(Reuters) For nearly three years, Democrats and former President Barack Obama pointed to Kentucky as one of the Affordable Care Act’s biggest success stories.
A poor, rural state that straddles the North and South, Kentucky was an early adopter of the healthcare law commonly known as Obamacare and saw one of the country’s largest drops in the uninsured rate.
Now Kentucky is poised for a new distinction: to be the first state to save money by reducing the number of people on Medicaid, the government health insurance program for the poor and disabled and a central tenant of Obamacare.
If successful, Kentucky would provide a roadmap for other states who are worried about paying an increasing share for people on Medicaid.
A new Republican health law that passed the U.S. House of Representatives on Thursday, along with state initiatives like Kentucky’s, would dramatically change the national healthcare system and cut more than $800 billion from Medicaid over the next 10 years.
The Republican bill still faces a long road ahead in the U.S. Senate and its final passage is far from assured, making initiatives like Kentucky’s all the more important.
Kentucky has proposed to lessen its financial burden before it grows by reducing the number of residents on Medicaid by nearly 86,000 within five years, saving more than $330 million in the process.
Kentucky’s plan also calls for new work requirements for able-bodied adults to get insurance. Plus, it would establish new fees for all members based on income and lock out some people who miss a payment or fail to re-enroll.
By following these proposed rules, Kentucky believes Medicaid enrollees will over time graduate from Medicaid to private and employer insurance plans.
“One of the most remarkable lies that has perpetrated in recent years in the healthcare community in America is that expanded Medicaid was working well in Kentucky,” Republican Governor Matt Bevin, who is leading the state effort, told Reuters from the governor’s mansion in Frankfort, Kentucky.
That view is in line with President Donald Trump’s administration, which has criticized Obamacare’s Medicaid expansion and urged states to pursue similar Medicaid reforms to what Kentucky is now attempting.
“If Kentucky is successful, you’ll see this spread through the more conservative-leaning states. It’s possible even a Democratic blue state could do it,” said George Huang, director and senior municipal healthcare research analyst at Wells Fargo Securities. “It’s the flexibility that some states are seeking.”