This is part of Kentucky Youth Advocates’ series on the federal landscape and the impacts on Kentucky children and families. 

As we near warmer summer days and the end of another school year in the Commonwealth, our federal delegates are busy in Washington DC narrowing in on a budget reconciliation package. In other words – Congress is nearing the end of its process to develop a federal budget for the next year and outline spending benchmarks for various programs and departments over the next 10 years.

In line with stated goals from the Trump administration, Congress is looking for ways to trim down spending levels and eliminate waste. Among the largest projected cuts is $880 billion from the committee that oversees the Centers for Medicare and Medicaid (CMS). 

While there are a number of ways to reach this goal, any significant changes to the Medicaid program could have big impacts in Kentucky and create ripple effects across our communities. 

What is Medicaid? 

Although the term ‘Medicaid’ can be heard frequently in conversations, it’s often misunderstood. Medicaid refers to a program that provides free or low-cost health coverage to millions of Americans, including eligible low-income adults, children, pregnant women, and people with disabilities. Medicaid is governed by federal requirements, but carried out by states. 

The cost of the program is funded jointly by states and the federal government. Many states choose to contract with Managed Care Organizations (MCOs) to administer health insurance benefits directly to covered individuals. 

What Does it Look Like in Kentucky?

Kentucky is one of many states that has expanded eligibility for Medicaid coverage, which has allowed more Kentucky adults to access the healthcare they need. Currently, nearly one in three Kentucky adults are on Medicaid. 

Even more significant is the percentage of Kentucky kids covered by the program. Between the Kentucky Children’s Health Insurance Program (KCHIP) and traditional Medicaid, nearly half of all kids across the Commonwealth benefit from Medicaid coverage. This allows kids to access services for preventive care and treatment needs including primary care visits, immunizations, dental care, mental health care, and more. 

Kentucky utilizes the MCO model and contracts with five companies to administer the majority of these benefits including: Aetna Better Health of KY, Humana Healthy Horizons, Passport by Molina, UnitedHealthcare, and WellCare. Aetna also provides coverage for all system-involved youth through the Supporting Kentucky Youth (SKY) program – this includes those in the child-welfare and juvenile justice systems. 

What Could Federal Changes Mean for Kentucky? 

Rather than making large cuts outright to the Medicaid program as was included in earlier proposals, the U.S. House Energy and Commerce Committee has passed a proposal that opts to change the eligibility and renewal requirements of the program, which is sure to have Kentuckians feeling an impact. 

Proposed cost-saving efforts, including work requirements for adults to be eligible for coverage create administrative burden to carry out and have been shown to be ineffective at increasing workforce participation. And despite the stated goal of ensuring only those eligible are covered by the program, these tactics often result in increased paperwork and red tape, which makes it more difficult to access the program and more likely that eligible caregivers will lose coverage. In turn, evidence suggests children are at higher risk for losing coverage when their caregivers do. 

Because Kentucky has entire regions covered by Medicaid at very high rates, these coverage losses could have a larger impact on the community as a whole. Rural communities have a higher percentage of residents on Medicaid than the state average and their healthcare networks rely on Medicaid dollars to stay afloat. With many rural hospitals already struggling to keep their doors open, the proposed changes to coverage and payments could be devastating – compromising the availability of healthcare services and the workforce providing care. 

What’s Next?

The current proposal from the House Energy and Commerce Committee will soon head to the U.S. House floor for a full vote before making its way to the U.S. Senate to weigh in. 

As Congress races toward a final budget package, advocates can contact their federal delegates to encourage passage of a budget that ensures Kentuckians can continue to access healthcare affordably, doesn’t result in increased administrative burdens, and allows our healthcare providers to continue serving the needs in their communities.

Photo by Los Muertos Crew via Pexels