Nearly 1 in 3 Kentuckians are covered by Medicaid, the federal-state insurance program for low-income Americans. If you’re not among them, you probably think you won’t be affected by the big bill that the Republican Congress passed for President Trump. Think again. You are likely to be hurt by it, because Medicaid has become such an essential part of Kentucky’s health-care system.
If you’ve heard anything about Medicaid in the big bill, it’s probably the “work requirement,” for able-bodied adults without dependent children to spend 80 hours a month working, performing community service, going to school at least half-time, or a combination of those activities. When Republican Matt Bevin was governor of Kentucky, he tried to impose such rules, but a federal judge in Washington said no, and while Bevin was appealing in 2019 he was ousted by Democrat Andy Beshear, who scuttled the plan.
Drafting of the new national plan was overseen by 2nd District Rep. Brett Guthrie of Bowling Green, as chair of the House Energy and Commerce Committee. He said on X that the panel “made sure that able-bodied Americans who get free health care, if they’re able to work, work for it, like every other American has to get up and go to work every day for their health care. It’s only fair that people who are able to work, do work.”
That argument appeals to Americans who have at least a mild resentment of people who get something from the government by doing little or nothing. But in practice, work requirements have saved money mainly by disqualifying Medicaid beneficiaries who fail to document their qualifying activities or otherwise fall short on paperwork. That happened in the only such program that was fully implemented, in Arkansas, and projections for the Kentucky program predicted likewise.
Republicans in the General Assembly will try to solve that problem, said state Sen. Julie Raque Adams, R-Louisville, co-chair of the legislature’s Medicaid Oversight and Advisory Board. “Nobody should be cut off because of a paperwork error,” she said on KET’s “Kentucky Tonight” Monday. She said legislators will “ask some really hard questions” about “how to proceed in this new world order,” and try to improve beneficiaries’ health.
The work requirement was the most-cited reason that the big bill would lead to closure of many rural hospitals, by reducing the number of Medicaid beneficiaries and thus the revenue on which most hospitals depend. But in Kentucky, the bill’s biggest effect on hospitals will be more direct, and it seems likely to force many of them to cut back on services or even close.
The bill wipes out most of a funding scheme that the legislature has used to help Kentucky hospitals: raise the “provider taxes” they pay, use the money as a state match for federal funds, and use the windfall to increase hospitals’ Medicaid payments, which usually don’t cover the cost of care. Some senators called that “money laundering,” and the Senate limited it. The House passed the revised bill under deadline pressure from Trump.
The change made the Kentucky Hospital Association withdraw its support for the bill. The Senate added a $50 billion fund to help hospitals, and that will bring Kentucky hospitals at least $100 million a year. But the state’s rural hospitals are getting $1 billion a year from the current provider-tax scheme, “so $100 million is not gonna cut it,” KHA President Nancy Galvagni said on “Kentucky Tonight.” She told a legislative committee in January that without the scheme, Kentucky hospitals would be operating at a 6 percent negative margin.
Kentucky is one of the states that may lose the most from the big bill. The Kaiser Family Foundation estimates that the state will get $25 billion less in federal Medicaid money from 2028 to 2037, a decrease of 17 percent. Most of the hurt will be on rural hospitals; based on the number that get “disproportionate share payments” because they are so Medicaid-dependent, Kentucky will have more rural hospitals at risk of closure than any other state.
Just how much Kentucky stands to lose is an open question, because Democrats use worst-case scenarios, the nonpartisan Congressional Budget Office has a sketchy record of predicting the effects of health-care legislation, and most Republicans don’t want to talk about it. Guthrie didn’t respond to repeated requests for an interview, and Sen. Mitch McConnell said of his complaining constituents, “They’ll get over it.”
Not if their hospital closes or drastically reduces its services. However, the big bill may have little immediate political impact, because the work requirement doesn’t take effect until 2027 and the Medicaid funding changes are set for 2028. Congress and the legislature could ease the blow, especially for hospitals, which have a strong lobby. But who lobbies for the poor? And do legislators listen?
• • •
See the latest report — June — for those covered by Medicaid in each county here.
See the permanent landing page where reports can be accessed here.
