jim waters headshotKENTUCKY (8/16/18) — First, the good news: Kentucky’s unemployment rate is among the lowest ever.

Then, bad news: Kentucky’s unemployment rate is among the lowest ever.

How can historically low unemployment rates be bad news?

While more job opportunities than ever exist across the commonwealth with 10s of thousands of positions unfilled in the commonwealth, more Kentuckians fail to take advantage of them, relying instead on government-run programs like Medicaid for their incomes.

Gov. Matt Bevin’s administration from Inauguration Day has made getting able-bodied adults who aren’t pregnant women, full-time students, medically frail or primary caregivers off Medicaid – or at least requiring them to work, train or volunteer – a top priority.

The Trump administration agrees and in January made Kentucky’s Medicaid waiver request the first approved in the nation.

But federal Judge James Boasberg in far-away Washington, D.C., recently ruled against the decision, calling approval of the wavier “arbitrary and capricious,” even though Bevin’s team was very careful to mandate work requirements only for able-bodied adults who aren’t indigent or caregivers.

Boasberg, of course, has the luxury of offering such rulings from his black-robed ivory tower without the responsibility of determining how Kentucky is going to pay for hundreds of thousands of additional Medicaid recipients without affecting other government programs.  

Talk about “arbitrary and capricious.”

An expansion created by the Affordable Care Act resulted in a half-million additional Kentuckians enrolling in Medicaid – far above the 188,000 anticipated by then-Gov. Steve Beshear’s administration.
The cost of providing benefits to able-bodied adults without dependents or disabilities who became Medicaid recipients as a result of that expansion increased from $667 million in 2013 to more than $4 billion in 2015 as enrollment ballooned from 133,000 to 633,000.

Both supporters and opponents agree that around 95,000 recipients who enrolled in Medicaid as a result of the expansion would likely lose coverage under Bevin’s reforms.

This means fewer than one in six able-bodied adults now receiving taxpayer-funded health insurance would drop off the rolls.

Many would cease receiving government benefits by landing real jobs with traditional insurance.

This also means those for and against the reforms acknowledge: even most of the able-bodied adults now in the program will continue receiving Medicaid benefits.

How much more generous can reform get? 

Some opponents of the waiver mistakenly believe many Medicaid recipients who enrolled as part of the ACA’s expansion are working dead-end jobs and just don’t have the income to make ends meet.

However, the President’s Council of Economic Advisers discovered the following regarding able-bodied adult Medicaid recipients in a report released earlier this year:

·         53 percent don’t work any hours
·         60 percent work fewer than 20 hours per week
·         69 percent work fewer than 30 hours
·         78 percent work fewer than 40 hours

Add to this data from the Kentucky Cabinet for Health and Family Services indicating nearly half of all expansion enrollees have no earned income.

All these able-bodied adults lounging around is especially tragic considering the opportunities to work and start a career perhaps have never been greater in the Bluegrass State.

There’s more bad news in that according to the BLS, Kentucky’s labor force participation rate of 59 percent is the nation’s lowest.

But there’s plenty of good news, too.

About 84,000 job openings are expected annually in Kentucky during the next decade, nearly three-quarters of which will demand a high school education or less and 87 percent will require no prior experience.

Past welfare reforms that involved work requirements helped millions of Americans return to the labor force, fill open jobs and even increase the nation’s Gross Domestic Product, making the overall economy stronger and more productive.

That, indeed, is good news.

Let’s give history the chance to repeat itself in Kentucky.

Jim Waters is president and CEO of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. and @bipps on Twitter.

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