There’s one group of Arkansans who find themselves caught in the state’s Medicaid verification mess whose situation hasn’t been mentioned by most media accounts: parents of dependent children with very low incomes. The state’s system flags many of them whose income moves up or down, even though the state’s own data still shows them to be eligible for Medicaid. Extremely poor parents losing coverage is obviously a nightmare scenario, so let’s take a look at who these folks are and why they were flagged. 

Anyone following the news in Arkansas knows the basic story — as the state belatedly rolls out its troubled renewal and verification process for Medicaid and the private option, 50,000 Arkansans face losing their health insurance even though many or most of them are actually Medicaid eligible. When we get down to the details, though, let’s be honest: it gets confusing! Part of the problem is that state officials were not very clear from the outset about just who was losing coverage. Until they responded to our reporting, they never bothered to mention that a huge portion of them were folks who have no income at all according to the most recent state wage data. As late as last week, the governor was telling the press that accounts of eligible people losing coverage were “anecdotal.” That’s just not so: in fact the system, by design, will inevitably flag many people who are eligible according to the state’s own data. 


So who got flagged for income verification? As DHS Director John Selig put it, a “big chunk” of those whose coverage has been terminated showed no income at all according to the wage data from the Department of Workforce Services. Meanwhile, the system also flags people whose income has apparently increased by at least 10 percent according to the wage data and that increase appears to put them over the eligibility line. These folks may actually be Medicaid eligible (if their income fluctuates month to month, for example, and the quarterly Workforce Services snapshot exaggerates their yearly income) — but, pending verification, the data appears to show that this group has improved their incomes enough to no longer qualify. 

There’s a third group that gets flagged, however, and I’ve seen some confusion about this group even among those following this closely: very low-income parents whose income moves up or down. 


To understand why this group gets flagged, we need a little background about Medicaid expansion. Before Arkansas expanded the program via the private option, it had a very stingy program for non-disabled adults. The only people who qualified were parents of dependent children who made less than 17 percent of the federal poverty line (a little more than $4,000 per year for a family of four). When Arkansas expanded Medicaid via the private option, the feds provide funds in the form of “match rates” for that expanded population — the federal government pays for 100 percent of the cost of expanding coverage; that eventually falls to 90 percent in future years. But by law, Arkansas still has to keep covering the previous population covered by its Medicaid program — those parents making less than 17 percent FPL. Think of this as “old Medicaid” — and old Medicaid gets the old match rates (around 70 percent). Plus, beneficiaries in “old Medicaid’ currently get covered by the traditional Medicaid program instead of being placed in private plans via the private option. 

In other words, parents of dependent children who make less than 17 percent FPL are Medicaid eligible, just like similar parents who make, say, 30 percent FPL. They’re just eligible in a different category, with the biggest difference being how much the feds chip in to help with paying for the coverage. 


The state’s verification system flags any parents of dependent children whose income changes up or down by 10 percent and moves across the 17 FPL line. Let’s look at this by a couple of examples:

1) Jane is a mother of two who made $5,000 per year when she first applied to the private option; the Workforce Services data suggests that she now makes closer to $3,000 per year. She would be flagged for income verification because her income may have fallen and moved her from the Medicaid expansion/private option category to the “old Medicaid” category. 

2) John and Mary have one child and had no income when they first applied to Medicaid; the Workforce Services data suggests that they now make closer to $3,500 per year. They would be flagged for income verification because their income may have increased just enough to move them from the “old Medicaid” category up to the private option category. 

In the examples above, the beneficiaries are clearly Medicaid eligible according to the state’s own data. The verification question just has to do with which category they are in. DHS officials have argued that they are required to do this verification by federal law; however, Tricia Brooks, a Senior Fellow at the Center for Children and Families at Georgetown University and an expert on Medicaid eligibility and enrollment, told the Times that the state could elect to simply automatically place the beneficiary in the new category and send a letter explaining this had happened and asking for a reply only if the beneficiary needed to correct the information. Brooks said that the state was not required to demand verification from these Medicaid-eligible beneficiaries who moved categories; that was a policy choice. 


Without wading into the weeds of federal regs here on just what the state is required to do, this much is clear: state officials knew that these people, Medicaid eligible according to their own data, were being flagged. Anyone who has been following our reporting on this subject can probably guess what I’m going to say next. Under the circumstances, it is hard to defend the choice to impose a 10-day response deadline on beneficiaries, leading to a massive wave of cancellation notices  and coverage terminations. Yes, state officials gave some extra wiggle room, but this was the first renewal process for a massive, confusing new program. Of course we now know that the state was woefully unprepared, that there was little to no outreach effort for a hard-to-reach population, that the letters were poorly marked and vague, that many addresses were bad… Yet the governor still refuses to budge on the 10-day deadline. 

And among the victims of this questionable policy choice: parents of dependent children with extremely low incomes. These are among the folks who may face a gap in coverage, who may not be able to get their medication this month. Gaps in health coverage for parents put vulnerable children at risk as well.

How many of those whose coverage was terminated come from this group? We have no idea, because DHS did not capture the actual wage data that was used to flag beneficiaries. Just like we have no idea how many are beneficiaries who showed no income at all. 

Given the people we were putting at risk, perhaps the state should have showed more caution in choosing the response window as it unveiled its massive, troubled renewal process. Certainly, now that we have seen the bureaucratic glitches and outreach challenges in real time — and have 47,000 coverage terminations and counting to show for it, a number that caught DHS officials off guard by their own admission — it is time to re-think the 10-day policy choice. So why won’t the governor budge?