Kentucky Senate softens Medicaid bill that would impose co-pays, work requirements

John Cheves, Lexington Herald-Leader on Mar 31, 2026

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LEXINGTON, Ky. — State senators on Tuesday softened a controversial bill that would make eligibility and cost changes to Kentucky’s Medicaid program, which provides health coverage to 30% of the state’s 4.6 million people.

The Senate Health Services Committee unanimously approved a substitute version of House Bill 2 and sent it to the full Senate.

The Kentucky House voted along party lines Feb. 27 to pass HB 2. The House’s Republican majority said it was necessary for the Medicaid program to adopt federal requirements called for in last year’s so-called “One Big, Beautiful Bill Act” championed by GOP President Donald Trump.

But the bill’s combination of co-pays, “community engagement” work or volunteer hours required for some recipients, more frequent demands for documents to prove recipients’ eligibility and other new rules would have cut tens of thousands of Kentuckians from the Medicaid program, according to an internal analysis.

Republican Sens. Craig Richardson of Hopkinsville and Julie Raque Adams of Louisville unveiled a different version of HB 2 for the Senate committee on Tuesday.

“We know that this program has exploded,” Adams said as she helped to explain the new bill. “We know that we need to figure out better ways to make the program more efficient, so that it’s there for the long term, for those who need it.”

Kentucky’s Medicaid program is expected to cost about $20.5 billion this year, of which the state pays $4.65 billion and the federal government pays $15.8 billion. It serves low-income Kentuckians and the working poor who do not get health insurance from their employers.

The newly rewritten bill dramatically lowers the co-pays that would be charged for medical services. Instead of paying $20 to see a doctor and $35 for an in-patient hospital stay, both co-pays would be $5. And instead of a $5 co-pay for prescription drugs, that co-pay would fall to $1.

The new bill deletes language from the House version that would have stopped Kentucky from requesting a “hardship waiver” for the community engagement requirements in counties with an unemployment rate greater than 8% or 150% times the national average. In January of this year, that would have included Martin, Lewis, Magoffin, Pike, Wolfe, Elliott, Jackson, Carter and Lawrence counties.

It loosens some other language in the community engagement requirements, such as allowing exemptions for caretakers, the medically frail or people experiencing short-term hardships.

The House version would have prohibited “self-attestation” — letting Medicaid recipients vouch for their own conditions, such as income, residency or age, to prove their eligibility — nearly all the time. The new bill would allow self-attestation as a last resort.

The new bill includes language to protect Medicaid benefits going to “qualified aliens,” or people currently going through the legal U.S. immigration process; children currently receiving services; and individuals in need of skilled nursing services.

It also pushes back some deadlines for rules changes, including the imposition of co-pays, which would begin Oct. 1, 2028, instead of Jan. 1, 2027.

And it rewrites House bill language that prohibited Medicaid coverage for prescription drugs for weight loss. In the new version, coverage would be allowed if the drugs were used for weight management, not weight loss.

Although the Senate version of the bill is different from the House version, it satisfies all the requirements the federal government imposed in last year’s One Big, Beautiful Bill Act, Richardson said.

Democratic senators praised Richardson and Adams for working within the framework allowed by the federal government and coming back with a compromise that doesn’t impose as many burdens on Medicaid recipients as the original bill.

“I think our version here will allow us time as a state to figure out how will we implement those requirements in the One Big, Beautiful Bill and bring them into our state in a way that will hurt the fewest number of people that are eligible and will be most cost-effective for us to implement, which is another whole huge thought process,” said state Sen. Karen Berg, D-Louisville.

For the roughly 450,000 working poor Kentuckians in the Medicaid expansion population, the state should ask why it has to provide health insurance for so many people who work full-time jobs but don’t get insurance from their employers, Berg added.

“Basically, what we’re doing then as a state is we are subsidizing those employers,” Berg said. “When they get to be large corporations, we are spending millions and billions of dollars giving health insurance to people who work full-time for companies who just don’t do this for them, and that needs to be stopped.”