Kentucky spending $270 million just to stop people from having Medicaid

Kentucky really, really wants to shrink its Medicaid rolls. So much so that it’s planning on spending hundreds of millions of dollars in administrative costs just to find ways to kick people out of the meager safety net Medicaid provides.

Kentucky is one of 9 states that received permission from the Centers for Medicare & Medicaid Services to require people that receive Medicaid to report work or training activities just to keep Medicaid coverage. These sorts of programs tend to decrease the Medicaid rolls in a state because people get kicked off for noncompliance with the work requirements. However, it doesn’t necessarily result in increased employment, which undercuts the entire goal of the plan.

But keeping track of the forced work habits of hundreds of thousands of Medicaid recipients costs quite a bit of money — money that some states seem happy to spend, perhaps in part because 50% of those costs are borne by the federal government.

The nonpartisan General Accounting Office examined the proposed administrative costs from five states — Kentucky, Wisconsin, Indiana, Arkansas, and New Hampshire — and what they found was that states are planning on spending millions of dollars to impose work requirements on Medicaid recipients.

With only 50,000 Medicaid recipients, New Hampshire proposed spending $6 million. Arkansas is planning on spending $26 million to track the work habits of 155,000 Medicaid recipients. Indiana is going to spend $35 million to monitor 420,000 people, and Wisconsin wants to spend $69 million to track 150,000 recipients. No state comes remotely close to Kentucky, though, which said it would spend a staggering $271 million to track 620,000 Medicaid recipients.

One of the most maddening parts of this endeavor has been how lax both CMS and the states are being about actually tracking costs. The GAO found that when CMS approved the plans of the various states they did not consider the administrative costs, even though the requirement is that federal spending is no higher under the plan than without it. Put another way, states pitched these plans to the government and got approval, but no one took into account the additional millions in administrative costs.

The GAO also found that CMS’ oversight is weak and it hasn’t assessed the adequacy of its methods for overseeing administrative costs. However, rather than accept the GAO’s findings and work on keeping costs down, CMS just said it disagreed with the GAO and its procedures are fine.

Kentucky — and the Department of Health and Human Services, which approved Kentucky’s work requirement plan — got absolutely shredded in federal court earlier this year when they admitted their work requirement plan might kick as many as 95,000 people off of Medicaid. However, the administration immediately appealed and that appeal remains pending.

With all this pointless spending on ways in which to provide people with less care, it’s no wonder Kentucky’s Republican Gov. Matt Bevin remains the least popular governor in America.

Published with permission of The American Independent Foundation.