"The judge illogically concluded that Medicaid is all about paying for healthcare for as many people as possible without regard to whether this coverage actually makes people healthier. We emphatically disagree because a healthcare program like Medicaid, by its very nature, must take into account whether it improves people's health. That's the whole point.

"In Kentucky, we want more than to simply give someone a Medicaid card they can put in their wallet--we want a program that focuses on actually improving health outcomes. And that is what Kentucky HEALTH was designed to do. Kentucky HEALTH is precisely in line with the objectives of the Medicaid program and squarely within the authority of the HHS Secretary to approve.

"Although a setback to our implementation schedule, we believe that we have an excellent record for appeal and are currently considering next steps."