LEXINGTON, Ky. — Republicans in the Kentucky legislature unveiled and passed significant changes to the state’s Medicaid program in the final hours of Friday, the last day they could pass a bill able to withstand the governor’s veto.

Those changes include a new work requirement, a provision tying the state more closely to the policy of the federal government and another section limiting Democratic Gov. Andy Beshear’s administration from making significant changes to the Medicaid program.

The bill, House Bill 695, was changed via a substitute introduced in a quickly-called committee meeting Friday night around 9:15 p.m. Some of the major changes were new to the public and legislators as of their introduction at the meeting, which took place in a conference room just steps away from the Senate floor.

It passed the Senate around 10:40 p.m. on a party line vote and did the same in the House less than an hour later.

One of the biggest changes the bill makes is the addition of the word “mandatory” for an existing Medicaid work requirement program for able-bodied adults with no dependents who have been on Medicaid for more than a year.

The bill mandates the Cabinet for Health and Family Services implement a mandatory “community engagement waiver program,” which mirrors aspects of previous work requirements. That obligation would be fulfilled if the person works at least 20 hours per week or participates in a state job placement program.

That means those Kentuckians on Medicaid without dependents must prove they meet those requirements to get health care.

The bill also creates a Medicaid Oversight and Advisory Board tasked with various oversight duties. Eight of the 10 voting members of the board will be appointed by Republican leadership while the remaining two will be appointed by Democratic House and Senate leaders.

It explicitly bars the governor from going beyond what’s required by the federal government — though President Donald Trump has said he won’t touch Medicaid, Republican leaders in Congress seek to cut $880 billion from the next federal budget.

There was no estimate included in the bill, or any accompanying fiscal note, projecting the cost of implementing or enforcing a mandatory work requirement.

Kentuckians are eligible for Medicaid if they make at or below 138% of the federal poverty level, which is currently $15,650 for a single person and $32,150 for a family of four.

Many elements of the bill were included in a committee substitute that had been approved on Wednesday, but the new substitute made the work requirement “mandatory.”

Republicans say the moves are all sensible given the changing federal landscape and the need to encourage more Kentuckians to work. GOP Senate President Robert Stivers also warned of the potential for fewer funds coming from Washington, D.C., to fund Medicaid.

“Through the expansion that the governor has done, and it’s one of the richest Medicaid programs in the nation, what we are seeing is that Medicaid is growing faster than what our receipts are growing. We can’t afford to do that, especially if the federal government changes a lot of different things, which puts us in a position of not having as many federal dollars come down to us,” Stivers said.

On the workforce participation front, he cited a recent trip to his local Pizza Hut.

“Why is it that an able bodied person should not be working? I went to Pizza Hut in my hometown the other night. They could not open the dining room because they didn’t have people who were willing to work… People are staying at home because the benefits are so rich it’s a disincentive to work.”

Democrats, during the debate on the floor, warned the work requirements would lead to Kentuckians getting off Medicaid due to the paperwork burden of regularly proving you’re working or seeking a job.

“We talk about work requirements, and I want us to know and understand what that really means. ‘Work requirements’ really mean making vulnerable folks who need our assistance to take time from their work to basically prove to the government, to us, that they need assistance and care and that they deserve health care,” Sen. Keturah Herron, a Democrat, said.

Democratic Sen. David Yates said the work requirements section of the bill reminded him of former GOP Gov. Matt Bevin’s requirements, which were eventually blocked by a U.S. district judge.

Kentucky Center for Economic Policy Executive Director Jason Bailey, an opponent of work requirements, agreed with Yates’ assessment.

“This is Matt Bevin’s Medicaid plan, which by his own numbers would’ve kicked nearly 100,000 Kentuckians off health care. It’s also illegal, having been struck down twice by the courts,” Bailey wrote in a statement.

Beshear has advocated for expanding Medicaid throughout his two terms as governor. In 2022, he expanded the state’s Medicaid program to cover vision, dental and hearing care. The move has frustrated Republicans who say the program can’t fully bear the cost.

If House Bill 695 were law at the time, Beshear could not have expanded Medicaid coverage in the way that he did without the explicit approval of the legislature.

The governor and his father, former Gov. Steve Beshear, have also championed the expansion of Medicaid the elder Beshear oversaw after the passage of the Affordable Care Act. As a result of the expansion, the percentage of uninsured Kentuckians dropped from 14% to roughly 5%.

The bill also added several oversight functions regarding Medicaid spending on behavioral health and substance use disorder treatment. It requires the Department for Medicaid Services to report to the legislature on any service where the utilization rate or expenditures increase by more than 10% over the previous calendar year.

It also requires the Cabinet for Health and Family Services to develop a behavioral health and substance use disorder treatment services scorecard for services and providers.

Kentucky uses Medicaid to cover substance use disorders at a particularly high rate. Led by the prodigious provider Addiction Recovery Care, Kentucky has the highest number of residential treatment beds per capita in the country.

The bill has an emergency clause, which means it takes effect immediately upon passage. The bill states that’s because “ongoing budget negotiations at the federal level, including over federal financial support for the Medicaid program, combined with significant expansion of the Commonwealth’s Medicaid budget over the last decade.”

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