Bevin wants to 'completely transform' Medicaid

Posted at 3:41 PM, Dec 30, 2015

FRANKFORT, Ky. — The latest in a rapid-fire string of executive muscle-flexing, Gov. Matt Bevin announced Tuesday he plans to transform the way Medicaid works in the commonwealth.

Health care reform has been no secret part of Bevin’s agenda, promising on the campaign trail to overhaul how low-income Kentuckians access medical care and services and to dismantle the state’s health coverage marketplace, kynect, in favor of its federal counterpart.

At the heart of the problem, Bevin said, is what he characterized as an “unsustainable” Medicaid model in the state.

“Our state is financially in trouble and cannot afford to continue down the current Medicaid path that we are on,” Bevin said in a statement Tuesday.

Bevin stopped short of previewing what that plan might look like, other than to tap former Kentucky Secretary of the Cabinet for Health and Family Services and current Vice President of Health Affairs for UK HealthCare Mark Birdwhistell to lead the team of advisors.

Birdwhistell held his secretary office under Ernie Fletcher’s administration.

During a news conference Tuesday morning, Bevin pointed to Indiana’s approach to Medicaid as a model Kentucky could adapt. Indiana is one of six states that recently launched a Medicaid waiver program intended to expand coverage while reducing costs and maximizing state dollars matched by the feds.

Tuesday's announcement comes as the latest in a series of moves from Bevin that would reverse or divert actions taken by his predecessor, Steve Beshear — including reversing two executive orders in which Beshear increased the minimum wage of state employees and restored voting rights to thousands of convicted felons across Kentucky.

In 2014, Beshear expanded the commonwealth's access to Medicaid as part of the Affordable Care Act, on the principle that such an expansion would not just increase the number of Kentuckians with access to health care, but that it would also create 17,000 new jobs and generate more than $15 billion in positive economic impact by 2021.

But Bevin said those numbers are off. "Traditional Medicaid alone is cost-prohibitive to the state of Kentucky as it exists right now," he said. "All the happy talk that came out of the previous administration... that was a lie."

Currently, more than 1 million Kentuckians are on Medicaid, just short of 30 percent, Bevin said. According to the most recent data available from the Henry J. Kaiser Family Foundation, Kentucky spent nearly $8 billion on Medicaid in 2014, a year that saw more than 300,000 Kentuckians with new coverage.

Twice as many people signed up as state officials had predicted in the first year after the 2014 expansion, more than doubling the estimated cost in 2017 from $33 million to $74 million. Those costs could swell to $363 million by 2021, further straining finances in a state wrestling with a multi-billion-dollar pension liability.

"That is literally not sustainable financially," he said. "The only way in which we are going to all [Medicaid] to continue in any form is to completely transform the way it's delivered."

At the same time, the expansion saw Kentucky's uninsured rate drop from a high of 20.4 percent in 2013 to less than 10 percent last year. Hospitals covered less than $60 million of uncompensated care last year, down from $160 million in 2013.

Adam Beam with the Associated Press contributed to this report.