HUTCHINSON: Anxious for federal approval of significant Medicaid changes. (File photo) BRIAN CHILSON

Significant changes to the state’s Medicaid expansion program proposed by Governor Hutchinson — including work requirements and a change in eligibility that would remove tens of thousands of Arkansans from the rolls — were slated to begin Jan. 1. However, the state still has not received the federal approval necessary to move ahead. The governor has consistently stated that he is confident the changes will be approved, but with the proposed implementation date less than two months away, state officials could face challenges staying on schedule.

At a press conference on Oct. 17, Hutchinson expressed some anxiety about the timeline for federal approval given the challenges ahead in initiating new program infrastructure. “It’s very important that we get that word in the near future, just because you have to give notice, you have to change some of the IT systems,” he said. “So there’s work to be done and we are anxious for that to be approved.”


More than two weeks later, the state has still received no word from federal officials.

“The feds are still conducting an interoffice review of the waiver, but the governor expects approval to be forthcoming,” Chelsea O’Kelley, a spokesperson for the governor, said. “He is optimistic about having an update by the time he returns from China [on Nov. 7].”


“We do not yet have a timeline for approval but hope that it is soon,” Department of Human Services spokeswoman Amy Webb said. Asked whether the Jan. 1 start date was still feasible at this point, Webb said, “Once we get that approval, we will need 60 days to implement those changes. We will revise the implementation timeline once we get that approval.”

More than 300,000 Arkansans are currently covered under the Medicaid expansion, which provides health insurance to adults who make less than 138 percent of the federal poverty level (that’s around $16,500 for an individual or $34,000 for a family of four). The federal Affordable Care Act provides most of the funding for states that have chosen to expand Medicaid. Arkansas opted to do so in 2014, during the Gov. Mike Beebe administration, via a unique approach then known as the private option, which used Medicaid funds to purchase private health care plans for eligible low-income Arkansans. Hutchinson kept this policy — which he re-branded Arkansas Works — in place, but received federal approval for a new waiver of Medicaid rules to implement a few changes last year, including imposing small premiums on certain beneficiaries.


The election of President Trump opened the possibility for additional changes that the Obama administration would not approve. In June, the state submitted a request for a series of amendments to the Arkansas Works waiver, which would institute four major alterations.

First, the state would reduce the number of people eligible for the program, limiting enrollment to those who make less than 100 percent of the federal poverty level (that’s around $12,000 for an individual or $24,500 for a family of four). According to the DHS, that means around 61,000 current beneficiaries — those who make between 100 and 138 percent of the FPL — would be removed from the program.

Second, the state would impose work requirements on most beneficiaries who remain. Those between the ages of 18-49 would be required to work 80 hours per month; if they were not working, they would have to participate in job training programs or certain approved volunteer activities. Beneficiaries must be in compliance for nine months out of the year or they would be removed from the program for the duration of the year. Beneficiaries 50 or older would not be subject to the work requirement; exemptions would be available for others who met certain criteria, such as caring for dependent children.

Third, the state would eliminate 90-day retroactive eligibility. Currently, enrollees in the program are retroactively covered for any medical expenses arising in the three months before enrolling. The Obama administration already granted a waiver that would allow the state to begin coverage only once a beneficiary was enrolled but attached certain conditions for the state to prove that it would protect continuity of coverage. The state is now asking the Trump administration to remove those conditions and allow it to eliminate retroactive coverage immediately.


Fourth, the state would end a little-used premium assistance program for those with access to employer-sponsored insurance that Hutchinson instituted in the original Arkansas Works waiver; only one beneficiary ever participated in this program.

The two headline amendments — work requirements and limiting eligibility to 100 percent of the federal poverty level — were changes that the Obama administration was unwilling to go along with, but the Trump administration signaled in a March letter to governors that it would allow states greater leeway to use waivers to make conservative alterations to Medicaid expansion. In addition to Arkansas, Indiana and Kentucky have such waiver requests pending; late last month, New Hampshire submitted a request for work requirements, and Arizona is expected to soon. Thus far, the Trump administration has only responded to one state seeking a conservative change to its Medicaid expansion program, this week approving a more minor change from Iowa, which eliminated 90-day retroactive eligibility.

Hutchinson has been in frequent communication with federal officials all year. Complicating matters, the Trump administration has been strongly supportive of a number of bills to repeal and replace the ACA, which would cut Medicaid expansion funding and could significantly alter the marketplaces that Arkansas Works, including its amended version, depends on. “There are some healthy discussions going on as to how the waivers fit into what the president is trying to accomplish,” the governor told reporters at a press conference last month. “I’ve made my case; I’m optimistic that the waivers will be granted, but I’m also anxious for it to occur and for it to be granted, so we continue to make our case.”

It is not surprising that responses on these waiver requests have taken a significant amount of time, according to Joan Alker, the executive director of Georgetown’s Center for Children and Families and an expert on Medicaid waivers.

