The following comments were submitted by Richard Besser, MD, Robert Wood Johnson Foundation (RWJF) President and CEO, in response to the Centers for Medicare and Medicaid Services (CMS) invitation to submit comments, regard Kentucky’s demonstration project “Kentucky Helping to Engage and Achieve Long Term Health” (Kentucky HEALTH).
RWJF is the nation’s largest philanthropy dedicated to improving health and health care in the United States. Since 1972, we have worked with public and private-sector partners to advance the science of disease prevention and health promotion; train the next generation of health leaders; and support the development and implementation of policies and programs to foster better health across the country, including high-quality health care coverage for all. We are working with others to build a national Culture of Health that provides everyone in America a fair and just opportunity for health and well-being. Access to comprehensive, quality health care is central to our vision of good health and well-being. Accordingly, health care coverage expansion is critical to our mission and has been an essential component of our work for more than four decades.
RWJF’s commitment to coverage is established in the following principles:
- Good health is necessary for everyone in America to participate fully in society, and a healthy population is vital to the productivity and economic and social well-being of our nation.
- Health care is critical to good health and should be available to all regardless of race/ethnicity, age, gender, geography, or income.
- Health insurance coverage is essential for access to necessary and appropriate health care and should be available to everyone in America.
Therefore, we believe that:
- Health insurance coverage should be affordable. Individuals should contribute to the cost of their care; however, the cost of health insurance and the out-of-pocket costs incurred in accessing care should not force individuals to choose between health care and other basic necessities of life.
- Health insurance coverage should include necessary, appropriate, and effective health care services.
- Health insurance coverage should be continuous and portable, bridging life span, employment, and geographic relocation.
- Health insurance coverage should promote high-quality and cost-effective health care.
- Health insurance coverage should be based on shared responsibilities between the public and private sectors and individuals. These responsibilities include the oversight, management, and financing of the health care system.
Our strong commitment to health care coverage and its important role in promoting good health compel us to provide comments on the Kentucky HEALTH demonstration. Our comments address the following topics:
- Anticipated impacts on coverage of the Kentucky HEALTH demonstration, which includes a community engagement requirement, premiums of up to 4 percent of household income, and a lockout period.
- Importance of having coverage to accessing necessary health care, which is critically important to good health.
Anticipated Impacts of Kentucky HEALTH
The Kentucky demonstration project allows the state to require some Medicaid beneficiaries ages 19–64 to participate in a minimum of 80 hours of “community engagement” activities each month in order to retain their Medicaid coverage. Qualifying activities include participating in community service, conducting a job search, attending school or vocational training programs, or receiving treatment for a substance use disorder. Certain groups of beneficiaries are exempted from these requirements, including former foster care youth, pregnant women, primary caregivers of a dependent, medically frail individuals, full-time students, and individuals with an illness that prevents them from meeting these requirements. Beneficiaries who are not exempted and do not demonstrate that they have met these requirements will be terminated from the program within 60 days and will be able to reactivate their eligibility on the first day of the month after they have met these requirements. In addition to these community engagement requirements, the Kentucky HEALTH demonstration also includes premiums on a sliding income scale for some beneficiaries, and lock outs from the Medicaid program for failure to comply.
We forecast some of the likely impacts of these changes to the Kentucky Medicaid program below. This forecast is informed by: (1) Modeling of the expected impacts of the Kentucky HEALTH program based on survey data and previous demonstrations; (2) Data on what has happened in Arkansas since that state introduced work requirements in its Medicaid program at the beginning of June; (3) Learning from other social safety-net programs that instituted work requirements; and (4) Previous research on Medicaid demonstrations in the past that have made it more difficult for beneficiaries to retain coverage. The bottom line is that many low-income residents in Kentucky are likely to lose access to Medicaid coverage under the proposed changes to the program because of difficulty meeting the substantive requirements and also, because of administrative complexity in documenting compliance.
