Kentucky becomes health care testing ground with Medicaid overhaul

Luke Skywalker · Jan 18, 2016

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Dr. Robert Miller, a podiatrist in Prestonburg, Ky., listened to Sarah Beth Blankenship describe a problem she had with her foot. Jan 12, 2016(Photo: By Pat McDonogh, The CJ)Buy Photo

PRESTONSBURG, Ky. –*These hardscrabble Appalachian hills so rife with need and illness have been a national testing ground for Obamacare over the past two years, but they may soon test something more fundamental – the age-old struggle to balance personal responsibility with the obligation to care for the poor.
The Affordable Care Act gave thousands of residents in Eastern Kentucky, one of the nation’s most vulnerable communities, unprecedented new access to health care – mostly through expansion of taxpayer-funded Medicaid, helping make Kentucky a national model.
But it also raised fears about yet another burden on a fragile state budget*and skepticism among conservatives who saw it as out of step with their political ideology.
Newly elected Republican Gov. Matt Bevin alluded to both concerns when he announced plans to remake Kentucky’s Medicaid expansion to look more like nearby Indiana’s program, a more limited version that calls for patients to share more costs so they have a bigger stake in their care. Bevin is moving forward with plans to dismantle the state’s popular “kynect” health insurance exchange where residents sign up for both Medicaid and private coverage.
If the governor succeeds and Medicaid changes begin next year, Kentucky would join six other states with specially-designed Medicaid expansion programs approved by the federal government. It also would be one of the first states to replace the traditional Medicaid expansion envisioned by the ACA with one that includes co-pays and premiums.
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Yet some worry that could undermine hard-won health care gains in one of the neediest corners of America, where struggles with poverty,*unemployment and ill health are common.
“We’re obviously watching this very closely,” said Judith Solomon, a vice president at the non-partisan Center on Budget and Policy Priorities, which focuses on poverty and inequality. When it comes to making poor people pay more for their care, “there are some real serious questions that (federal agencies), the Obama administration and future administrations will have to address,” especially since self-styled Medicaid expansions are part of “the next wave” in the ACA’s evolution.
Here in Floyd County, where the Courier-Journal and USA Today have chronicled the impact of the ACA since it began, Medicaid patients and their doctors fret –*and often disagree – about what all this change could mean for them.
Unemployed father Zachary Ryan Dye, 19, said “it ain’t possible” for people in his position to pay even a little more for health care, so he’d either have to give up the insurance or skip appointments. Things have been so tight lately he’s had to rely on a church pantry to help with food for him and his 1-year-old.

Buy PhotoZachary Dye contemplated what his life would be like if Gov. Matt Bevin makes planned changes to Medicaid. Dye, from Martin, Ky., is unemployed and the father of a baby girl. He is seen in a restaurant in Prestonburg, where he hoped to find a job. Jan 11, 2016.*(Photo: By Pat McDonogh, The CJ)

Colon cancer survivor Pamela Hereford, 57, said she could probably pay a few dollars more for her Medicaid*but worries the poor families she works with as*mental health services manager*at the local Head Start would have to do without.
And Dr. Joanna Santiesteban, a Prestonsburg obstetrician/gynecologist and chief of staff at Highlands Regional Medical Center, fears premiums will be impossible for patients who scrape by on minimum wage, but she hopes co-pays could make people more invested in the care she provides.
Floyd County leaders wonder what a Medicaid overhaul would mean for the overall health of the*community, especially as coal jobs disappear, taking livelihoods with them. Some here argue those concerns trumped Obamacare and helped lead most counties in Appalachian Kentucky to vote for Bevin over Democrat Jack Conway –*despite Bevin’s vow to pull back or change Medicaid that had helped so many area residents.
“We’re taking a major hit right now with the loss of coal jobs and all those jobs tied to the coal industry,” county Judge-Executive Ben Hale said. “We’d hate to have another hardship put on us for the people qualified for Medicaid, who are struggling as it is.”

