Kentucky cuts Medicaid waiver payments 4% starting Aug. 1

Kentucky's Cabinet for Health and Family Services informed providers in a June 8 letter that Medicaid reimbursement will fall 4% starting Aug. 1. The reduction targets the Home and Community Based Waiver, which serves Kentuckians 65 and older or those who are physically disabled and need a nursing facility level of care; the Michelle P. Waiver, for people with intellectual or developmental disabilities; the Model II Waiver, for people who need ventilator support 12 or more hours a day; and Supports for Community Living. Providers in other sectors are also affected. A letter from the Department for Medicaid Services says the cuts stem from requirements in House Bill 500. According to the Kentucky Center for Economic Policy, the General Assembly provided $691 million less than the department requested to fully fund the benefits.

Joy Baum, whose 26-year-old son has profound autism, has used waiver services to employ a caregiver for 12 years and said the cut means telling that worker, "you don't get a raise, you get a pay decrease." She said the waivers also determine what happens to her son after she is gone. Laura Orsland, who founded the HIVE in Bowling Green, said the cut "is not just a number to us. It's a threat."

Leslie Hoffmann, deputy commissioner of the Department for Medicaid Services, told the Waiver Waitlist Management Subcommittee that nearly 19,000 people were on waiver waitlists as of July 13, with around 1,000 spots available. Her presentation put total annual expenditures for these services at nearly $1.9 billion in 2025. Cabinet Secretary Dr. Steven Stack said the solutions come back to money: "If you shed tears over the size of the Medicaid budget now, some of the ways we could make all of these problems go away would make you shed buckets of tears about how much larger the cost would be."