Kentucky Democratic Governor Steve Beshear said on Thursday he will expand Medicaid coverage under President Barack Obama's healthcare reform law, a move that will cut the state's uninsured population almost in half.
The expansion will extend coverage to adults earning up to 133 percent of the federal poverty line, providing public health assistance to more than 300,000 people.
That would nearly halve the number of people in the state - 640,000 - who lack health insurance, Beshear said in a statement.
Kentucky's current Medicaid program provides no coverage for adults without dependent children.
Under Obama's Patient Protection and Affordable Care Act, states can expand coverage starting January 1, 2014. About 11 million people nationwide are expected to benefit by 2016.
In recent months, opposition to Obama's Medicaid plan has grown louder in Republican-controlled states such as Florida and Texas, with state legislatures rejecting the expansion or choosing not to consider it.
In Kentucky, the governor is revising the state's Medicaid eligibility rules, said Beshear spokeswoman Kerri Richardson. Legislators have the power to review the changes and accept or reject them. But the governor can still implement them, she said.
Kentucky's government is split between Democrats and Republicans but its politics has a strong conservative flavor. The state's representatives in Congress include U.S. Senate Republican leader Mitch McConnell and Republican Senator Rand Paul, a favorite of the fiscally conservative Tea Party movement. Both want the law repealed.
The Medicaid expansion is one of the healthcare law's biggest provisions. But a U.S. Supreme Court ruling last year allowed states to opt out. So far, 22 states and Washington, D.C., have accepted the expansion, while 18 states have turned it down, according to the consulting group Avalere Health.
The federal government is offering to pay 100 percent of the cost of the expansion for the first three years, falling to 90 percent by the end of the decade.
Beshear made the decision after an internal analysis and outside studies conducted by the University of Louisville and the Price Waterhouse Coopers accounting and actuarial firm. The research concluded that the expansion would create 17,000 new jobs and add $15.6 billion to the state's economy between 2014 and 2021.
Beshear said Kentucky considered but ultimately rejected a plan like one proposed by Arkansas, which would expand coverage to low-income people by using federal Medicaid dollars to buy private insurance. The governor said that idea proved too costly.
(Additional reporting by David Morgan in Washington; Editing by Doina Chiacu)