Kentucky becomes first U.S. state to implement Medicaid work requirements

WASHINGTON (Reuters) – Kentucky on Friday became the first U.S. state to receive approval from the federal government to implement work requirements in Medicaid, a fundamental change to the 50-year-old government health insurance program for the poor.

The approval came one day after the Centers for Medicare and Medicaid Services issued policy guidance allowing states to design and propose test programs that require work or jobs training as a condition of receiving Medicaid, which has never had such conditions attached.

Kentucky’s waiver, which was submitted for federal approval in 2016, requires able-bodied adult recipients to participate in at least 80 hours per month of “employment activities,” which include jobs training, education and community service.

It also requires most recipients to pay a premium based on income and locks out some people who miss a payment or fail to re-enroll for six months.

Democrats and health advocacy groups blasted the CMS policy on Thursday and said it would make it more difficult for the most vulnerable Americans to have access to healthcare services. The Southern Poverty Law Center liberal advocacy group said it plans to file a legal challenge against the administration.

Kentucky, along with 30 other states, expanded Medicaid to those making up to 138 percent of the federal poverty level under the Affordable Care Act, former Democratic President Barack Obama’s signature domestic policy achievement commonly called Obamacare.

More than 400,000 Kentucky residents gained health insurance through the program, the highest growth rate of Medicaid coverage of any state.

Kentucky Governor Matt Bevin has said the program has become financially unsustainable under Obamacare, although the federal government covers the majority of its cost. The waiver is projected to reduce the number of people on Medicaid by nearly 86,000 within five years, saving more than $330 million in the process.

CMS administrator Seema Verma helped design Kentucky’s waiver. She recused herself from the approval process to avoid a conflict of interest.

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