Evil Medicaid Reforms Could Gut Rural Hospitals

By Molly Osberg | January 12, 2018 | 10:03pm

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Today Kentucky became the first state to require Medicaid recipients to prove they’re working or getting job training in order to retain their insurance, part of a waiver concocted by Governor Matthew Bevin in 2016 and just now approved by the Trump administration.

The waiver pushes Kentucky’s Medicaid system to align to “commercial models,” as per the waiver. It also contains additional provisions such as a lock-out period of up to six months for people who are unable to pay their premiums; the elimination of non-medical transportation; disenrollement and non-eligibility for Kentuckians who fail to report changes in circumstance; and waivers for retroactive eligibility for certain populations—payments that helped cover hospital costs when patients needed life-saving treatments but were unable to pay.

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(For people who are enrolled and make ER visits that are deemed “non-emergency,” money is taken out of a recipient’s vision, dental, and prescription coverage.)

Obviously this is a system that will disproportionately affect Kentucky’s low-income populations, and some estimates say as many as 95,000 people could lose coverage.

But in a state like Kentucky, which has struggled to keep open rural healthcare centers and hospitals, the fallout from the waiver could be disastrous for the institutions that provide coverage in the first place. In 2012, Kentucky hospitals were providing $2.4 billion worth of “uncompensated care,” according to a report from the AP; that year, 15 of the state’s 65 rural hospitals were in danger of closing. Three years later, the amount of unpaid medical bills dropped 67 percent, to $786 million as half a million of the state’s resident registered for health insurance under the ACA.

Recent research from the University of Colorado recommended that any congressional effort to reform Medicaid “should consider the strong relationship between Medicaid coverage levels and the financial viability of hospitals,” particularly in underserved areas. In the last year, four of Kentucky’s rural hospitals were forced to close. One could assume that number will be higher in the next 12 months.