Best practices for a better Kentucky: More work, less welfare

Editor’s note: The Bluegrass Beacon is a weekly syndicated newspaper column posted on the Bluegrass Institute’s website after appearing in publications statewide.

The great irony arising out of Covid’s lingering effect is that businesses struggle to fill positions while many able-bodied adults sit it out, unwilling to forego their government benefits by returning to the workforce.

It’s a dilemma Kentucky must solve to take full advantage of opportunities such as the thousands of jobs being created by new electric vehicle battery plants being built in Hardin and Warren counties.

Currently, around 180,000 open positions exist in Kentucky; how much sense does it make to continue policies which disincentivize employment?

The Foundation for Government Accountability (FGA) reports Kentucky’s Medicaid program has “exploded in recent years” – increasing by over 150%.

Meanwhile, the labor force participation rate has dropped by 11%; nearly half of all adults in the commonwealth are now “sitting on the sidelines.”

This isn’t what then-Gov. Steve Beshear predicted in 2013 while announcing his unilateral decision to take advantage of the federal Affordable Care Act allowing states to expand Medicaid eligibility to include individuals who could work but don’t.

“By expanding Medicaid, Kentucky will come out ahead in terms of both health outcomes and finances,” Beshear promised.

Yet there’s little indication that the expansion positively impacted either.

The latest America’s Health Rankings rated Kentucky 44th in overall health while over 600,000 able-bodied adults have enrolled in the Medicaid expansion—more than triple the number Beshear’s administration predicted.

Beshear’s son, current Gov. Andy Beshear, lashed out during the 2019 gubernatorial campaign at incumbent Gov. Matt Bevin’s proposal to require some able-bodied Medicaid recipients to get a job, enroll in school or volunteer to keep their benefits.

The younger Beshear warned that Bevin’s plan would have resulted in thousands of people losing Medicaid coverage.

Which is absolutely as it should be.

Able-bodied adults who get a job will – and should – come off Medicaid as they gain access to employer-provided health insurance or purchase their own low-to-no-cost plan on the state’s exchange.

The elder Beshear’s decision to expand Medicaid not only did nothing to incentivize individuals to transition off the public dole and into private coverage, but it’s also a roadblock to them doing so.

After Kentucky expanded Medicaid eligibility, the federal government made a type of private health coverage available on the exchange known as free or low-cost “silver plans” for working people who need a bridge between Medicaid and employer-provided insurance.

However, because Kentucky had chosen to expand eligibility for the government-run program, anyone who’s on – or eligible for – Medicaid was banned from accessing these private plans.

Despite what opponents of reform claim, there’s no evidence that allowing Medicaid recipients to get a job or earn more will cause them to lose access to health care or coverage.

Kentucky offers transitional Medicaid assistance for at least six – and up to 12 – months to families who might otherwise lose their eligibility because of an increase in income.

In fact, since the pandemic’s beginning in early 2020, due to federal law, not a single American has been kicked off Medicaid because of their income.

“What have the results been?” FGA’s Sam Adolphsen asked while testifying at the first meeting of the Kentucky General Assembly’s newly formed Benefits Cliff Task Force in July. “Are people rushing to work like never before, like ‘now I won’t lose my benefits so I can go get that extra job’? Has it solved that problem?”

“It hasn’t, of course,” Adolphsen added. “We have more people than ever sitting on the sidelines not working, despite over two-and-a-half years of not being able to take someone off Medicaid because of their income. So, the solution isn’t more welfare; it’s more work.”

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free market think tank. Reach him at jwaters@freedomkentucky.com and @bipps on Twitter