Modeling of expected impact of Kentucky work requirements
In March 2018, the Urban Institute released a study looking at the populations in Kentucky that could be impacted if the Medicaid community engagement requirements were implemented. They found that of the people most likely to be affected by the new requirement, 74 percent have no access to a vehicle or the internet, have less than a high school education, have a serious health limitation or live with someone who has a serious health limitation. Another challenge is that among the group of enrollees who are already working, only 64 percent worked 50 weeks a year and 20 hours per week, suggesting that 36 percent of this group would face coverage instability. Furthermore, all populations (whether exempted from the requirements or not) would have trouble complying with the administrative requirements and may have interruptions in coverage as a result. A separate report found that only 67 percent of rural Kentucky residents have the capabilities on their mobile device to meet the community engagement reporting requirements.
The Kaiser Family Foundation also completed a national level analysis looking at what would happen if all states implemented community engagement requirements in their Medicaid programs. They estimated that overall, among the 23.5 million people who would likely be subject to the requirement across the country, 1.4 to 4 million people could lose coverage. For most of the people who would lose coverage, it would be primarily because they cannot document their compliance and because of other administrative burdens.
A separate analysis on national impact of community engagement requirements, found that among the people at risk of losing Medicaid due to community engagement requirements, almost two-thirds (63%) are women and two-fifths (39%) are middle-aged (ages 45 to 64) adults, who have a greater risk of serious medical problems. The researchers also found that when those who were not working or looking for work were asked why: nearly one-third (29%) said that they were caring for a family member and another third (33%) said that they could not work because of a disability, despite the fact that those receiving disability benefits were excluded from the analysis. Current disability programs exclude many with serious health problems because of overly rigid requirements. Getting a disability determination is difficult and time-consuming. For example, it typically takes about 90 days for a disability determination, not including the time required to gather relevant medical information. Applicants often need legal assistance to complete the process. Finally, the data indicated that nonworking Medicaid beneficiaries are three times as likely as working beneficiaries to have seen a mental health professional in the past year, twice as likely to have been hospitalized, and have 50 percent more doctor visits in a year. Those not working often have serious health needs, and could face serious health issues if they lose Medicaid coverage.
Learning from Arkansas
We cannot know for sure at this point what will happen if the Kentucky HEALTH demonstration is implemented, although the research discussed above does give a reliable indication. There is already early data on changes in Medicaid coverage in the state of Arkansas where a community engagement requirement was instituted at the beginning of June. Arkansas is rolling out its community engagement requirement for Medicaid enrollees in stages. In the first stage, only beneficiaries ages 30–49 were expected to report their work hours. Seventy-two percent of the people who were expected to log on and report their hours did not comply with the requirement. Implementation has just begun, but early analysis suggests that several factors could help explain this high rate of noncompliance: a high rate of households that lack internet access in Arkansas; and a high number of households that might not have received the information about the requirement from the state because of elevated rates of residential instability among this population. Arkansas plans to terminate eligibility after three months of noncompliance which could mean significant coverage loss in the state and also give some indication of what could happen in Kentucky.
Lessons from other social safety-net programs that introduced work requirements
In a December 2017 report, the Urban Institute examined work requirements that are included in Temporary Assistance to Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), and housing programs to better understand the details of the programs and the impacts of the work requirements on the populations these programs serve. This research found that employment increases from instituting the work requirements were modest and diminished over time. The research also found significant disparities for African-Americans and people of other races in terms of finding stable employment. Further, the TANF research found that recipients with disabilities and poor health were more likely to lose benefits related to work requirements because of challenges navigating the system (for example, obtaining exemptions). Many of these same lessons showing little to no impact on employment related to work requirements are likely to apply under work requirements in a Medicaid program.
