Nearly 1 in 3 Kentuckians are enrolled in Medicaid as COVID-19 recession ends jobs
After slowly falling for two years, the number of Kentuckians enrolled in Medicaid shot up by 10 percent to 1.45 million as tens of thousands of people lost their jobs — and typically, their employer-provided health insurance — following the shutdown of the state’s economy in March.
That means roughly one in every three Kentuckians was getting health coverage in June from Medicaid, the federal-state program for the poor and disabled. With the United States in an economic recession due to the novel coronavirus, it’s not clear for how long Kentucky’s Medicaid numbers will stay so large.
State officials say they also can’t predict what the cost will be. For Fiscal Year 2021, which began July 1, Kentucky budgeted $2 billion for Medicaid benefits from its General Fund; $820 million from “restricted funds,” mostly taxes and fees dedicated to the program; and $9.3 billion from federal funds.
But lawmakers hurriedly wrote that spending plan back in March, just as COVID-19 was hitting Kentucky. If the money for benefits falls short, the state budget calls for cuts to Medicaid reimbursement rates to providers and optional services and programs for recipients.
For the fiscal year that ended June 30, “we will be fine, we will be able to meet our budget,” state Medicaid Commissioner Lisa Lee told a legislative panel on June 25.
“But for 2021, there are so many unknowns, we’re just not sure what that is going to look like,” Lee said. “We’re continuing to monitor our budget and our expenditures related to COVID.”
Still, lawmakers say they’re not too worried, yet. Moments of crisis like this is one of the reasons for Medicaid, said state Sen. Julie Raque Adams, R-Louisville, a member of the budget subcommittee for health care spending.
“It’s the right thing to do during this unprecedented time,” Adams said Tuesday.
“You’ve seen the unemployment insurance lines outside the Capitol — people trying to get some kind of semblance of order with their finances. The last thing we want to do is throw up a barrier in their face when they’re dealing with a sick child or somebody that needs medical attention,” Adams said.
One large reason for the rapid growth in Kentucky’s Medicaid is “presumptive eligibility.” Under this policy, which ends Sept. 30, Gov. Andy Beshear’s administration waives the usual Medicaid screening process for people seeking medical care for two months. The federal government approved Kentucky’s waiver proposal March 25.
“It’s a very simplified one-page application. Basically, if you’re uninsured and you’re under age 65, it will get you coverage. Normally with Medicaid, there are all these extra rules around it. You know, you have to have a special health condition or you have to have income below a certain threshold,” said Dustin Pugel, senior policy analyst at the Kentucky Center for Economic Policy in Berea.
“They’ve sort of been coy,” Pugel added. “They don’t want to broadcast that they’ve created basically a whole new coverage option. It is temporary, both for the folks who are on it and for the program itself, so I don’t think they wanted to tell the world, ‘Hey, we’ve got this new wide-open coverage option for folks who have lost their insurance.’”
Groups representing medical providers said they favor keeping as many Kentuckians covered as possible during the recession. Not only are unpaid medical bills a drain on the health care industry, but people who don’t have coverage often shy away from doctors until their health problems grow extremely serious, the groups said.
“We’re always going to be in favor of people having coverage for their health care,” said Ginger Dreyer, spokeswoman for the Kentucky Hospital Association.
In her testimony to lawmakers June 25, Lee said about 77,000 of the newly enrolled Medicaid recipients joined through presumptive eligibility.
Lee also said the federal government helped offset the additional Medicaid costs in Kentucky by increasing its spending match by 6.2 percent. That could pump $600 million in additional federal funds into the state program over a one-year period, according to one estimate.
After he took office last November, Beshear scrapped controversial plans by former Gov. Matt Bevin to impose work requirements, cost sharing and other strict new rules on some of Kentucky’s Medicaid recipients. Given the current mass unemployment, that move looks smarter than ever, Pugel said.
“Programs like Medicaid and SNAP and unemployment insurance are what we call counter-cyclical. The rolls swell when times are hard and then people drop off when things get better,” Pugel said. “So on the one hand, we can say it’s terrible to see people lose their livelihood and the insurance that went with it. But on the other hand, thank God we’ve created a system that can handle a large upswing in enrollment right when people need it.”
