Bevin’s daunting task of Kentuckian healthcare

By on November 26, 2015

By Simon Meiners–

The Basics: What is Medicaid?

Medicaid is the main source of health insurance for low-income Americans. Each state works with the federal government to hammer out a program tailored to its own needs. Since 2010, Obamacare has enabled states to loosen their limits on who qualifies. Now Kentucky’s Medicaid program accepts people with incomes under 139% of the Federal Poverty Level—an individual earning below $16,300 or a family of four earning below $33,700, for example.

Since the expansion took effect in January 2014, Kentucky’s uninsured rate has gone from 20% to 9%—a major drop. Of the state’s 4.4 million total residents, Medicaid now insures 1.2 million—400,000 of whom are new sign-ups under the expansion. Another 100,000 have signed up for private plans using kynect, Kentucky’s online insurance exchange where residents can shop for a policy that fits their particular needs and apply for tax credits to help subsidize it. Anybody who refuses this policy, in return pays a modest fine.

Bevin and Medicaid

Kentucky’s conservative new governor Matt Bevin is a businessman who sees government overreach as a toxic drag on economic liberty. Unsurprisingly, he’s vowed to replace the Medicaid expansion with something that will “bring relief from Obamacare to the taxpayers of Kentucky.” Since outgoing governor Steve Beshear used broad authority to bypass the legislature and unilaterally okay the expansion, it’s quite possible that Bevin could use this same executive leeway to undo it. Bevin plans to apply for a 1115 waiver which would enable Kentucky to eschew the typical restrictions and instead test out its very own Medicaid. But of the five states using the waiver so far, none have been permitted to lower the income threshold.

How would Bevin use the waiver? First, he might follow Indiana’s lead and foist new costs on Medicaid beneficiaries. Second, he insists on dismantling kynect and pushing its 400,000 newly insured users into the federal exchange at healthcare.gov. For now, though, repealing the expansion root and branch is unlikely. It’s both unpopular and politically unfeasible.

What Bevin Gets Wrong

Medicaid, Medicare, and Social Security comprise a safety net that helps keep America’s most vulnerable populations—persons with disabilities, the poor, the elderly—from falling into a cycle of grinding poverty. That’s what they do by design. There’s a useful term in labor studies to describe these kinds of people: precarity. Simply put, this refers to when a person lacks stability and security in their own life such that their psychological and material welfare suffer.

If Bevin implements his goals—pushing kynect signees into the federal exchange, shifting Medicaid costs to the beneficiary—each kynect user’s registration fee will spike from 1% to 3.5%, and the 400,000 new Medicaid sign-ups will draw fees in the form of premiums and co-pays. These changes are effectively a regressive tax and they penalize low-income earners just so Bevin can be sure they have “skin in the game.” Aside from being morally misguided, that’s just bad policy. If we really want the poorest Kentuckians to climb the economic ladder, we ought to hawkishly contain the damages they can incur. Keeping them in a constant state of precarity lowers their odds at escaping the positive feedback loop known as a poverty trap.

A Tea Partier, Bevin’s beef with government programs is premised largely on how much they cost taxpayers. In the near term, though, Kentucky’s expansion has a net positive economic impact. Right now, the federal government pays for it entirely. By 2021, their share will incrementally drop to 90%, leaving Kentucky responsible for the other 10%. Skeptics ignore the fact that the 90% of federal money is new revenue for doctors, hospitals, health care providers—that fuels investment and job growth. 

Let’s not forget that thanks to so many newly insured people using their perks, preventive services are way up: cancer screenings, cholesterol tests, flu shots, preventive dental—all have more than doubled. It’s way cheaper to treat people up front than to let them develop problems that eventuate in obscenely costly E.R. trips.

Bevin recently took office on December 8. Let’s just hope he doesn’t wallow away this project, leaving half a million Kentuckians on the back burner.

About Nick Amon

Nick Amon is the Opinion Editor for The Louisville Cardinal, all views and opinions are of his own. If you have an opinion of your own that you’d like to see in The Cardinal, email him at namon@louisvillecardinal.com

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