Medicaid overhaul faces tough test in Trump country
SALYERSVILLE, Ky. — Kentucky Gov. Matt Bevin’s planned overhaul of Medicaid is running into the unforgiving reality of impoverished small towns like this one, which voted overwhelmingly for President Donald Trump.
Making adults work as a condition for getting health benefits is popular with the conservatives running many state capitals and Washington, D.C. But here in Magoffin County, where one of the last coal mines shuttered two years ago, there is little work to be had.
“Around here, there ain’t no jobs,” said Johnny Puckett, 55, one of the more than 400,000 low-income Kentucky adults covered through Obamacare’s Medicaid expansion. Puckett, who didn't vote in the 2016 election, said he hasn't been employed in 25 years and doesn't know how he would get a job to keep his health insurance.
Trump's health department is expected to bless Bevin’s plan requiring poor adults to work to enroll in Medicaid in a first test of the GOP idea nationwide. Arizona, Arkansas, Indiana, Maine and Wisconsin have already asked the federal government for similar permissions, or will do so soon.
Trump’s top health officials, along with many Blue Grass Republicans, argue the work and other new requirements would bring much-needed discipline to a program that’s grown by more than 11 million people nationally under Obamacare’s coverage expansion.
"If I had my way, everybody who is able to work would be required to work for any program there is," said Sen. Rand Paul (R-Ky.). "I think work is a good thing, not a bad thing. I don't think work is punishment."
"I think it incentivizes people to get out there," agreed Kentucky state Sen. Ralph Alvarado, a physician, who said that able-bodied individuals relying on public assistance should find ways to give back to their communities.
Medicaid was never meant for "able bodied" adults who obtained coverage under Obamacare and the program must be protected for more vulnerable populations, Alvarado said.
Under Kentucky's proposal, able-bodied, low-income adults would be required to work up to 20 hours per week, or pursue activities such as job training or volunteer work to be eligible for Medicaid coverage. The state is also seeking federal approval for other conservative policies, including instituting monthly premiums ranging from $1 to $15 for certain low-income adults and parents, and co-pays if individuals miss premium payments.
But requiring work as a condition of Medicaid coverage “assum[es] that jobs are readily available,” said James Ziliak, a University of Kentucky economics professor who specializes in poverty research. “And they’re not in eastern Kentucky. They’re just not there.”
In fact, Puckett’s problem is shared by a surprising number of the roughly 13,000 residents of Magoffin County where Trump won 75 percent of the vote. The county's 17.3 percent unemployment rate is the state's highest, and there are limited prospects for the economic recovery that Trump has promised.
Salyersville Mayor James "Pete" Shepherd, a Democrat who voted for Trump because he wasn't a conventional politician, does not see how the job requirements will work in his hard-hit community. Still, he is philosophical about the outcome.
“I’ve seen a lot of governors come and go — and presidents," Shepherd said. "I don’t feel betrayed or failed anymore. I just feel, ‘You gotta move on.’ We just do the best we can.”
The irony is that Kentucky was an Obamacare success story during the law’s early years under former Democratic Gov. Steve Beshear. As a rare Southern state to embrace the 2010 health care law, Kentucky’s uninsured rate dropped more than any other state.
In Magoffin County, where a third of residents live in poverty, the uninsured rate among adults dropped from 32 percent to 12 percent between 2008 and 2015, according to one estimate.
Now Bevin, with the help of a Republican ally in the White House, is poised to make Kentucky the new beacon of conservative health care policy.
Meanwhile, Congress continues to debate an Obamacare replacement bill that would phase out the law's Medicaid expansion and for the first time put the program on a budget.
If approved, those changes would have much larger consequences for the country's safety net. But the Trump administration already has broad latitude to allow state governments to make sweeping changes to their Medicaid programs, so long as they further the program’s underlying goals — the interpretation of which has changed with new administration.
"The best way to improve the long-term health of low-income Americans is to empower them with skills and employment,” Seema Verma, administrator of the Centers for Medicare and Medicaid Services, and HHS Secretary Tom Price wrote to governors in March, signaling their support for work requirements.
Democrats and health care advocates argue that work requirements distort the purpose of Medicaid which in their view is to deliver health care to vulnerable Americans.
"When people are sick, they can't work," said Cara Stewart, a lawyer with the Kentucky Equal Justice Center who has helped enroll individuals in Medicaid throughout the state.
The Obama administration allowed some red states, such as Indiana, to charge Medicaid expansion enrollees limited premiums and to implement employment incentives less stringent than those sought by Kentucky. It granted these conservative policies to help convince more GOP-led states to expand Medicaid under Obamacare, but the Obama administration regularly rejected work requirements.
It’s unclear how many people might be disqualified from coverage because they don’t meet the work requirements, though experts say other GOP-favored changes, like premiums and time limits on benefits, would more sharply reduce enrollment. Kentucky’s proposal would allow work requirement exemptions for pregnant women, people with disabilities and especially frail people. Those meeting existing work requirements for food stamps or housing assistance might also automatically satisfy the new rules.
While Kentucky isn’t seeking a time limit on benefits, other Republican-led states, including Wisconsin and Arizona, are looking at those.
Critics of Medicaid work requirements point out that many enrollees capable of working already have jobs. In Kentucky, about half of working-age Medicaid enrollees who aren’t disabled are employed, slightly below the national average of nearly 60 percent, according to the Kaiser Family Foundation.
Katelyn Allen, 25, a Salyersville mother of two, works six hours a week at drug court, like her husband, and is covered through Medicaid. She said she can’t find a job that would pay enough to send her eight- and six-year-old children to daycare if she had to increase her work hours to maintain coverage. A volunteer job — which could qualify her for Medicaid coverage under Kentucky’s plan — would be “even worse” since she wouldn’t get paid. Further, she said Medicaid premiums and co-pays would be more expenses her family can’t afford.
“For me, I know it would be hard,” said Allen, who also didn't vote in November. She questioned why the government would make poor people pay for health care. "If they could afford to pay the co-pays and stuff, they wouldn’t be on Medicaid anyway."
Most jobs in the county come from small businesses, although the opening of a new manufacturing plant for truck beds last year provided a small boost, said Shepherd, a retired dentist who also runs the local health department.
Others travel outside the county to find jobs, including to an oil refinery in nearby Ashland and a Toyota plant roughly one-and-a-half hours away.
“Most people would work if they could find a job,” he said. “I have people come in here every day wanting a job.”