Highlight on Kentucky: Bevin’s proposed Medicaid waiver hits snags

Kentucky Governor Matt Bevin’s (R) administration will be making some changes to its Section 1115 waiver, known as the Kentucky Helping to Engage and Achieve Long Term Health (HEALTH) demonstration project. The proposal, which was published in June, saw pushback from the federal government and health advocacy organizations for Bevin’s plan to undo Medicaid expansion under the Affordable Care Act and for some of the HEALTH project’s provisions that would add work or volunteer requirements for some Medicaid recipients.

Kentucky HEALTH proposal

If CMS approves the Section 1115 waiver for Kentucky HEALTH, the state’s Medicaid program would include a work requirement and the payment of premiums. The state sees Kentucky HEALTH as temporary coverage for able-bodied adults without health coverage through an employer. It would require such beneficiaries participate in “community engagement” activities, which include employment or job training, job searching, and volunteer work, for five hours per week after three months of program participation. This requirement ramps up to 20 hours per week after 12 months. All beneficiaries, excluding pregnant women and children, would be subject to a flat monthly premium, established on a sliding scale based on the individual’s income level. For more on the proposal, see Kentucky Medicaid proposal includes community engagement, employer program, premium requirements, Health Reform WK-EDGE, June 29, 2016.

Criticism of plan

The Kentucky HEALTH plan has faced criticism from multiple sources. In June, HHS Secretary Sylvia Burwell responded to an open letter from Bevin’s predecessor, former governor Steve Beshear (D), saying that CMS evaluates Section 1115 waiver proposals based on access to coverage and affordability of care. Burwell wrote, “states may not impose premiums or cost sharing that prevent low-income individuals from accessing coverage and care, nor may they limit access to coverage or benefits based on work or other activities.” She explained that the waiver proposal had not yet been submitted, but that the agency was committed to working with Kentucky to reach a solution.

The Kentucky Equal Justice Center submitted extensive comments on the HEALTH plan, calling the proposals in the plan “at least a step removed” from the state’s goals with the plan, and wrote, “We suggest that the framers of the waiver consider a different premise: health coverage and care are work supports rather than work substitutes.” The Center also pointed out the logistical challenges of the community service requirements in the proposal, by doing some quick mathematical calculations. In its hypothetical, the Center laid out a scenario where 100,000 Kentuckians statewide are covered for a year and have a 20-hour work requirement–creating 2,000,000 hours of work activity in a single week to arrange, track, and enforce. Even on a much smaller scale, such as 10,000 individuals with the 20-hour requirement, the state would need to find 10,000 nonprofits to take one volunteer each, or 1,000 nonprofits to take 10 volunteers.

The Kentucky Nonprofit Network raised similar concerns in its comments, writing that “supervising, training and managing volunteers requires nonprofit resources of staff, time, funding and expertise.” The Network shared a sampling of comments received from its member organizations regarding the costs and burdens that would be put on nonprofits as a result of the proposed requirement.

State response

Originally, Kentucky planned to accept comments through July 22, 2016. It later extended the comment period through August 14, giving the public an additional three weeks to submit its views on the proposal. Soon after the extended comment period ended, state Cabinet for Health and Family Services Secretary Vickie Yates Brown Glisson told the Kentucky legislature’s Medicaid Oversight and Advisory Committee that, based on the comments received, the Bevin Administration would be making changes to the HEALTH proposal, but that it was too early to detail what those changes would be.

Based on Burwell’s statement in her letter to Beshear that most Section 1115 waivers take six to 12 months to implement after submission to CMS, it is unlikely that Kentucky’s Medicaid expansion coverage will be changing in January 2017.

Medicaid long-term services and supports benefit vital to many seniors

Medicaid provides vital services to seniors in need of expensive long-term services and supports (LTSS). Seniors must have low income and few assets to qualify, and states have some control over benefit package design. Still, Medicaid programs spend considerable billions of dollars on LTSS care for seniors each year.

Coverage and spending

Medicaid programs must provide nursing facility and home health services, but other LTSS are optional. This includes home- and community-based services (HCBS), such as homemakers, home health aides, personal care, case management, and home delivered meals. States have shifted to providing services in home and community settings as much as possible, as opposed to institutional care.

The Kaiser Family Foundation (KFF) noted that in fiscal year (FY) 2011, Medicaid programs spent over $80 billion on full-benefit seniors, and $55.8 billion of this amount went to LTSS. The percentage of LTSS spending varied by state, based on factors such as the amount of services provided and the share of elderly beneficiaries in that location. The services are not cheap: the median annual cost for nursing facility care is $90,000, with adult day health care costing nearly $20,000 a year.

Policy concerns

The amount of people needing LTSS in the next two decades is estimated to grow significantly, and 70 percent of the population turning 65 right now is likely to use LTSS at some point. Many Americans erroneously believe that Medicare will cover this benefit for them, and are unprepared to pay for LTSS themselves. The KFF report indicated that there is interest in streamlining the HCBS benefit to make it easier on both state programs and senior enrollees as the baby boomer generation continues to age.

