Gov. Matt Bevin said Wednesday that a University of Kentucky health executive and former state health secretary, Mark Birdwhistell, will help him design a Medicaid program that “will be a model to the nation.” He said he hopes to know by the middle of 2016 whether his new administration can reach an agreement with federal officials on the shape of the program that serves 1.3 million Kentuckians.
Beyond that, Bevin offered little new insight into his plans for Medicaid, which was a major issue in the race for governor. As a candidate, the Republican first said he would abolish Democratic Gov. Steve Beshear’s expansion of eligibility for Medicaid under federal health reform, but after state Senate President Robert Stivers, R-Manchester, said the legislature would decide the future of Medicaid, and mentioned Indiana as a possible model to follow, Bevin started talking about modifying the program and using examples from other states including Indiana.
Birdwhistell is UK’s vice president for health affairs and was health secretary under the last Republican governor, Ernie Fletcher. He and Bevin said they would work with various stakeholders, including health-care providers, to develop a plan in consultation with federal officials. Bevin said he had discussed the issue with federal Health and Human Services Secretary Sylvia Burwell, who has ultimate authority over the shape of state Medicaid programs because the federal government funds most of the program.
Bevin said Birdwhistell “will be working on what we can do to customize a solution, something that is truly transformative… . This transformation, I think, will be a model to the nation.”
In talking about stakeholders, Bevin and Birdwhistell did not mention the General Assembly. Asked on his way out of a press conference what role the legislature would have in designing the program, Bevin said, “Obviously, until we have a plan, there’s not much they can comment on.”
Minutes later, Stivers went to Bevin’s office for what appeared to be an unscheduled meeting, then emerged to say that the administration had been discussing Medicaid with him and other legislators, including Democrats, in the past few days. “He wants everybody to come to the table and have dialogue,” Stivers said. “I told them that we could deal with it legislatively,” he said, but noted that a 1966 law gives the governor the authority to restructure the program “without legislative approval.”
Stivers said there is probably no better person to redesign Medicaid than Birdwhistell, and he said he was not concerned that whatever plan the UK official designs would help larger hospitals like UK’s more than smaller hospitals.
Stivers said he hopes the program can include incentives for changes in health behavior, such as smoking, which is the leading cause of Kentucky’s low health status. He said the managed-care companies that act like insurers for Medicaid patients are “managing dollars, not managing people.” He concluded, “The ultimate goal is to make sure there is health care … that is sustainable and covers the same population.”
Stivers’s Eastern Kentucky district, and those of many other Republican senators, have large percentages of people on the Medicaid expansion, which made the program available to people in households with incomes up to 138 percent of the federal poverty level. About 400,000 are covered by the expansion. (For county-by-county data, go to http://kypolicy.org/a-county-by-county-look-at-the-medicaid-expansion.)
Bevin said in his campaign that the state would no longer be enrolling people in Medicaid at the 138 percent level, but the health-reform law makes extra federal dollars available only to states that enroll people up to that level. Federal officials have allowed no state waivers with any exemptions to the 138 percent rule. Asked if he was considering a request to reduce the eligibility level, Bevin said he did not plan to enroll people at 138 percent of poverty “under the existing reimbursement model.”
Asked if currently eligible recipients, such as those between 100 and 138 percent of poverty, might be required to have “skin in the game,” a term Bevin has used to encompass premiums, co-payments and deductibles, he said, “Ultimately we want to take people from full dependency to a point where they can sustain themselves… . I think it’s important for us to empower people, because with this comes dignity. We owe people the dignity and self-respect that comes with being able to make decisions for themselves even while they are dependent upon the assistance of others. This is what we will do.”
The federal government pays the entire cost of the Medicaid expansion through 2016. States begin paying 5 percent in 2017, rising in annual steps to the law’s limit of 10 percent in 2020. Kentucky is expected to need $257 million for its share in the two-year budget that begins July 1.
The Beshear administration, citing a state-funded Deloitte Consulting study, said the expansion would pay for itself through jobs and tax revenue generated by bringing more people into the health-care system, but Health Secretary Vickie Yates Glisson said in Bevin’s press release that “Leading Kentucky economists agree that the health-care jobs predicted by the Deloitte study have not materialized, rendering the suggestion that Medicaid expansion pays for itself invalid.”
Bevin said of the Beshear administration’s claim, “That was a lie, a straight-up, straight-out lie.” He added that traditional Medicaid, for which the state pays about 30 percent, will be $128 million over budget when the fiscal year ends June 30.
The governor said the share of Kentuckians on Medicaid is “fast approaching” 30 percent, and “That is literally not sustainable financially. The only way in which we are going to allow it to continue in any form – traditional, expanded or otherwise – is to transform the way in which it is delivered.” The ultimate purpose, he said, is to help Medicaid recipients “have better health outcomes. That is the propose. That is the absolute intent behind everything that you’re hearing today.”