BEVERLY, Kentucky — When a federal judge struck down Kentucky Gov. Matt Bevin’s plan to force Medicaid enrollees to work for benefits in June, Bevin responded by abruptly cutting vision and dental coverage for nearly 500,000 low-income people, claiming the state had no way to pay for them.

The move threw Kentucky’s health system into disarray, and patients arrived at dental clinics unaware that they no longer had coverage.

“I had abscesses that ate into the bone,” said Susan Wells, a patient at the nonprofit Shawnee Christian Healthcare Center in West Louisville. “I'm getting dentures on the top, which is embarrassing to say in front of people, because [it] shows how poor you are when you don't have teeth.”

Democrats and healthcare advocates criticized the move as vindictive and petty.

“It was clear to us that that [the governor’s] decision was punitive, that it was in retaliation to the court case not going the way that he wanted to, and he chose to take that out on almost half a million Kentuckians who use that coverage to keep them healthy so that they can work,” said Angela Koch, the state outreach director for an advocacy group Kentucky Voices for Health.

But the Bevin administration insisted the cuts were an “unfortunate consequence” of the judge’s decision to reject the state’s plan to implement a work requirement for some people on Medicaid, a waiver that had been approved by the federal government back in January.

Trumpcare

Gov. Bevin’s desire to shake up Medicaid reflects a growing movement by the Trump administration to shrink the federal government’s role in healthcare. Trump’s economic advisory council published a report this month extolling the benefits of implementing work requirements, and Kentucky has been seen as a test case by the administration to see its ideas about entitlements play out.

Susan Wells, of Louisville, was one of nearly 500,000 Kentuckians who had their dental and vision benefits cut by Gov. Bevin on July 1. The benefit cuts came after a judge ruled against Bevin's plans to put work requirements and premium increases on Medicaid enrollees. (Photo: Daniel Vergara/VICE News)

"Non-disabled working-age adults have become increasingly reliant on welfare and experienced stalled employment growth, in part because of the disincentives welfare programs impose on increasing one’s own income," the White House Council of Economic Advisers argues in the paper.

A longtime critic of the Affordable Care Act, Bevin made ending the ACA’s Medicaid expansion one of his signature campaign promises.

Since taking office in 2015, he developed Kentucky HEALTH (Helping to Engage and Achieve Long-Term Health), a waiver that would drastically change how many people can remain on the health insurance program he has called a “dead-end entitlement trap.”

At the heart of the Bevin administration’s waiver is a work requirement for able-bodied adults making up to 138 percent of the federal poverty level. If you’re between 19 and 49 years old in Kentucky, you would have to prove you’ve worked 80 hours a month to be entitled to medical care, and log those hours online.

The plan also puts in place additional barriers to dental and vision care. Currently, people on Medicaid are covered for basic services and annual check-ups. The new system asks that Medicaid expansion recipients earn virtual credits — through things like community service, getting a GED, or completing a wellness program — that convert into dollars that can then be used to cover those preventive health services.

Medicaid expansion recipients will also face higher premiums under the program, increasing to up to 4 percent of household income — the highest premiums ever permitted in the Medicaid program.

“It’s easy for a lay person to say a $9-a-month premium isn’t a big deal, but what people forget is we’re talking about incredibly impoverished citizens,” said Koch, who noted that patients who fail to pay those premiums will face lockout periods with no coverage for 6 months.

Seema Verma, the head of the Centers for Medicare & Medicaid Services (CMS), worked to help craft the Kentucky proposal, which has formed the model for similar proposals in at least 11 other states. Verma says she recused herself from approving the Kentucky proposal.

“Toxic charity”

By its own admission, Kentucky estimated that 95,000 people would fall off Medicaid as a result of the waiver. That fact was seized upon by D.C. District Court Judge James Boasberg in June when he struck down the waiver. Boasberg expressed concerns that the plan undermines the inherent purpose of Medicaid, when he sided with the 16 Kentucky residents who brought a class action lawsuit against CMS.

Among those residents is Sara Woods, 40, who earns around $10 an hour working odd housekeeping jobs for neighbors in Floyd County and had never had health insurance until the Affordable Care Act was enacted.

“Poor people have health problems like rich people, but I mean we just can’t pay for it like rich people”

“Everybody should be treated the same. Poor people have health problems like rich people, but I mean we just can’t pay for it like rich people,” she said.

When the Medicaid expansion kicked in, she was able to get suboxone treatment for a heroin addiction, and access basic preventive medical and health services as a result. “We work hard every day and don’t want handouts,” Woods added. “That’s how people were raised around here. To work for whatever, you know.”

It’s unclear at this stage if the judge’s ruling on Kentucky will have any impact on the four other states — including Arkansas, Indiana and New Hampshire — that have work requirement waivers already in play.

The debate at the heart of the battle over work requirements is a philosophical fight over what Medicaid is: For some, it’s a health insurance program where the more people you have insured, the better. For others, it’s a welfare trap, so it should have as few recipients as possible.

“I think that there is dignity in work,” said Rep. Addia Wuchner, a Republican congresswoman representing a district in Northern Kentucky. “And you know so often I say that sometimes our charity becomes toxic to people in our wanting to help them sometimes. We've hurt them. We've hurt them in a way that we didn't even realize.”

The “pull them up by their bootstraps” notion is outmoded, for many in the health advocacy space. The Kaiser Family Foundation estimates that at least six out of 10 Medicaid recipients are already working, and most people on Medicaid who aren’t in employment are looking for work, disabled, or caring for a child or family member.

“A lot of people felt insulted by that,” said Hasch, who has been fighting against the governor’s proposals, and rejects argument that providing health benefits to people is harmful. “The Medicaid expansion population by definition is already the working poor. That is why they couldn't qualify for standard Medicaid - because they're making too much.”

“We’ve got some of the same problems that Third World countries do”

There are serious doubts as to how these work requirement programs will be implemented and how the state will possibly be able to enforce the rules. Many of the people we talked to in rural Kentucky didn’t have access to the internet, or couldn’t afford internet plans as part of their cell phone services.

“We’ve got some of the same problems that Third World countries do. The geographic area just has a lot of barriers here, and some people don’t understand that,” said Dr. Bill Collins, former president of the Kentucky Dental Association and current clinic director of the Red Bird Mission in Eastern Kentucky. ”Many of the patients don’t have cell phones, they don’t have internet service. And many of them can’t afford it, so it’s really hard for them.”

The situation in one state where work requirements have come into play has already cast doubt on the efficacy of work requirements. Only 4 percent of Medicaid recipients in Arkansas who were expected to record their June work hours online did so, according to Arkansas Human Services.

Kentucky ranks near the bottom of the states for almost every health indicator — from smoking and obesity, to diabetes and heart disease. It recently came in 36th for dental health, and the American Dental Association report on Oral Health and Well-Being in Kentucky state found that 52 percent of patients avoid dentists due to cost and lack of insurance.

The state is already grappling with a highly publicized pension debt crisis - leading to teacher protests and verbal spats between unions and the Republican Legislature — and it has a significant $330 million shortfall in its Medicaid fund.

Kentucky’s Department of Health says the waiver will save around $331 million.

But critics of the governor’s plan say any savings the administration might achieve will be undermined by the multimillion-dollar cost of implementing the waiver, and the higher costs incurred when patients who’ve lost their coverage invariably return to the emergency room.

Kentucky announced on Thursday it is working with CMS to address the court’s concerns, indicating it hopes to get approval to roll out the changes to Medicaid by September 1.

Governor Bevin didn’t respond to repeated attempts for comment.