Buy PhotoPamela Hereford is a survivor of colon cancer and a resident of Eastern Kentucky. She currently is on Medicaid through the state's Kynect system.*(Photo: By Pat McDonogh, The CJ)

States seek more from patients
Bevin’s plan would be a new turn in a rollout that has gained national attention.
Since Kentucky became the first Southern state to fully embrace the ACA under former Democratic Gov. Steve Beshear, more than half a million residents have signed up for coverage, including nearly 425,000 for expanded Medicaid covering people earning up to 138 percent of the poverty level, or about $16,000 for one person. That included 14 percent of the population in Floyd County, which the Robert Wood Johnson Foundation ranks as second worst in the state on health indicators.
State estimates from last year show Floyd’s uninsured rate was cut in half to less than 8 percent since the ACA took effect, while the state’s rate dropped from more than 20 percent to less than 9 percent.
But Bevin has said the current Medicaid program, which covers nearly 1.3 million Kentuckians, is not sustainable. The federal government pays 70 percent of the costs of about 875,000 people in traditional services. Right now, the federal government is paying 100 percent for those added under the expansion. But*by 2020, Kentucky will have to shoulder 10 percent of that cost.
He said he’s looking to Indiana, which has enrolled about 340,000 people in expanded Medicaid. After initially joining other red-state Republican governors in refusing the expansion, Indiana Gov. Mike Pence last year won federal approval for the Healthy Indiana Plan, a more limited version that differs from traditional Medicaid by requiring premiums, co-pays and offering different tiers of coverage.
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Participants are required to make monthly contributions ranging from $1 to $27. Those who don’t pay can be disenrolled, and anyone below the poverty level who fails to make payments is put into a "basic" plan that has fewer benefits and requires co-pays for care. It also includes financial disincentives to repeated use of hospital emergency rooms, among other provisions.
Self-styled plans in several states with Medicaid “waivers” from the federal government include cost-sharing. Medicaid patients earning above the poverty level in New Hampshire, for example, started paying $3 to $8 co-pays this year. Still, Solomon said Indiana’s plan calls for “the maximum available cost-sharing.”
Studies are underway to assess the impact of Indiana’s plan, but the jury is still out on whether the approach saves money, promotes more responsible behaviors or adds barriers to accessing care,*said Indiana University health researcher Kosali*Simon.
Bloomington-based ACA “navigator” David Meyer, who helped people enroll in Indiana’s plan, said many of the poor struggle to navigate a complicated Medicaid system and pay monthly bills.
Their cost-sharing “may sound like Starbucks money to you and me, but it can be the difference between getting a prescription drug and not getting it,” he said, adding that Kentucky Medicaid recipients could fall off the rolls if the state switches them to a new and more complex system.
Studies back up his concerns.
“There’s research that tells us that any financial barriers you put in place for Kentucky’s lowest-income people can affect access to care,” said Emily Beauregard, executive director of Kentucky Voices for Health.
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At the same time, small co-pays and premiums typically don’t add up to meaningful revenue in state coffers – and may not even offset the cost of collecting them –*with any savings likely coming from deferred care or fewer signing up for Medicaid, some experts say.
“A $10 co-pay doesn’t give the state much money, but it does have a big impact on beneficiaries,” said Dr. Benjamin Sommers, an assistant professor at the Harvard T.H. Chan School of Public Health who studies Medicaid expansions.
Sommers’ recent research shows any Medicaid expansion is better than none. A study this month in the journal Health Affairs compared Kentucky with Texas, which didn’t expand Medicaid, and Arkansas, which has a waiver plan that includes health savings accounts to which certain recipients make monthly contributions of $5 to $25 for co-pays and co-insurance.
The study found both Arkansas and Kentucky saw improved coverage and access to care compared with Texas. The share of people who had trouble paying medical bills declined more steeply in Kentucky than Arkansas, but aside from that, Sommers said, “Arkansas and Kentucky looked pretty similar.”
Mixed opinions on cost-sharing
In the restaurants, barber shops, small businesses and medical clinics tucked into the winding roads and mountainsides of Floyd County, there's*disagreement about the potential impact of such a change.
Some share Bevin’s view that paying premiums gives people “a vested interest” in their care. “Having skin in the game is a big, big differentiator between whether or not the person has the dignity that goes with making decisions for themselves," he has said.
Darrell Patton, a Prestonsburg insurance agent for nearly four decades, believes “skin in the game” is a good idea. At least one Appalachian Kentucky*Medicaid managed care company now charges small co-pays, doctors said, but federal*law generally prohibits states from charging*premiums for*Medicaid recipients*earning less than 150 percent of the federal poverty level unless the state gets a waiver.

