URGING APPEAL: Governor Hutchinson appeared with House Speaker Matthew Shepherd (left) and Senate President Pro Tem Jim Hendren (right) to discuss the judge's ruling. Brian Chilson

Governor Hutchinson said Thursday he has urged Trump administration officials to appeal a federal judge’s order blocking Arkansas’s first-in-the-nation Medicaid work requirement. On Wednesday, U.S. District Judge James E. Boasberg vacated the Trump administration waiver that authorized the Arkansas work rule along with a similar policy in Kentucky.

Nonetheless, Arkansas is taking immediate steps to comply with the ruling.

“The online portal has been shut down and no one will lose coverage from this point forward as a result of any failure to comply,” Hutchinson said, referring to the state Department of Human Services website that beneficiaries used to report their mandated 80 hours of work, school or other activities each month.

As of February, the work requirement applied to approximately 116,000 people ages 19 to 49 who were beneficiaries of Arkansas Works, the state’s name for Medicaid expansion. In 2013, Arkansas expanded Medicaid to cover low-income adults as part of the Affordable Care Act. With the Trump administration’s blessing, the state began imposing the work requirement last June for certain beneficiaries. Over 18,000 people lost coverage in 2018 due to not reporting sufficient work activity hours. Those Arkansans became eligible to reapply on Jan. 1.

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Because coverage ends only after three months of work rule noncompliance, no one has been disenrolled in 2019; several thousand likely would have lost coverage on April 1 if the judge had not stepped in.

Though the governor said he disagreed with Boasberg’s ruling, he also reaffirmed his commitment to Arkansas’s Medicaid expansion. That stands in contrast to the position taken by his counterpart in Kentucky, Gov. Matt Bevin, who previously has threatened to end Medicaid expansion entirely if Kentucky’s bid for a work requirement was blocked.

Hutchinson predicted the annual state Medicaid appropriation “should not be in jeopardy” in the state legislature. The existence of the work requirement has helped the governor convince conservative lawmakers not to attempt to block the Medicaid budget, as has happened in some past sessions.

The Medicaid appropriation bill narrowly passed the Senate yesterday — only minutes before Judge Boasberg issued his ruling. It must still win passage in the House.

House Speaker Matthew Shepherd (R-El Dorado) said he expected the chamber to vote on the Medicaid appropriation Friday. “I’m still very optimistic that we’ll be able to chin the bar and get the votes that we need,” he said. Passage of budget bills requires a three-fourths vote threshold in both chambers, allowing a minority of legislators to hold up appropriations.

Hutchinson framed the adverse ruling as a reason for the legislature to continue funding Arkansas Works: The state can’t pursue an appeal of Boasberg’s ruling if it ends Medicaid expansion entirely.

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“If we take Arkansas Works out of the DHS appropriation, then we’re in essence giving up on the fight and saying, ‘We no longer need a work requirement, we no longer want to fight for that,’ and it would moot out any appeal. … If we give up on this, then we will give up on the opportunity to lead nationally on this important program,” he argued.

Hutchinson said Arkansas will continue to refer able-bodied Medicaid recipients without a job to the Department of Workforce Services — a voluntary program that predates the work requirement. “Now that we’ve had more training and more awareness and a lot of public dialogue about it, I think you’ll find that there will be a greater compliance with the voluntary work referral than there was previously,” he said.

The governor also noted Arkansas Works enrollment has declined significantly in recent years even without the work requirement. The program peaked at around 330,000 beneficiaries in early 2017. It’s now at around 235,000. “Only 18,000 of those 95,000 lost coverage because of a failure to comply with the work requirement or the reporting requirements,” Hutchinson said.

It’s not entirely clear why Medicaid rolls have declined so steeply. The governor has pointed to both a strong economy and improved “accuracy tests” regarding eligibility. Anecdotally, many beneficiaries have reported losing their coverage due to excessive red tape, lost paperwork and other bureaucratic problems.

In addition to ending the work requirement, Boasberg’s order also vacated a portion of Arkansas’s waiver allowing it to offer only one month of retroactive eligibility for Medicaid, rather than the typical three months. That means prospective beneficiaries who are approved for Medicaid in April will receive retroactive coverage for the previous 90 days.

The governor said Boasberg’s opinion indicated the judge “had a fundamental disagreement with the work requirement in and of itself” rather than Arkansas’s execution of the policy.

The state has been much criticized for its rollout of the mandate and some beneficiaries have had trouble reporting their work hours. Until the state created a phone line in December, they were required to use DHS’ online portal, which many people complained was glitchy and difficult to navigate. Hutchinson emphasized that the judge “did not strike down the work requirement based on the reporting elements that has created significant controversy here in Arkansas and media attention over the last six months.

“His view is that Medicaid is an entitlement program and you cannot place additional requirements that may lead to a loss of coverage. … I contend that Judge Boasberg is wrong.” The D.C. Circuit Court of Appeals and the U.S. Supreme Court may have a different interpretation, Hutchinson said.