Updated Estimate of Impacts of Kentucky’s Medicaid Work Experiment on Health Centers

Since the Trump administration announced one year ago that it would grant permission to states to require many Medicaid recipients to work, volunteer or train for a job as a condition of coverage, researchers at the George Washington University Milken Institute School of Public Health (Milken Institute SPH) have been tracking the effects of these work requirements. A new report published on GWHealthPolicyMatters presents their latest estimates of how Kentucky’s Medicaid work project will impact the state’s community health centers.

The Milken Institute SPH analysis shows that as many as four in 10 adult Medicaid patients served by health centers would lose coverage and total patient care capacity could decline by up to 10 percent. The new analysis is the second by Milken Institute SPH researchers to estimate how Kentucky’s Medicaid work project will impact the state’s community health centers.

Kentucky was the first state to win approval for its Medicaid work demonstration project after the Trump administration first announced that it would grant permission to states for such projects under Medicaid Section 1115 one year ago. The state’s proposal was stuck down in late June 2018. After the proposal was reapproved by the federal government in November 2018, it was again challenged in court.

In reapproving Kentucky’s work experiment proposal, the Centers for Medicare and Medicaid Services (CMS) explicitly requires Kentucky officials to inform beneficiaries losing Medicaid coverage about community health centers, which by law offer affordable primary health care regardless of ability to pay. “Given this apparent reliance by federal officials on health centers to cushion the impact of large-scale coverage losses, a critical question becomes the potential impact of Medicaid enrollment reductions on health centers’ capacity to continue their current service levels or even expand capacity to meet the needs of a growing uninsured population,” explains Sara Rosenbaum, JD, a widely respected authority on Medicaid and the Milken Institute SPH’s Harold and Jane Hirsh Professor of Health Law and Policy.

In 2017, Kentucky health centers served 461,552 patients–nearly 1 in every 9 (10.5 percent) of Kentucky residents, according to Uniform Data Service and U.S. Census Bureau data. That year, health centers derived 43 percent of their total operating revenue from Medicaid.  

“Because Medicaid represents such a significant proportion of health center funding in Kentucky, deep eligibility reductions under the experiment could be expected to trigger significant revenue losses that, in turn, would cause major reductions in health care capacity, clinical and patient support staffing and ultimately, the number of patients served,” explains Peter Shin, PhD, MPH, director of the Geiger Gibson Program in Community Health Policy at the Milken Institute SPH.

The new estimate is based in part on a more recent impact analysis of the impacts of the Medicaid work requirements in Kentucky published in GWHealthPolicyMatters which estimates that 86,000 to 136,000 adults will lose Medicaid in the first year that work requirements are implemented. Rosenbaum, Shin and Jessica Sharac, a research scientist at Milken Institute SPH, combined these Medicaid loss estimates with updated data from community health centers derived from the 2017 Uniform Data System information reported to the Department of Health and Human Services by all health centers. The Milken Institute SPH team estimated the impacts on health center revenue, staffing, and patient care capacity.   

“Updated Impact Estimates Show that Kentucky’s Medicaid Work Experiment Could Cause as Many as Four in Ten Adult Medicaid Patients Served by Health Centers to Lose Coverage – and Up to a Ten Percent Decline in Total Patient Care Capacity,” by Shin, Sharac and Rosenbaum, is published exclusively on GWHealthPolicyMatters and available below.