Darrell Patton, who has been a Prestonsburg insurance agent for nearly four decades, has helped people sign up for Medicaid and plans through kynect for three years. He believes that requiring Medicaid expansion recipients to have some “skin in the game” is a good idea.*(Photo: Chris Kenning)

While some of Patton's clients couldn’t afford even small premiums, he*said, too many work for cash and qualify for Medicaid while driving $40,000 trucks.
“If you don’t have any kind of responsibility, sometimes you’ll seek the most convenient care – which is in a lot of cases the most expensive care,” such as the ER, he said.
Randy Sluss, who lives just over the county line, had to go on Medicaid in October after his coal equipment business went under. It currently covers $500 each month for his diabetes medication, with nothing out of pocket. He said he wouldn’t mind paying a monthly premium of $27 – as long as he could ek it out of a tight budget that can’t handle any unexpected expenses.
“That’s a tank of gas. That wouldn’t be a problem” at the moment, he said. But “I’ve been looking for a job for three months” and “there are no jobs here.”
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Others say it’s not right to impose more costs on the neediest residents in a county where nearly one in three lives in poverty. At a Floyd County drug treatment facility of bare rooms in an old roadside motel, 25-year-old Medicaid recipient and recovering addict Mike Richardson argued, “It shouldn’t cost money to save a life.”
Dye, the young single father, said Medicaid gives him access to the anxiety medications he needs and lets him go to the doctor’s office when he’s sick instead of the ER – but premiums and co-pays would put obstacles in his way.
“I hate to see anybody pay to go get seen,” said Dye, who is looking for a job but currently lives with his mother and has no car. “I think they should just keep (Medicaid) the way it is.”
Hereford agreed, saying even small health costs can quickly add up when you face a serious illness like she did.
“Honestly, I think I deserve affordable care,” she said. “I have to be healthy to work.”

Buy PhotoDr. Joanna Santiesteban, an obstetrician/gynecologist in Prestonsburg, stands with her husband, Brent Graden, general manager of their practice, Harper OB/GYN.*(Photo: Laura Ungar, The Courier-Journal)

Working harder for less
Health care providers, meanwhile, wonder what Medicaid changes could mean for them and their patients.
Laneta Auxier, clinic coordinator at Mountain Comprehensive Care Center in Prestonsburg, said she agrees people should take responsibility for their care, but some patients can barely afford gas to get to the doctor, let alone co-pays. She added that many will likely balk at having to pay for something that was free to them before.
Santiesteban, the obstetrician/gynecologist, said the Medicaid expansion has really helped previously uninsured patients forced to delay care. But it’s been tough on her business, and she doesn’t expect that to change unless Bevin’s proposal includes higher reimbursements for doctors. As it stands, she said, she’s seen a new flood of Medicaid patients, many with complicated, time-consuming medical problems, which has meant, “I do a lot more with less pay.”
“It’s almost to the point where you’re paying to see the patient,” added Dr. Robert Miller, a local*podiatrist.
If Kentucky adopts an Indiana-style Medicaid expansion, Miller said, collecting co-pays will prove a challenge, based on his experience with the one Medicaid company he deals with that charges them. Doctors must document that they tried to collect, and the cost of sending out letters to those who can’t afford a $2 co-pay can be $5 or $10.

Dr. Donald Chaffin sees patients in his Martin County office.*(Photo: Chris Kenning)

Dr. Donald Chaffin, who practices in an area over the county line of ramshackle homes and shuttered coal mines, said only 20 percent of his patients pay despite signs taped on his doors stating co-pays are required before service. If that goes up, he could be out even more money.
Thursa Sloan, public health director in Floyd County, said with all that’s at stake, many in her community are anxiously waiting for Bevin to make a more concrete proposal by summer.
Meantime, she said, “it means more uncertainty for us.”
Reporter Chris Kenning can be reached at (502) 582-4697. Reporter Laura Ungar can be reached at (502) 582-7190.?

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Kentucky becomes health care testing ground with Medicaid overhaul

Luke Skywalker

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