report didn’t address those claims but focused on the administrative costs of overhauling state Medicaid plans to include new rules for “community engagement” that require most “able-bodied” adults to report that they are working, volunteering or performing other services at least 20 hours a week.
Kentucky, it found, expected to spend about $220 million on technology costs to upgrade and create a computer system to track individuals affected by the changes. It plans to spend another $50 million in payments to outside managed care health insurance companies that oversee most of Kentucky’s Medicaid enrollees and would help enact the changes.
Bailey said he doesn’t understand why Kentucky would rather hand millions of dollars to private contractors “instead of using those funds to actually make people healthier.”
The GAO report recommends CMS require states to submit and make public projections of administrative costs for such Medicaid projects and that CMS consider those costs in any assessments of the benefit of such projects. It also recommends that CMS improve oversight of such state projects because the federal government bears the majority of the costs.
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Written by Deborah Yetter. Cross-posted from the
Courier-Journal via the Kentucky Press News Service.