Bevin administration hopes to have new plan for Medicaid expansion ready by end of the year

Working to address the cost of Medicaid expansion in Kentucky, Gov. Matt Bevin’s advisor Mark D. Birdwhistell told members of the business and health care communities Monday that the administration hopes to unveil its plan soon, with goal of receiving approval from the federal government by November.

Mark D. Birdwhistell, advisor to Gov. Matt Bevin on Medicaid, addressing a group at the Kentucky Chamber.

At a meeting of the Kentucky Chamber’s health care policy council meeting, Birdwhistell, currently vice president for administration and external affairs at UK HealthCare, provided context and background for the state’s need to transform the Medicaid expansion program, and noted the state would pursue this transformation by crafting an 1115 demonstration waiver, transitioning from the state’s current kynect system to a state-based marketplace on the federal exchange, and more.

The Medicaid expansion, done through executive order by former Gov. Steve Beshear in tune with the setup of Kentucky’s state-based health exchange through the Affordable Care Act, was paid for fully through federal dollars up to this point.

However, beginning in 2017 the state will have to pitch in five percent of the cost, which according to estimates will amount to $247 million in the next biennium. That amount was approved by the state legislature and governor for the new two-year budget while a new plan is crafted and implemented. Birdwhistell noted Monday that the need for a new structure for Medicaid expansion comes as the state tries to hold down the cost to Kentucky, which could increase to $509 million in the next budget cycle if no changes are made.

Birdwhistell identified transitioning from kynect to a state-based marketplace on the federal exchange as one key way for the state to save money. The state spent more than $330 million on building and implementing kynect, he said, and this is a good compromise, since it keeps some state control over the process while virtually all of the IT and maintenance costs on healthcare.gov will be covered by the federal government.

In terms of future changes to Medicaid expansion in Kentucky, Birdwhistell said an 1115 demonstration waiver will be published in the coming weeks, which will trigger a process that includes two public hearings to get input from Kentuckians. The administration hopes to complete the waiver approval process from federal officials at the Department of Health & Human Services (HHS) before the November elections and any subsequent changes in HHS or Centers for Medicare & Medicaid Services (CMS) administrations.

Overall, Birdwhistell said his goal in this waiver approval process is to work with local, state, and federal stakeholders in order to “keep what’s best for Kentucky.”

When it comes to what we could possibly see from a new structure and what the waiver will entail, Birdwhistell said the plan will likely resemble the model of Indiana’s waiver for Medicaid expansion, though “with a Kentucky flavor.”

Birdwhistell also stated that he has been doing a lot of education about Medicaid and the expansion in his advisory role to the administration – he noted many are still confused about the differences between the state-based health exchange (kynect) and the expansion of the Medicaid program more generally. Kynect, he said, is just the “portal” through which individuals obtain Medicaid and QHP coverage.

Birdwhistell said he hopes this process and the administrations transformation plan will help familiarize people with the differences and why the state spending on the program must be addressed while still providing coverage to Kentucky’s most vulnerable citizens.