Arkansas Becomes Third State to Impose Work-for-Medicaid (1)

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By Victoria Pelham

Arkansas will toughen Medicaid limitations in the latest Trump administration move to curb the scope of the safety-net health insurance program, though one key request was left out.

Medicaid officials March 5 approved Arkansas’s Section 1115 waiver linking the benefits to mandatory employment.

State administrators hope the demonstration project will boost Medicaid beneficiary responsibility and bring the program closer in line with private health insurance. The Centers for Medicare & Medicaid Services approval is the third-ever Medicaid work requirement in as many months, following Indiana and Kentucky. Eight more states are seeking Medicaid work requirements, with nine others also interested, CMS Administrator Seema Verma said March 5 at a press announcement with Arkansas Gov. Asa Hutchinson (R).

Trump administration officials have made a priority of the Medicaid waivers, especially those that add tightened standards for health coverage, as a pathway toward self-sufficiency. People want more for themselves than to be on Medicaid, Verma said.

“It’s easy to just hand people a health insurance card, but it’s a much harder task to help them make the changes to move out of the Medicaid program and hopefully to a better life and a new job that provides health insurance,” she said.

Arkansas covers more than 912,000 people in its Medicaid and children’s health insurance programs—22 percent of its population, according to the Kaiser Family Foundation. Further, most of those beneficiaries (71 percent) are in families with at least one worker. The program comes with a $6 billion price tag.

“This just shows there’s continual ferment and change around the edges,” Tom Miller, a resident fellow at the conservative American Enterprise Institute, told Bloomberg Law. “There is some room for experimentation and innovation in a positive manner.”

Another portion of the waiver request that would have allowed the state to trim its Obamacare-expanded coverage to only those residents with incomes up to the poverty line is still in limbo.

First to Implement

Hutchinson said his state will likely beat the others to become the first to “actually implement” the mandate and feel the real-world effects.

State health officials plan to notify beneficiaries by March 15, then to bring its portal reporting tool live by the end of the month. Those needing to verify their compliance will have to start filing reports by June 1, Arkansas Department of Human Services Director Cindy Gillespie said.

“We are committed to making this one of the benchmarks other states can use as they pursue this concept of work requirements,” Daryl Bassett, director of Arkansas Workforce Services, said. “We’ve been practicing for this game for over a year—we’re ready to go.”

Arkansas’s government and health-care community prepared the changes for more than a year, so Medicaid health plans set rates already expecting a work requirement, officials said.

The Medicaid waiver will require working-age adults up to age 50 to engage in 80 hours per week of a work or community engagement activity such as job training, job search, or volunteering. Arkansans who are medically frail, pregnant, a caretaker, a senior, in full-time education, or substance abuse treatment aren’t subject to the mandate.

Beneficiaries will lose Medicaid coverage after three months of not meeting the requirements.

State leaders said there will be a robust outreach process and no surprises, adding that the program will feature wraparound, case management services.

In the Shuffle

Still, critics of the hotly contested Medicaid work requirements caution that most who can work already are. They argue the newly approved policies will just add new red tape to a system where beneficiaries already regularly see care interruptions and will ultimately boot people—especially the most vulnerable—from the rolls.

The National Health Law Program has already filed suit over Kentucky’s Section 1115 waiver; analysts expect more to come.

Arkansas’s newly approved waiver could lead to coverage losses even for exempted beneficiaries, according to the left-leaning Center on Budget and Policy Priorities. The think tank notes beneficiaries will face more administrative burdens to prove their work or exemption, which is harder in homes without internet access, and that hours can vary by month, jeopardizing Medicaid benefits.

The Protect Our Care Coalition, made up of health-care and social justice groups focused on access, said the Trump administration’s stamp of approval “breaks new ground in needless and ideologically-driven cruelty.”

Sara Rosenbaum, a health policy and law professor at George Washington University, told Bloomberg Law the inevitable decrease in Medicaid enrollment and jump in the uninsured rate under work requirements would have communitywide effects. For example, hospital emergency departments and burn and shock trauma units could strain under the pressure of uncompensated care with fewer people insured.

“This is clearly a kind of consequence that ought to be examined in the [waiver] evaluations, and it’s just not being paid any attention to,” she said.

Miller told Bloomberg Law he doesn’t expect drop-offs in enrollment to be as high as predicted under work requirements.

The CMS approval could also be a “little bit of a green light for red states to find more ways to get more comfortable with types of accommodations with expanded Medicaid,” potentially giving political cover in red states to grow their programs, he said.

Partial Expansion Coverage Still a Question

The CMS did not address Arkansas’s push to curb the state’s Medicaid expansion from covering those making more than 138 percent of federal poverty to 100 percent. The federal government hasn’t ever allowed a partial Obamacare expansion, but the Trump administration is weighing proposals to do so from both Arkansas and Massachusetts.

Officials said it’s still a possibility, but they wanted to move forward quickly with the work requirements first.

“We’re continuing to work through the issues regarding that,” Verma said.

New Health and Human Services Secretary Alex Azar is “very open” to Arkansas’s expansion request, Hutchinson said March 5. He called that request a “work in progress.”

But some believe the CMS’s failure to take up that proposal might signal reluctance from the Trump administration on that change. Rosenbaum called partial expansion a “nonstarter.”

The Trump administration “has no intention of allowing states to spend additional funds beyond what federal law would permit, and federal law does not permit partial expansion,” she said.

Patricia Boozang, a senior managing director at Manatt Health in New York, said in a statement that the Medicaid agency leaving out the expansion roll-back “answers a significant outstanding question about the limits of CMS flexibility in working with states.”

To contact the reporter on this story: Victoria Pelham in Washington at vpelham@bloomberglaw.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bloomberglaw.com

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