On Monday, the nation’s top Medicaid official traveled to Little Rock to announce federal approval of a measure long sought by Governor Hutchinson: a work requirement for beneficiaries of Arkansas Works, the program providing health insurance to 285,000 low-income Arkansans under the Affordable Care Act’s Medicaid expansion.
Seema Verma, the administrator of the Centers for Medicare and Medicaid Services, said CMS had not yet made a decision on another major change Arkansas wants to implement. Hutchinson announced last year his intent to lower the income eligibility threshold for Arkansas Works from 138 percent of the federal poverty level to 100 percent, which would remove an estimated 63,000 beneficiaries from Medicaid coverage. Both the work requirement and the lowered income eligibility threshold were included in a waiver request submitted to CMS by the Arkansas Department of Human Services in July.
“We’re still working through some issues in that particular area, but we wanted to move forward on the community engagement and work requirement piece,” Verma said when asked about the future of the lowered eligibility threshold. She did not indicate when CMS might decide on that portion of Arkansas’s waiver.
The work requirement is expected to take effect this summer, DHS Director Cindy Gillespie said Monday. Arkansas Works beneficiaries ages 19-49 will be required to prove they either work or attend school for at least 80 hours each month or else meet one of several exemptions, which include categories such as a chronic illness, a catastrophic event, enrollment in a drug or alcohol abuse treatment program or caring for a dependent child or incapacitated person. Students will also be exempt, as will people receiving unemployment benefits.
However, many of those who qualify for an exemption must document their status with the DHS on a regular basis. Those who do not qualify for an exemption must submit documentation of employment each month. Arkansas Works beneficiaries ages 50-64 will not be subject to the work requirement, nor will individuals in the traditional Medicaid program.
In 2018, the requirement will only apply to Arkansas Works beneficiaries ages 30-49. The majority of individuals in that group will qualify for an exemption, DHS spokesperson Amy Webb said on Monday. The agency’s data indicates about 60,000 of those beneficiaries ages 30-49 will be exempt and about 39,000 may be subject to the work requirement.
It is not clear how many of those 39,000 are already working today. A 2017 national analysis by the Kaiser Family Foundation found about 42 percent of nonelderly adults who receive Medicaid are working full time, with another 18 percent working part-time. The study found 32 percent of the remaining beneficiaries were not working due to illness or disability, caregiving or attending school, leaving 7 percent who were not working for some other reason.
Arkansas is the third state to receive permission to set up a work requirement for its Medicaid expansion population. CMS gave the green light to similar proposals in Kentucky and Indiana earlier this year. According to Hutchinson, Arkansas will likely be the first to actually implement the requirement, because the relevant state agencies — principally the DHS and the Arkansas Department of Workforce Services — have already developed systems to put it in place.
“We’ve got our processes down,” the governor said. When Arkansas submitted its waiver last summer, it first planned to roll out the changes in January 2018, suggesting the state initially expected speedy approval from the Trump administration.
Arkansas’s work requirement exempts a larger percentage of beneficiaries than those obtained by Indiana and Kentucky, which include beneficiaries up to ages 60 and 65, respectively. Those states also do not exempt people receiving unemployment benefits, according to Kaiser.
If Arkansas’s waiver is more lenient in terms of exemptions, it is harsher in terms of its consequences for noncompliance. If a beneficiary fails to comply for three any months out of a given year, he or she is not only removed from Arkansas Works but disqualified from re-enrolling in the program until the following year.
Hutchinson said Monday that the work requirement is not intended to be punitive.
“This is good news for Arkansas because this is not about punishing anyone,” he said. “It’s about giving people an opportunity to work. … It’s to help them to move out of poverty and up the economic ladder. … When you have one of the lowest unemployment rates in the history of the state … then that means we need workers. We need to recruit people and train people to move into the workforce.”
But many health care advocates are skeptical that work requirements help beneficiaries. Joan Alker, the executive director of the Center for Children and Families at Georgetown University, said the Arkansas waiver was “fundamentally misguided.”
“Everybody agrees that it would be great to help folks get better-paying jobs so that they can move onto private health insurance, but there’s really nothing in this proposal that’s likely to make this happen,” Alker said in a phone interview. “The federal government is not providing funding for job-training services; they’re not providing funding for child care or transportation or addressing other barriers that folks might have to getting a job or getting a better job.”
Instead, the state Department of Workforce Services is expected to provide many of those services. Yet DWS officials have said that the agency is not expecting to receive additional staff or other resources.
Alker said Indiana and Kentucky are both experimenting with “lockout periods” for certain beneficiaries that do not meet program requirements, but neither state is using lockouts in tandem with their work requirements. Arkansas’s combination of a work requirement and a lockout is “a new twist.”
“This just makes a fundamentally misguided policy worse, and probably more expensive in administrative costs, because you’re going to have to start tracking who is eligible to come back in and when,” Alker said. Lockouts can harm the most vulnerable beneficiaries, she added, many of whom may not know how to prove compliance even if they meet the requirements demanded by the DHS.
“The kinds of folks who are most likely to be penalized in this process … are people with disabilities and chronic health conditions, including mental health conditions. They may be extremely poor, people who are homeless or near homeless. They may be people with low literacy skills.” Losing health coverage tends to make such individuals less likely to pursue work, not more, Alker said.
After the announcement, Arkansas Advocates for Children and Families also warned that the waiver may harm many beneficiaries who qualify for an exemption or meet the work requirement but may run into bureaucratic hurdles.
“The fact is the majority of people enrolled in Arkansas Works are already working, enrolled in school, retired, or taking care of an ailing relative or dependent child,” the group said in a press release. “That means this policy will only add unnecessary costs and new administrative hurdles to a health care system that’s already difficult to navigate. Many Arkansans, including working people and people with disabilities, will lose coverage because they can’t overcome bureaucratic red tape to document that they meet work requirements or qualify for an exemption.”
DHS Director Gillespie said the agency will engage in “an aggressive and active outreach program” to inform beneficiaries of the coming changes and to connect them with job opportunities through the Department of Workforce Services.
“It won’t be a situation where they are surprised. They’ll be notified every month … if they’re not in compliance, they’ll be notified,” she said.
The DHS is contracting with the Arkansas Foundation for Medical Care to provide outreach, Gillespie said. Webb, the DHS spokesperson, said in an email that that contract is worth about $928,000 for 2018.
Gillespie said the DHS plans to have its online portal live on March 30, which beneficiaries will eventually use to submit information to the agency.
“The first week of April, all the individuals in Arkansas Works that will be subject to the work requirement will get their individual letter, and the first group required to begin reporting activities will begin those reports June 1,” she said. “That shows you how rapidly we are prepared to move.”
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 arknews.org.