Advocates say Medicaid can shelter the homeless in Pennsylvania

Pennsylvania could use Medicaid to address its homelessness problem, according to advocates that believe the state’s Medicaid program should include additional supportive housing services. Those individuals assert that additional supportive housing services can be included in Medicaid as a “wrap-around support service”—a type of service that CMS endorses and described in a Center for Medicare & CHIP Services Informational Bulletin last year.

Housing services

CMS expressly does not provide Federal Financial Participation (FFP) for room and board as part of additional support services. However, states are permitted to assist individuals through coverage of certain housing-related activities and services. Some of the housing-related services and activities that Medicaid can cover include: (1) services designed to support an individual’s ability to prepare for and transition to housing; (2) services aimed at supporting an individual’s ability to sustain tenancy; and (3) services dedicated to assisting a state in identifying and securing housing options for individuals. Specific examples of each of those services are covered in the Informational Bulletin. The Open Door is an example of an organization that provides housing support services.


In Pennsylvania, advocates like The Housing as Health Campaign are asserting that, for many Medicaid enrollees with substance abuse problems, additional support is needed to keep beneficiaries in their homes. Advocates argue that without a consistent funding stream, Medicaid beneficiaries wind up homeless. The Corporation for Supportive Housing (CSH) created a blueprint, or “Crosswalk,” to serve as a map to assist the Pennsylvania Department of Health and Human Services with aligning Medicaid-eligible services with supportive housing services.


The Crosswalk was designed to guide the state of Pennsylvania, managed care entities, and service providers towards resources that can improve access to substance use treatment and mental health recovery, with a focus on housing. According to the report, individuals with unmet housing needs are often particularly vulnerable due to the high occurrence of low incomes, chronic health conditions, and behavioral health challenges among the population. The report proposes several methods to improve housing and care access for at-risk individuals. CSH started its analysis by considering the services that the state already provides through several Medicaid waivers. While Pennsylvania does have mechanisms to provide some housing support services for elderly individuals, beneficiaries with traumatic brain injuries, and individuals with a physical disability, CSH noted that additional individuals could benefit from supportive housing.


The report identified potential opportunities for alignment, where services that are already covered under the state plan could be aligned to better address housing support service needs. For example, the report suggested that, because the Pennsylvania state Medicaid plan covers Individualized Service Plans (ISPs) for the treatment of individuals with severe mental illness, an individual could, possibly, identify housing goals as part of his or her treatment plan, thereby including housing support services through an ISP. The report lists several other types of services with potential for alignment to reduce or eliminate gaps in housing service coverage.

Rethinking Medicaid

Advocates are not directly asking for a change as to the kind of services covered by the Pennsylvania Medicaid program. Instead, the CSH report and other efforts are asserting that housing problems can be best improved through a better application of existing services under the Medicaid state plan. Advocates hope that such a rethinking of Medicaid will improve health by putting a roof over the head of more individuals.

Highlight on Maryland: Citing prison smuggling, opioid options handcuffed for all

In a change to the dismay of physicians and patients, Maryland’s Medicaid program recently removed Suboxone film, a drug used in the treatment of opioid addiction,  from the state’s list of preferred drugs and substituted it with the tablet form Zubsolv. Suboxone helps people control their opioid habit, but is an opioid as well. While Suboxone does not produce a high as intense as other opioids, it keeps cravings in check while creating some feelings of euphoria in users. The concern underlying Suboxone is that it comes as a tiny, dissolvable film, about the size of a breath mint strip, and thus, transparent and easy to hide. Suboxone will only be covered if prescribing physicians first go through a prior authorization process.

Maryland state officials stressed that the change was made to stop the flow of the drug into jails and prisons. According to the Department of Health and Mental Hygiene (DHMH), Suboxone strips were diverted or smuggled into prisons and resold or traded in criminal activity. The Department of Public Safety and Correctional Services (DPSCS) noted that seizures of the drug were up about 40 percent compared to 2015, with more than 2,300 doses of Suboxone confiscated. The strips are often divided up and sold individually in prisons. DPSCS had argued that the change was necessary because of 13 fatal overdoses in prisons since 2013. Opponents stressed that without Medicaid reimbursement, the well-tolerated Suboxone will be virtually unavailable for the most vulnerable patients, resulting in a serious restriction of access to treatment. The state health department did acknowledge that the overdoses were for opioids in general, not specifically related to Suboxone.

Physicians are against the change because the tablet form is not as effective at keeping opioid withdrawal symptoms in check. Suboxone film, as well as the Zubsolv pill that replaces it, actually protect against overdoses because they contain both the opioid buprenorphine and a drug called naloxone that reverses the effects of an overdose. Naloxone is used by emergency responders to revive people who overdose. Some physicians have reported that patients who were stable and doing well on Suboxone were reacting differently to Zubsolv, in many instances negatively.