Research on previous Medicaid demonstrations
There is strong evidence that suggests that instituting premiums and other types of cost-sharing on low-income populations in Medicaid serves as a deterrent to retaining Medicaid coverage and accessing needed services. For example, in 2003, the state of Oregon implemented premiums and co-payments in their Medicaid expansion program, allowing for a natural experiment between their two different Oregon Medicaid programs—Oregon Health Plan (OHP) Standard and OHP Plus—in which the OHP Standard program cut benefits, applied copayments to remaining benefits, and allowed providers to refuse to provide services if beneficiaries did not pay premiums. OHP Standard also increased existing premiums and instituted more severe penalties for missing premiums with disenrollment and a six-month re-enrollment “lock out.” This design change enabled researchers to review the impacts on the affected population. One study found that membership in the OHP program was dramatically reduced when premiums and other cost-sharing was instituted and that people who left the program because of the cost- sharing reported less access to care, less use of primary care and also used the hospital emergency room more often than those who left the program for other reasons. In 2004, the state of Oregon reported the following on the impact of premium changes in the Oregon Health Plan Standard Program: total enrollment fell from 102,000 in 2002 to approximately 51,000 in late 2003; and approximately 16,000 OHP Standard members were dis-enrolled due to the penalties related to missing premium payments. In 2017, the Kaiser Family Foundation completed a review of research findings on the effects of premiums and cost-sharing on low-income populations and found that premiums serve as a significant deterrent to enrollment in Medicaid and are associated with higher rates of disenrollment. This significant body of evidence suggests that instituting premiums as proposed by Kentucky in their demonstration and, importantly, the lock-out design will likely serve to significantly reduce enrollment in the Medicaid program and increase the uninsured population.
The Impact of Losing Coverage
The discussion above highlights why we can expect that a significant number of people currently on Medicaid in Kentucky will lose these benefits under the demonstration. Numerous studies provide evidence of the relationship between having insurance coverage, including Medicaid, and experiencing greater access to necessary health care and better health outcomes than people who do not have health insurance coverage. Much of this research is summarized in the review of relevant literature published in the New England Journal of Medicine in 2017. Here are a few examples from the literature. For example, a 2015 analysis of National Health Interview Survey data that compared experiences in states that did and did not expand Medicaid found that visits to a general practice doctor increased by 6.6 percentage points in Medicaid expansion states compared to others. Another study found that the states that expanded Medicaid had lower uninsurance rates; greater access to primary care; fewer skipped medications for cost-related reasons; reduced likelihood of using the emergency department; and increased outpatient visits than states that did not expand Medicaid. The share of adults reporting better health status was also higher in the expansion states. Research also suggests that Medicaid beneficiaries are less likely to delay care and to avoid care altogether than uninsured populations. Adult Medicaid beneficiaries receive more preventive care, diabetes treatment, and dental care than uninsured adults, and children covered by Medicaid receive more wellness checkups than uninsured children. Reports on the “Oregon Health Insurance Experiment” published in 2010 found that people who were randomly assigned to get Medicaid coverage had significantly lower rates of depression than people who did not gain access to Medicaid.
In addition, coverage brings important economic benefits to low-income individuals. Medicaid access enables people to spend more on other determinants of health, such as housing and food, than people who lack health care coverage. People who have Medicaid coverage also have lower debt than people without access to Medicaid, giving them greater flexibility in their lives as well. One study showed that adults with disabilities living in Medicaid expansion states are significantly more likely to be employed and less likely to be unemployed due to disability compared to adults with disabilities in non-expansion states.
Importantly, one of the major theories underlying the Kentucky Medicaid demonstration is that work is associated with better health and that this program will provide greater incentives for low-income residents of Kentucky to work. RWJF is a strong proponent of the relationship between work and health. Our County Health Rankings and Roadmaps includes unemployment rates in a county as one of the social and environmental factors that impact health. As part of the resources available to communities, we also provide policies and programs on What Works for Health, including programming to increase employment, such as vocational training and training programs for hard-to-employ adults.
However, while we believe that lack of work can negatively impact health, we also believe that at the individual level, poor health can interfere with the ability to work. There is abundant evidence that coverage is critically important to health, suggesting that loss of coverage could impede obtaining and maintaining employment.
Evidence suggests that the changes that Kentucky is proposing to its Medicaid program will result in a significant loss of coverage, which will have a detrimental impact on the health and well-being of low-income residents. Maintaining access to quality health care coverage is a priority for our Foundation and we look forward to working with the Administration and other partners to ensure that everyone in America has the opportunity to live the healthiest life possible.