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Kentucky expanded Medicaid eligibility by executive order to persons with annual incomes up to 138% of the federal poverty level ($27,310 for a family of three) beginning in January 2014. The federal government will pay 100% of the state’s additional cost for the expansion through 2016. However, the state is required to begin paying 5% of the costs beginning in 2017, rising in steps each year to 10% in 2020. 
Original projections of the number of Kentuckians who would be eligible for Medicaid under the expansion have proven to be substantially low. Originally, the Kentucky Cabinet for Health and Family Services estimated 164,000 additional Kentuckians would be eligible under the Medicaid expansion in FY 2014, and that number would grow to more than 209,000 by 2017 and beyond. Currently, there are more than 443,000 Kentuckians enrolled in Medicaid under the expansion. 
The cost of the Medicaid expansion in the recently enacted 2016-2018 state budget is $74 million in FY 17 and $173 million in FY 18 for a total of $247 million over the biennium. These costs are estimated to rise to more than $500 million in the next biennium. In an effort to address these growing costs, the Governor has submitted a waiver request to the federal Department of Health and Human Services to allow Kentucky to make a number of changes to the Medicaid program, including the imposition of monthly premiums and a community service requirement for selected populations. The Kentucky Chamber will monitor the progress of the proposed waiver by the Governor and commends the administration for tackling the challenges of Kentucky’s Medicaid program.  
The Kentucky Chamber, since the publication of its initial “Leaky Bucket” report in 2009, has advocated that the Medicaid program be sustainable to protect critical state investments in education and other vital programs. 
The Governor’s proposal will begin an important public dialogue on this issue, and we will be calling on our members to share their views about the best way forward. We believe it is important to have input from all sectors, especially those representing the health care community.