Medicaid cuts in rural KY will devastate recovery healthcare
What sustains recovery is community — that means housing, peer supports and access to health care. Pulling away these supports doesn’t just hurt individuals; it sets back whole regions.
Who is on Medicaid? The popular program could be on the chopping block
72 million people in the U.S. are enrolled in Medicaid, the federal and state health insurance program for those who are disabled or low income.
- A new law, H.R. 1, cuts federal Medicaid funding and adds work reporting requirements for recipients.
- An estimated 200,000 Kentuckians are projected to lose health coverage by 2027 due to the law.
- The legislation could lead to the closure of up to 35 rural hospitals in Kentucky, particularly in Appalachia.
- State policymakers are urged to broadly interpret exemptions for people with substance use disorders to prevent loss of care.
For Kentuckians with substance use disorders (SUDs), the stakes are high. Amid an ongoing overdose epidemic that has hit our state exceptionally hard, House Resolution 1 will only thwart our ability to obtain lifesaving care by adding red tape to Medicaid and gutting the program which over 20% of adults with an SUD nationwide rely on for treatment access (KFF).
This summer, Congress passed H.R. 1 and signed it into law. Among its many provisions, the bill drastically cuts federal funding to Medicaid — the nation’s largest health care payer, including for addiction treatment — and mandates new work reporting requirements for those who gained coverage through Medicaid expansion.
The impact on Kentuckians will be severe, with an estimated 200,000 projected to lose health coverage in 2027 due to this law, including many young adults just beginning their life journeys, Kentucky Health News reports.
Health care providers across the state will struggle to operate in this new funding environment, which will translate to longer wait times for all patients and the potential closure of hospitals that rely on Medicaid funding, particularly in rural communities.
Data from the 2022–2023 National Surveys on Drug Use and Health show 17.5% of Kentucky residents aged 12 and older had a SUD in the past year. And while fatal overdose has decreased statewide since peaking in 2021, there were still 1,410 Kentuckians who died from drug overdoses last year. Clearly, this crisis is far from over.
Appalachia is the epicenter of medical risk
The threat of H.R. 1 is especially acute in eastern Kentucky, the heart of Appalachia. This region faces higher poverty rates, more chronic illness and fewer health care resources than the rest of the state. Many rural hospitals here already operate on razor-thin margins; federal Medicaid cuts could push up to 35 Kentucky rural hospitals toward closure, leaving residents to travel 30 – 40 miles or more for care, or forgo it entirely.
Cuts to recovery and harm reduction services in Appalachia would undo fragile progress. In areas where overdose deaths are already among the highest in the nation, slashing Medicaid and recovery supports risks a surge in preventable overdose deaths, greater pressure on emergency departments and more people cycling through jails instead of treatment. These costs are not just human but economic: every $1 spent on addiction treatment saves $4 in health care costs and $7 in criminal justice costs.
As the CEO of People Advocating Recovery, I know this for sure: What sustains recovery is community — that means housing, peer supports and access to health care. Pulling away these supports doesn’t just hurt individuals; it sets back whole regions.
The cost of neglecting Appalachia will reverberate far beyond its borders, as untreated addiction, hospital closures and workforce losses strain the entire commonwealth.
New work requirements create an additional barrier to recovery
H.R. 1’s requirement that Medicaid expansion adults report at least 80 hours per month of paid or volunteer work to maintain their eligibility only complicates access to care for beneficiaries — not because they don’t have work to report, as the vast majority of Medicaid recipients are already employed or exempt from working, but because the reporting process is extremely burdensome and confusing. In other states like Arkansas and Georgia, past experiments with work reporting requirements have clearly illustrated how these efforts overwhelmingly cause people to lose their insurance coverage without increasing employment.
Kentucky policymakers can and must act now to mitigate such harm. A recent Legal Action Center report identifies several strategies to address these new federally mandated requirements, which are set to go into effect in January 2027. H.R. 1’s provisions allow for several key exemptions from the work requirements, including “medically frail” individuals — which includes those with SUDs, disabling mental disorders, certain disabilities and serious or complex medical conditions — and individuals “participating in a drug addiction or alcoholic treatment and rehabilitation program.”
On top of the reporting hurdles mentioned above, individuals with SUDs face significant employment barriers due to widespread stigma and the ongoing effort necessary to maintain one’s recovery. Any gaps in Medicaid coverage can jeopardize not only their health, but their housing, job prospects and treatment engagement, raising their risk of overdose, costly emergency room visits and even arrest. To prevent these particularly vulnerable Kentuckians from losing their access to vital care and treatment services, state policymakers should interpret these exemptions as broadly as possible.
KY can protect thousands of vulnerable residents with SUD
For example, policymakers should define an individual with an SUD as inclusive of all substances — alcohol and drugs, regardless of whether they are illicit — and all levels of severity, consistent with the most recent editions of the Diagnostic and Statistical Manual (DSM) and International Classification of Diseases (ICD). And the “medically frail” exemption should be defined to capture all individuals who would be classified as having an SUD, even if they have not received a formal diagnosis by a medical provider. This will help to ensure Kentuckians across the state who are currently struggling with substance use, or have in the past, do not lose their access to essential health care. More such detailed recommendations can be found in LAC’s report here.
Make no mistake: implementation of H.R. 1 will be devastating. But with careful planning, Kentucky can protect thousands of residents, particularly those at highest risk, while complying with federal law. Acting now is essential to safeguard some of our most vulnerable Kentuckians and prevent returning to the peak overdose rates of our past.
Billy O’Bryan serves as the Kentucky program director for Young People in Recovery (YPR), a national nonprofit committed to empowering youth and young adults navigating recovery from substance use disorders. He also holds the role of president of the board of directors for the Louisville Recovery Community Connection (LRCC), a grassroots recovery center that connects individuals with substance use disorders to vital resources, services and a supportive recovery network.
Tara Moseley Hyde is the CEO of People Advocating Recovery (PAR), a statewide nonprofit that works to eliminate barriers to recovery from substance use disorder. Hyde has been in long-term recovery since 2011 and was appointed CEO in 2022. She serves on the Kentucky Recovery Housing Network’s advisory board and the SAMHSA Center for Substance Abuse Treatment National Advisory Council.
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