Orlando Harmon
Medicaid is a public health insurance plan for low-income Americans that covers around 72 million people, or about one-fifth of the population. Kentucky has been one of the most successful states in using the Affordable Care Act (ACA) to expand healthcare access to its residents. As of October 2024, 1,385,144 Kentuckians were covered by Medicaid/CHIP, with 488,080 of them covered by ACA Medicaid expansion. This article will explore the proportion of Kentucky residents who use Medicaid as their primary insurance, the impact of Medicaid expansion in the state, and the potential consequences of funding cuts to the program.
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What You'll Learn
Medicaid funding sources
In Fiscal Year (FY) 2019, the federal share of Medicaid spending was 65% nationally. However, federal funding for Medicaid is distributed among the states based on a formula that provides higher reimbursement to states with lower per capita incomes relative to the national average. This formula is reflected in the Federal Medical Assistance Percentage (FMAP), which has a statutory minimum of 50% and a maximum of 83%. In FFY 2023, federal spending on Medicaid totalled $606 billion, while states paid $274 billion, accounting for 69% and 31% of the total $880 billion spent, respectively.
Medicaid is a major source of federal financing for costs that might otherwise be borne solely by state and local governments, individuals paying out of pocket, and providers supplying care at free or reduced rates. It is both a spending item and the largest source of federal revenues for state budgets. In state fiscal year 2023, Medicaid accounted for 30% of total state spending and 57% of expenditures from federal funds.
Kentucky has a relatively high FMAP of 70.5% due to its low per capita income. In 2017, 64% of all federal funds Kentucky received were for Medicaid. Capping Medicaid funding could put certain programs designed to improve the quality of life for people with disabilities at risk, and reduce the state's ability to respond to public health crises.
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Medicaid eligibility
Medicaid is a joint federal and state program that provides health coverage to Americans who fall under certain eligibility criteria. While the federal government requires states to cover specific groups, each state has its own eligibility requirements and scope of health services offered.
Who is Eligible for Medicaid?
Mandatory eligibility groups include low-income families, qualified pregnant women and children, and individuals receiving Supplemental Security Income (SSI). States may also choose to cover other groups, such as individuals receiving home and community-based services and children in foster care.
Income Eligibility
Eligibility is largely determined by income level, with each state setting its own income thresholds for eligibility. The Affordable Care Act established a new methodology for determining income eligibility based on Modified Adjusted Gross Income (MAGI), which considers taxable income and tax filing relationships. This replaced the former process, which allowed for income disregards that varied by state and eligibility group.
Kentucky has successfully expanded Medicaid coverage and reduced its uninsured rate by adopting a state-run health insurance marketplace. As of October 2024, 1,385,144 Kentuckians were covered by Medicaid/CHIP, with 488,080 covered by ACA Medicaid expansion.
Specific eligibility levels in Kentucky include:
- Children up to age 1 with family income up to 200% of the federal poverty level (FPL)
- Children ages 1 to 18 with family income up to 64% of FPL
- Children and their caretaker relatives with family income less than 185% of the poverty level
- Pregnant women with income less than 250% of the poverty level
- Single adults with income below 56% of the federal poverty level
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Medicaid and rural areas
Medicaid is an important source of health care coverage for the 60 million Americans living in rural areas. Nearly a quarter of individuals under the age of 65 in rural areas are covered by Medicaid. This is particularly the case in rural areas where residents are less likely to have jobs with health coverage and are more likely to be uninsured or underinsured. They also face numerous challenges in accessing the necessary healthcare. People living in rural areas travel farther for appointments and are more likely to miss out on needed healthcare because of transportation difficulties.
In Kentucky, 40% of all children are covered by Medicaid, including 52% of children with special healthcare needs. 67% of nursing home residents in Kentucky are covered by Medicaid, and 49% of Medicaid long-term care spending in Kentucky is for nursing home care. Nearly half of the people in Kentucky live in rural areas, which is higher than the national average of 19%. People who live in rural areas are more likely to be covered by Medicaid.
Kentucky has been one of the most successful states in using the Affordable Care Act (ACA) provisions to reduce its uninsured rate, both by expanding Medicaid and adopting a state-run health insurance marketplace. As of October 2024, 1,385,144 Kentuckians were covered by Medicaid/CHIP. In 2017, 64% of all federal funds Kentucky received were for Medicaid. Capping Medicaid funding would reduce federal assistance for Kentucky to maintain its current Medicaid program.
Medicaid plays a particularly important role in providing coverage in rural areas, and gains in Medicaid coverage have helped reduce the uninsured rate in these areas. Rural populations face longstanding and significant disparities in their health and access to healthcare. They are more likely to report poorer physical and mental health and have higher rates of cigarette smoking, obesity, and physical inactivity compared to their urban counterparts. Medicaid helps fill the gap in private coverage, covering nearly one in four non-elderly individuals in rural areas, compared to 22% in urban areas and 21% in other areas.
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Medicaid and nursing care
In 2024, 1,385,144 Kentuckians were covered by Medicaid/CHIP, with 488,080 covered by ACA Medicaid expansion. Kentucky has been one of the most successful states in using the Affordable Care Act (ACA) provisions to reduce its uninsured rate, by expanding Medicaid and adopting a state-run health insurance marketplace.
Medicaid is a joint federal and state program that provides funding for nursing home care for those who require that level of care and meet the financial eligibility requirements. The financial eligibility criteria consist of income and asset limits, which change annually and vary based on marital status and state of residence. For example, in Florida, the income limit for Medicaid-funded nursing home care is $2,901 per month in 2025. While Medicaid will pay 100% of the cost of nursing home care, residents must contribute nearly all of their income towards these costs. This is called a Patient Liability, and residents are permitted to keep a small Personal Needs Allowance (PNA) from their income. Spousal Protection Laws also protect income and assets for the non-applicant spouse to prevent spousal impoverishment.
Medicaid coverage of Nursing Facility Services is only available when other payment options are unavailable and the individual is eligible for the Medicaid program. Nursing facilities must provide or arrange for nursing or related services and specialised rehabilitative services to attain or maintain the highest practicable physical, mental, and psychosocial well-being of each resident. Medicaid NF services are available for individuals aged 21 or older, while services for individuals under 21 are a separate, optional service.
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Medicaid expansion
Kentucky has been one of the most successful states in using ACA provisions to reduce its uninsured rate, both by expanding Medicaid and adopting a state-run health insurance marketplace. In 2017, nearly two-thirds (64%) of all federal funds Kentucky received were for Medicaid. In 2024, the number of Kentuckians covered by ACA Medicaid expansion was 488,080.
However, it is important to note that not all states have expanded their Medicaid programs, and eligibility rules differ between states. Adults in these states with incomes below 100% of the federal poverty level may not qualify for Medicaid, creating a coverage gap.
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Frequently asked questions
As of October 2024, there were 1,385,144 Kentuckians covered by Medicaid/CHIP, with 488,080 covered by ACA Medicaid expansion as of June 2024. This amounts to over 40% of the population in rural counties in Eastern Kentucky.
Medicaid covers 72 million Americans, about one-fifth of the population. Of the 218 seats Republicans control in Congress, 26 are in districts where more than 30% of the population is covered by Medicaid.
Nearly two-thirds (64%) of all federal funds Kentucky receives are for Medicaid. If Kentucky dropped the Medicaid expansion, the state would forgo an additional $29.9 billion over the 2020-2029 period, and by 2029, 557,000 Kentuckians would lose Medicaid coverage.
