“In light of the district court’s decision in Stewart v. Azar,” CMS has opened a new 30-day comment period for the Kentucky HEALTH demonstration project that would implement work or community engagement requirements as a condition of eligibility. On June 29, 2018, Judge James E. Boasberg of the U.S. Federal District Court for the District of Columbia struck down the program, finding the approval by CMS to be arbitrary and capricious (HL Pulse summary here) because it failed to consider the impact on coverage. Kentucky estimates that 95,000 people will lose coverage under Kentucky HEALTH. On July 17, CMS Administrator Seema Verma said that CMS is “very committed” to work and community engagement requirements. While noting that “an additional public comment period is not legally required,” an additional comment period does not guarantee that implementation of the program will be permitted to proceed. Any subsequent approval by CMS will likely face a legal challenge.
Following the Court’s decision, Kentucky Governor Matt Bevin announced that he would be eliminating dental and vision benefits for an estimated 460,000 Medicaid beneficiaries to save money for the state. Under the Medicaid statute, dental and vision benefits are not mandatory benefits. However, after an outcry from providers and advocates, Governor Bevin has reversed this decision and the state is in the process of reinstating dental and vision benefits for Medicaid beneficiaries.
Opponents of the work and community engagement requirements criticize the administrative cost and complexity of implementation. A new report from Fitch Ratings states that Kentucky’s Medicaid administrative costs increased by more than 40%, which they partially attribute to the implementation of Kentucky Health.