“The Trump administration signaled early on they were open for business on waivers, but I think in reality the repeal and replace fight has taken a lot of time of top CMS officials and slowed down waiver approvals on that end,” Alker said. “It’s easy enough to say ‘state flexibility,’ but there are very complex issues involved with a lot of federal money at stake so these agreements cannot be constructed overnight.”

While they await word from the feds, DHS officials have been at work on their transition plan. If approved, the change in eligibility will be phased in on a monthly basis as part of beneficiaries’ annual renewal process, Webb said. Renewal dates come at the beginning of each month, depending on the month a beneficiary initially enrolled. If the state’s income data shows that a beneficiary makes more than 100 percent of the FPL and is thus no longer eligible, the DHS would send a letter of notice that Arkansas Works coverage would end in two months.

Such beneficiaries who lost coverage would have two potential routes to sign up for new health insurance. Many would be eligible to sign up for subsidized coverage on the Arkansas Health Insurance Marketplace, the regulated marketplace — often known as the exchange — established by the ACA. Income-based federal subsidies are designed to keep these plans affordable regardless of what insurance companies charge for them. Premiums for an equivalent plan for people in the 100-138 FPL group would be limited to 2 percent of monthly household income ($20 to $27 per month for an individual or $40 to $56 per month for someone in a family of four). That still represents an increase from the flat $13 per month that beneficiaries in this group are currently charged under Arkansas Works. Another big difference: Under current Arkansas Works policy, beneficiaries don’t lose coverage if they fail to pay these premiums, whereas they would lose coverage if they transitioned to a Marketplace plan and were not able to keep up with payments.

Meanwhile, some of the beneficiaries who would lose Arkansas Works coverage if the eligibility threshold changes may not be eligible for subsidized Marketplace insurance. That would be the case if they have a job that offers health insurance that meets two tests — it’s considered “affordable” by the ACA and meets a “minimum value” standard in terms of coverage. Premiums for these employer-sponsored plans can be significantly higher — up to 9.69 percent of household income — and may offer much less coverage than Arkansas Works or equivalent Marketplace plans. The state estimates that around 20 percent of the 61,000 beneficiaries slated to lose coverage fall into this category and would need to move to employer-sponsored insurance to maintain coverage.

Webb said that when the DHS sends out notices to beneficiaries who are losing Arkansas Works coverage, it will explain their options. “They will be told where to go to access coverage via the exchange,” she said. “We have been working with the insurance carriers on this transition, and each carrier has their own plan on how they will work with beneficiaries to transition them to a new plan.” The DHS did not respond to a query about whether it will offer additional help or guidance to beneficiaries navigating the transition to employer-sponsored insurance rather than to the exchange.

As for the work requirement, the DHS plans to implement it first for 30-49-year-olds, who will be phased in over the first six months of 2018 (around 6,000 to 7,000 per month); 19-29-year-olds will be phased in over the first six months of 2019. These beneficiaries will receive a notice from the DHS explaining the new requirement, including instructions for alerting the agency of relevant exemptions. “We worked with health literacy folks to ensure it was at an appropriate grade level and easy to understand for all clients,” Webb said.

Once the work requirement has been phased in for these beneficiaries, they will have to report their work activity on a monthly basis. “If they fail to report work activity then that will be one month of noncompliance,” Webb explained. “They will receive a letter from DHS explaining the consequence of not complying. If they are noncompliant for three months, they lose coverage for the remainder of that calendar year.” Both the DHS and insurance companies will send notices, including emails, if someone is noncompliant, reminding them to report.

Beneficiaries will have to report their work activity via a website, which is still under development. Webb said that the DHS expects it to be ready in December. “We have kiosks in our county offices for people who can’t access the site via a personal computer or other device, or at a library or other public computer sites,” she said.

Advocates for beneficiaries have been sharply critical of the proposed work requirements and eligibility reduction. “The proposed amendments will create more barriers to coverage and result in thousands of Arkansans becoming uninsured,” said Marquita Little, health policy director for Arkansas Advocates for Children and Families.

If the amendments are approved, Little warned that the transition may be rocky. “Two major issues that have affected families in the past are the lack of outreach and education about changes to their coverage and technical glitches with the state’s system,” she said. “Based on this history the state has had with implementing policy changes to the program, we could be setting ourselves up for another major backlog like the one that impacted all Medicaid enrollees previously, including infants and children in ARKids First. A number of people who were legitimately eligible lost coverage, while others had to wait months to successfully enroll. Also for many families, health literacy and access to a computer are going to create challenges that make it very difficult for them to understand and comply with the new policies.”

Asked whether the implementation date should be pushed back given the short amount of time to initiate a transition, Little said, “We are greatly concerned about the changes and think there is no good method for rolling them out. However, if the changes are inevitable, pushing back the implementation date would certainly give the state additional time to ensure a streamlined process and to educate families.”

This reporting is courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan news project dedicated to producing journalism that matters to Arkansans. Find out more at