Feds approve Kentucky waiver that requires Medicaid enrollees to work, pay premiums

Kentucky has become the first state to win federal approval for a Medicaid waiver that includes work requirements for beneficiaries.

The state’s demonstration project, which the Trump administration approved on Friday, would require able-bodied, nonelderly enrollees to complete 80 hours per month of “community engagement activities” to remain eligible for Medicaid. Those activities could include employment, education, job skills training and community service, according to a fact sheet.

Certain beneficiaries would be exempt from the community engagement requirements, such as pregnant women, full-time students and those considered medically frail.

The waiver also gives the state the authority to require beneficiaries to pay monthly premiums based on their income. Premiums could be as low as $1 per month or as high as 4% of household income. If people who are above the poverty line fail to pay the required premiums, they could be locked out of the Medicaid program for six months.

In addition, the state will implement a tool called My Rewards Account, which provides incentives for beneficiaries to engage in healthy behaviors and community engagement, plus a tool called the Deductible Account, which aims to inform beneficiaries about the cost of healthcare.

The Trump administration’s approval of Kentucky’s waiver comes in the same week that it issued new guidance for states looking to test programs that include work requirements for beneficiaries. 

Indeed, the Centers for Medicare & Medicaid Services said in its approval letter to Kentucky officials that other states should emulate its program. 

"Your substantial work will help inform future state demonstrations seeking to draw on Kentucky's novel approaches to Medicaid reform, and CMS also looks forward to learning from the outcomes of your demonstration project," the letter said.

Editor's note: This article has been updated to add additional details.