Trump Administration’s First Work-based Medicaid Waiver May Produce Little New Evidence

A new waiver policy intended to promote work by Medicaid recipients drew substantial criticism when it was announced by the Trump administration earlier this week. But will it generate any valuable new evidence of what works?

It is too early to know for sure, but the first approved plan submitted by the state of Kentucky does not seem especially promising.

The Kentucky Plan

The Kentucky proposal, called Kentucky Health, would impose work requirements on adults aged 19-64, with exemptions for certain groups such as pregnant women and the disabled. Failure to fulfill the proposed work requirements would result in a loss of coverage. The proposal also features rising premiums, as well as a substance use disorder program open to all Medicaid beneficiaries (Kentucky has been very significantly affected by the growing opioids crisis).

CMS approved the plan on January 12, authorizing it for five years through September 2023. The demonstration project is expected to start in July, according to state officials, if it is not halted by a lawsuit before then.  If fully implemented, it is expected to reduce the number of people  enrolled in the state Medicaid program by about 100,000, according to state estimates, saving an estimated $2.4 billion over five years, most of it in federal funds.

Unsurprisingly, the plan has drawn significant criticism from liberal advocacy groups, including national organizations like Families USA and the Center on Budget and Policy Priorities, which criticize it for reducing the number of people with insurance in the state.  It has also drawn substantial opposition from state advocates, who say it is just a convenient way for the state’s Republican governor, Matt Bevin, to fulfill a campaign promise to roll back a Medicaid expansion that occurred under his predecessor, Governor Steve Beshear, a Democrat.

Kentucky’s Evidence-building Efforts

Opposition to state efforts like Kentucky’s is not unusual. When states conducted similar welfare demonstrations during the 1980s and 1990s they drew similar criticisms. However, as described in this history by MDRC, those earlier demonstrations were commonly accompanied by rigorous evaluations, many of which generated valuable new information. Many of those studies informed state and federal policy, including welfare reform legislation that was subsequently enacted in 1996.

The value of the Kentucky Health demonstration project seems less obvious by comparison.  According to a 2016 analysis in Health Affairs, it is a rehash of elements already tested in waivers given to other states, particularly Indiana. Its cost-sharing ideas date back even further, to the 1990s.

Moreover, the evaluation methodology described in the Kentucky plan (pp. 57-65) seems to rely primarily on less rigorous pre-post outcomes comparisons, not higher quality random assignment studies like those that were used in the welfare experiments of the 1980s and 1990s. The state indicated that its evaluation plan was preliminary and subject to change, however, so it is possible that it might be made more rigorous as the program is rolled out, but that is far from certain. (Some information on CMS evaluation requirements is available here.)

How serious are these problems?  The broader history of such waivers is mixed and Kentucky is only one state, so it is difficult to know. The state is only the first of at least ten expected to receive approval under the new Trump policy.

By itself, Kentucky is probably not enough to prove that the Trump administration’s waiver policy will produce nothing of value. But it is not an especially strong start.


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