Kentucky Medicaid History and Facts

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Initial Medicaid Implementation: Prior to the passage of Medicaid, Kentucky participated in the MAA program (Kerr-Mills). The state set up a vendor payment plan that included 6 days of hospital coverage. After the 6th day the state expected that either the patient or charity would pay or the hospital would discharge the patient. Kentucky originally implemented the Commonwealth’s Medicaid program in July 1966. The state’s initial Medicaid program was more generous than other states. In the early years of the program it was estimated that 10% of the population of Kentucky received Medicaid services. Following a change in the Medicaid law in 1967 that reduced payments to states for people eligible over 150% of the state’s AFDC levels, Kentucky reduced eligibility in the Medicaid program. Other early challenges to the Medicaid program included a dispute between specialists and general practitioners over a difference in fees. Several physicians in the early years of the program received outsized amount of payment through the Medicaid program leading to federal regulators increasing the oversight of the program. These allegations were later confirmed with the federal government finding that solo practitioners made nearly $120,000 in 1968.

Key Medicaid Political Issues: The state implemented a new set of changes to the state’s CHIP program in 2008. The reforms simplified the application process and increased awareness about the CHIP program in an effort to increase enrollment. Despite these efforts the state faces challenges providing access to dental care services because there are many parts of the state that do not have dentists that take CHIP. 

Medicaid Expansion Implementation: Kentucky expanded Medicaid through an executive action by then Governor Steve Beshear. The plan was considered successful not only because the state instituted their own exchange and the state’s Medicaid program was able to process transactions between the exchange and the Medicaid agency but also because the state had previously covered very few adults through their Medicaid program so the expansion of Medicaid saw a large increase in coverage in the state. There was evidence that the state saw an increase in the number of physicians and other providers that accept Medicaid following the expansion of Medicaid, a decrease in the rate of uninsurance, and an increase in the financial security of low-income residents. Governor Bevin was elected in 2015 on the promise that he would end the state’s Marketplace and Medicaid expansion. He ended the Kynect Marketplace but has yet to end the Medicaid expansion. Instead he applied for a waiver in 2017 that would require beneficiaries to work in order to maintain their Medicaid coverage. The Trump Administration approved Kentucky’s proposal in January of 2017. A lawsuit was brought against the state to the District Court in DC and in July the court ruled that the approval of the work requirement waiver violated federal law. The state stopped the implementation of the waiver pending an appeal by the state. There are several other provisions of the waiver, some of which were allowed to take effect, others of which were struck down including the elimination of retroactive eligibility, some non-emergent transportation benefits and increased premiums and copayments for beneficiaries.

General facts about Kentucky Medicaid:

Medicaid program name: Medicaid

CHIP Program name: KCHIP (Kentucky Children’s Health Insurance Program)

Separate or combined CHIP: Combination

Medicaid Enrollment: 1.24 million (2018)

Total Medicaid Spending: $9.66 billion (FY 2016 estimate)

Share of total population covered by Medicaid: 21%

Share of Children covered by Medicaid: 40% (estimate)

Share of Medicaid that is Children and Adults: 74%

Share of Spending on Elderly and people with disabilities: 53%

Share of Nursing Facility Residents covered by Medicaid: 66% (estimate)

FMAP: 71.67%

Expansion state: Yes

Number of people in expansion: 462,000 (2017 estimate)

Work Requirement: Yes* (Invalidated by the court)


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