Kentucky Receives Federal Waiver To Restructure Medicaid Program To Reduce $425M Budget Deficit

Kentucky Gov. Ernie Fletcher (R) on Wednesday announced that CMS has granted initial approval of a waiver that will allow the state to significantly reform its Medicaid program and save an estimated $1 billion over seven years, the Owensboro Messenger-Inquirer reports. Kentucky's Medicaid program currently faces a $425 million budget deficit. The reforms are expected to save $120 million during the first year. Under the waiver plan, dubbed Kentucky Health Choices, the state will group Medicaid beneficiaries into four categories: a general population, children, the elderly and disabled, and beneficiaries with mental retardation. Each group will receive a different health care plan tailored to its specific needs (Covington, Owensboro Messenger-Inquirer, 1/19). Beneficiaries will be required to make copayments for some services and prescriptions. Copays will be based on income and will be between $1 and $10 in most cases. The maximum out-of-pocket cost per beneficiary each year will be $225 for health care services and $225 for prescriptions. Prescriptions will be limited to four per month, but exemptions will be allowed for some chronic diseases. In addition, the plan calls for limits on radiology services and physical, speech and occupational therapy, although the limits could be exceeded if medically necessary, state Medicaid Commissioner Shannon Turner said. The program also will emphasize preventive care by helping to pay for smoking cessation programs, weight-loss programs or gym memberships. In addition, the program will help beneficiaries pay premiums for employer-sponsored private health insurance (Schreiner, AP/Kentucky Post, 1/18). Fletcher in his state budget proposal requested $85 million in immediate Medicaid funds and an additional $258 million in Medicaid funding over the next two years (Deborah, Louisville Courier-Journal, 1/18).