By: Keely Doll Louisville Courier Journal
Correction: A previous version of this story misidentified the CEO of Family Health Centers. His name is Bart Irwin.
With possible cuts to Medicaid on the line, Louisville residents and health professionals are sounding the alarm about how funding reductions could affect more than a million Kentuckians.
In February, House members passed a budget resolution that would task the Committee on Energy and Commerce with making $880 billion in funding cuts over 10 years. The committee oversees $25 trillion in spending, the vast majority of which goes toward Medicaid and Medicare.
With billions to cut and other programs off limits, experts say the majority of the reductions could hit Medicaid, the joint federal and state program that provides health insurance to low-income citizens.
Such cuts could mean massive changes for states, like Kentucky, that receive billions of federal dollars each year to support Medicaid. Louisville residents and providers say cuts to Medicaid could limit services, remove benefits and results in layoffs across the health care industry.
After the House resolution passed, the Louisville Democratic Party held a protest outside Sen. Mitch McConnell’s Louisville office, calling for the reinstatement of federal jobs, the removal of Elon Mush as a special advisor to President Donald Trump and the protection of Medicaid. Beth Thorpe, communications chair for the Louisville Democratic Party, said people were “terrified” about possible cuts to Medicad.
“That means elders don’t have money for nursing homes,” Thorpe said. “That means children don’t have health insurance. Here in Kentucky, that means people who have insurance through Kynect (a state benefits program) do not have health insurance anymore.”
Frankie Moore, a protestor, said reductions to government programs and services like Medicaid target the most vulnerable in society.
“I don’t think people understand the percentage of people that rely on Medicaid in this country,” Moore said.
How much is spent on Medicaid in Kentucky?
Nearly 1.5 million people in Kentucky are enrolled in Medicaid — accounting for 28% of the state’s population, according to a 2024 fact sheet from KFF, a nonpartisan health policy research organization.
As a joint program, the federal government matches at least 50% of state spending on Medicaid. But in some less wealthy states, the federal government matches a higher percentage.
Kentucky ranks fifth among states for the highest match rate, with the federal government providing about 71% of funding for the program. In fiscal year 2023, Kentucky state government spent $3.3 billion on Medicaid, while the federal government spent over $13 billion, according to KFF.
Hospitals, community health centers and free clinics rely on Medicaid to cover costs for both insured and uninsured patients. Family Health Centers, a primary care provider that operates six locations in Louisville, said out of the almost 40,000 patients it saw last year, 52% were insured through Medicaid. Cuts to Medicaid coverage could destabilize the careful balancing act that organizations like Family Health Centers rely on, communications officer Melissa Mather said.
“When you start tipping that scale and you throw in a lot more people who are uninsured, then we lose our ability to care for them,” Mather said. “You have a bigger pool of people who need care, and we have less capacity to do so.”
How could Medicaid cuts affect Kentucky’s budget?
One major question surrounding the debate over Medicaid funding is whether states will increase their budgets to cover federal reductions.
Kentucky Senate President Robert Stivers, R-Manchester, told The Courier Journal nothing has been decided yet as the federal budget awaits passage, but the state legislature is receiving information about its options.
“If there was a change in the match rate — generally it’s 70-30 — but if it were to go something like 65-35, we would have a decision to make about do we find the money to cover those services or do we remove those services from the Medicaid menu?” Stivers said.
Kentucky Congressman Brett Guthrie, who leads the committee in charge of making the $880 billion in cuts under the House’s proposal, has previously said he supports a per capita cap, which would give states a fixed amount of money for every person on Medicaid.
Such a cap would put increased pressure on states to provide funding in order to match what’s needed to maintain current services. Bart Irwin, CEO of Family Health Centers, said he’s not sure Kentucky is up to the task.
“At the current enrollment rate, we would need $11,000 per person who’s on Medicaid to match the expenditure from 2023 for Kentucky alone,” Irwin said. “So if they gave us $11,000 per person, maybe we could do that. They’re not going to do that. They’re going to give us $5,000 per person, and then what happens?”
