Public Notice regarding Section 1115 Demonstration: Community Engagement (May 13, 2025)

The Kentucky Cabinet for Health and Family Services, Department for Medicaid Services, issued a full public notice on May 13, 2025, announcing its intent to file a Section 1115(a) Demonstration proposal with CMS to implement a Community Engagement Waiver Program. The program would apply to Medicaid expansion adults aged 19 to 60 who have been enrolled for more than 12 months, are physically and mentally able to work, and are not primarily responsible for the care of a dependent child under 18 or a dependent disabled adult relative. DMS would refer eligible non-exempt members to the Kentucky Department of Workforce Development, which would connect them to apprenticeships, career development, education, employment and training, and workforce preparation supports. The proposal includes an extensive exemption list. Individuals exempted from referral include those with a diagnosed SUD or serious mental illness, a chronic disease, or an acute medical condition; individuals whose eligibility is disability-based or who are SSA-determined disabled; pregnant women; individuals with verified earned income or receiving Unemployment Insurance; individuals who are homeless or recently homeless for up to six months post-housing; victims of domestic violence; former foster youth up to age 26; and individuals already participating in a qualifying workforce program such as SNAP. The Commonwealth is not requesting changes to Medicaid expansion eligibility, benefits, or cost-sharing through this Demonstration. No federal expenditure authorities are being requested. The budget neutrality projection, using a 0% enrollment growth rate and a 5% per-member-per-month trend over five demonstration years, models a 0.20% annual enrollment decrease starting in DY 02, producing a projected spend difference of approximately $184.6 million over the five-year period. An estimated 75,000 individuals would be subject to the waiver requirements. Two federal waiver authorities are requested: a waiver of Section 1902(a)(7)(A) of the Social Security Act to permit disclosure of Medicaid expansion member information to the Department of Workforce Development, and a waiver of 42 CFR 435.907(e) to require applicants to sign an agreement to automatic referral to DWD upon enrollment if determined non-exempt. The public comment period closes June 12, 2025, with two public forums scheduled for May 22 and May 23, 2025.