Kentucky’s Work Requirements for Medicaid Coverage: What It Means for Addicts

Chris Clancy

August 24, 2018

Earlier this year, Kentucky became the first state to win federal approval to impose work requirements as a condition of its Medicaid coverage, possibly complicating the access that Medicaid enrollees in the state have to addiction treatment and other services.

Over the next few weeks, beneficiaries of Kentucky’s Medicaid program between the ages of 19 and 64 will be required to complete 80 hours per month of “community engagement activities” to maintain coverage. These activities include employment, education, job skills training, and community service.

If the 80 hours aren’t met, the state will lock beneficiaries out for noncompliance, and coverage can only be reactivated on the first day of the month after 80 hours are completed. Also, Medicaid enrollees lose their coverage entirely if they don’t immediately report changes in income.

The CMS approval also allows Kentucky to end retroactive coverage for Medicaid beneficiaries, end coverage for non-emergency transportation services.

Officials estimate that, under the waiver, approximately 95,000 Kentuckians could lose their coverage over the next five years.

Kentucky’s work requirement plans name a number of population groups who would be exempt from the work requirements. These include children, pregnant women, full-time students, and the medically frail. Medically frail people include those with cancer, HIV/AIDS, blood clotting disorders, those in hospice care, and alcohol and substance abuse disorders.

However, the alcohol and substance abuse exemption would only apply within a set of criteria that the governor’s office has yet to determine.

Opponents of the waiver point out that it could place some new challenges on people with alcohol and substance abuse disorders, even with an exemption. For instance, many employers require a drug test in order to start or maintain work. With relapse common among this population (between 40 and 60 percent, according to the National Institute on Drug Abuse), this creates an almost impossible situation for many.

The waiver also has yet to consider the complications surrounding those with alcohol and substance abuse disorders who have a criminal record, which often precludes regular employment.

Medicaid and Kentucky

One of the reasons behind Gov. Bevin’s request to impose work requirements on Medicaid enrollees is that Kentucky’s Medicaid program isn’t fiscally sustainable in its current state. This, despite the federal government picking up nearly 80 percent of Kentucky’s Medicaid spend under the Patient Protection and Affordable Care Act, otherwise known as Obamacare, passed in 2010.

Spending on substance abuse and mental health treatment grew substantially after states expanded Medicaid coverage to low-income adults, with Medicaid spending over $7 billion on substance abuse disorder treatments and services in 2014.

According to a December 2017 Kaiser Family Foundation study, Medicaid plays a central role in the nation’s s effort to battle the opioid epidemic. In 2014, the program spent more than $7 billion on substance abuse-related treatments and services. Since then, three in 10 people with opioid addiction are covered by Medicaid across the U.S.

Kentucky ranks near the top among states with the highest rate of opioid overdose deaths, with 1,404 in 2016, up from 1,248 in 2015, according to the Kentucky Office of Drug Control Policy.

In a letter sent last Friday to Kentucky Governor Matthew Bevin, the Centers for Medicare & Medicaid Services (CMS) Director Brian Neale stated his agency was prepared to approve similar waivers for other states.