Congressional Republicans have also voiced support for work requirements that would make adults on Medicaid seek employment, ideally cutting down on fraud and helping more people become insured through their jobs. However, 64% of Medicaid recipients work either full- or part-time, according to KKF. Of recipients not working, 29% have exceptions as caretakers or students, as well as for illness or disabilities.
Work requirements are not new to Medicaid. In 2018, Kentucky won approval from the Trump administration to enact a work requirement, though it was later blocked by a judge. In response, then-Gov. Matt Bevin removed vision and dental services for almost 500,000 enrollees.
Although work requirements are intended to help trim enrollment numbers and shift the burden of insurance onto workers’ companies, it’s not always foolproof. When Arkansas enacted a work requirement, 18,000 people lost benefits, many because of the administrative shuffle.
Medicaid enrollment numbers in Kentucky have also decreased in recent years.
In 2023, following the COVID-19 pandemic, Medicaid required all adult patients to recertify, causing the number of enrolled adults to drop 23%, from nearly 1.1 million to around 830,000, according to information provided by Family Health Centers.
Irwin said not all of those people taken off the Medicaid rolls were no longer in need of the program. Many were lost in what medical professionals call “the churn,” where patients lose insurance coverage due to temporary income changes or failure to meet administrative requirements.
“Some people had gotten jobs or income had increased or had moved out of state,” Irwin said. “So some people naturally fell off, but the majority who fell off did so because they didn’t comply with the state requirements. Like you have to return this form, and they missed the form or they had moved and didn’t get the form.”
When the number of Medicaid recipients goes down, that’s less revenue for clinics like Family Health Centers that rely on Medicaid insurance to help cover costs for uninsured patients.
“Every percentage point it drops costs us $250,000,” Irwin said. “So we’re down a million and a half dollars just through recertification.”
What happens if Medicaid funding is cut?
If Medicaid loses funding, it could dramatically affect both recipients and Kentucky’s health care providers.
Mather said removing services from Medicaid could limit important care like dental or vision for recipients.
“We’re talking about dentures versus no dentures, right? Glasses versus just an exam, right?” Mather said. “So they could bare bones [the program] as well, which, again, what’s the value of knowing what you need for vision if you can’t get the glasses to go with it?”
The amount paid out to health care providers could also decrease, reducing the amount of doctors across the state who would accept the program’s insurance.
“There’s not enough dollars to treat everybody, so what Medicaid would likely do is reduce the amount of money paid to medical providers,” Irwin said. “If you reduce the amount of money that is paid to medical providers — there are providers now who, including primary care providers, who don’t take Medicaid. For that same reason, more will not take Medicaid, and so you have this diminishing pool of provider resources.”
The Kentucky Center for Economic Policy, a nonprofit that analyzes state and federal policies, released a statement in February saying the House budget resolution could have massive impacts on the state’s health care system.
“These programs are essential to better health and are especially necessary in a time of rising household costs,” Executive Director Jason Bailey wrote in the statement. “They inject tens of billions of dollars into the Kentucky economy each year, creating jobs at grocery stores, hospitals and health clinics that are at risk if cuts move forward.”
If cuts go through, Family Health Centers could lose much of its 230-person support staff, including social workers, translators, health educators and other employees who are “not revenue generating.” Any kind of community services focused on long-term health education or removing barriers to health care for people in need could disappear under changes to the funding system, Irwin said.
“We would become just like a big doctor’s office,” Irwin said. “When you go to the doctor’s office, they don’t have somebody there to help you fill out forms for insurance or get insurance, and they don’t have people there that talk to you about your blood pressure and offer you aerobics classes.”
For Louisville’s health care providers and Medicaid recipients, there’s not much to do but wait.
“I don’t know what a disaster plan is,” Irwin said. “I mean, I don’t even know what the disaster is going to be yet.”
Reach reporter Keely Doll at kdoll@courierjournal.com. Read the full story: https://www.courier-journal.com/story/news/politics/2025/03/12/what-federal-medicaid-cuts-could-mean-for-kentucky/81337549007/