Work requirement cuts over 4,000 from Medicaid

September saw first round of state coverage losses

By Benjamin Hardy for the Arkansas News Network
As the 2018 election cycle commences, Governor Asa Hutchinson had reported in September that 4,353 Arkansans have lost health care coverage for the remainder of 2018 due to three months of noncompliance with the state’s first-of-its-kind Medicaid work requirement. Those beneficiaries are now locked out of the Arkansas Works program for the rest of the calendar year, though they can re-apply in January.
Earlier in 2018, the Trump administration approved Arkansas’s request to impose a work requirement on certain beneficiaries of the Medicaid expansion, composed of low-income, non-elderly adults.
Under Hutchinson’s direction, the Arkansas Department of Human Services began the new policy in June. The DHS is rolling out the mandate in phases, but eventually, about 167,000 people ages 19 to 49 will be required to report 80 hours of “work activities” each month or else show an exemption. Research shows most Medicaid expansion beneficiaries are already working, but to stay in compliance with the requirement, they must also report their hours each month through an online portal created by the DHS.
The governor had said previously that his aim is not to remove beneficiaries from Arkansas Works.
“I’d like to see those that are being cut off from the system lower. We’d like to see them all in compliance,” he said.
However, Hutchinson also noted that terminating coverage for those beneficiaries will save the state money. Under Arkansas’s unusual approach to Medicaid expansion, beneficiaries are provided with private insurance plans (sold by carriers on the individual marketplace, such as Arkansas Blue Cross and Blue Shield), and the Medicaid program pays their premium and other cost-sharing. The average monthly premium is about $570.
“In this instance, 4,350 times the $570 per month insurance cost results in a $30 million cost to the taxpayers to maintain,” Hutchinson said. “I think it would be common sense judgment of the people of Arkansas that we should not continue to pay $30 million per year for that cost.”
Most of those who lost coverage in September did so because they failed to report any work activities at all for June, July and August. Hutchinson listed a few scenarios that might result in people not reporting. “One, they could have … obtained other insurance coverage,” he said. “Or it could be that they moved away out of state without notifying DHS. Or it could be that they simply don’t want to be part of the workforce. They’re able-bodied, but … they don’t desire to do it.”
Critics of the work requirement say some people may be unaware it applies to them or may be under the mistaken impression that simply working regularly — as opposed to reporting those hours — is enough to stay in compliance. Others may have difficulty reporting online; Arkansas has among the lowest internet access rates in the nation.
The governor said he hoped that was not the case, noting the large volume of letters, phone calls and emails sent by the DHS in an attempt to inform beneficiaries of the new policy. In response to a question about the online-only reporting system, he said the insurance carriers are providing “registered reporters” authorized to receive beneficiaries’ information over the phone and assist them in logging hours.
The goal of the requirement, Hutchinson said, is to push more low-income people into the workforce, adding that “more than 1,000 Arkansas Works enrollees have found employment” allegedly due to the mandate. He cited the story of a woman in Harrison who received notice of the requirement, sought assistance at an Arkansas Workforce Center and is now enrolled in school to become a licensed practical nurse while working one day per week. (Educational hours also satisfy the terms of the mandate.)
“I think there are a great deal of success stories,” he said. However, because most Arkansas Works beneficiaries already do work — and because low-income people often cycle in and out of employment — it is not clear whether the job gains the governor cited were due to the requirement.
Democratic gubernatorial candidate Jared Henderson, Hutchinson’s main challenger in the November 6 general elections, criticized the new rule. “We have become the first state in the country to impose an Internet requirement to create a new bureaucracy between some of our most vulnerable citizens and their access to health insurance,” he said.
In the past, Henderson said, Arkansas has led the way in expanding insurance coverage — a reference to the state’s establishment of ARKids insurance for children under Republican Governor Mike Huckabee and its more recent embrace of Medicaid expansion under Democratic Governor Mike Beebe, making it an outlier among Southern states.
“Now,” he said, “I see us leading in the opposite direction.”
The coverage losses reported in September are almost certain to multiply, in part because the DHS is rolling out the requirement gradually.
In June, a first cohort of about 27,000 beneficiaries became subject to the mandate. Of that group, about one in six did not report 80 hours of work activities for June, July and August, resulting in their termination this month. If a similar ratio should hold true for the entire 167,000 eventually subject to the requirement, tens of thousands could lose Medicaid in the months ahead.
“A pretty significant portion of the population has now lost coverage, when you look at the number of people who are required to report,” Marquita Little, health policy director for Arkansas Advocates for Children and Families, said in an interview after the press conference. “We know that number is going to continue to increase as the state phases in the work requirement.”
The DHS has sent a letter to those individuals who recently lost coverage informing them that they are locked out of Arkansas Works until the end of the year. If they failed to report due to “an emergency or serious life-changing event” or due to a technical error — the DHS reporting portal has experienced problems recently — they may still request a “good cause” exemption from the agency.
Otherwise, unless they now qualify for another Medicaid category or assistance on the individual insurance marketplace, they have no obvious insurance coverage options. For those who have newly joined the ranks of the uninsured, the letter suggests they visit a community clinic or a federally qualified health center to seek medical care.
Little said that was not a sufficient solution. “I think our health care system has changed significantly in response to Medicaid expansion,” she said. “The charity care system is not what it once was. I worry about a large group of people becoming uninsured and that system being unable to absorb an increase in the number of people they’re serving.”
“If one of the main issues is that people aren’t receiving the information about it — if they’re not getting the mail or if they don’t understand the notices — continuing to do that probably won’t be effective,” she added.
Meanwhile, the Arkansas work requirement remains the subject of a federal lawsuit seeking to halt its implementation.
The plaintiffs, who are three Arkansas Works beneficiaries, say the state is attempting to undermine the goals of the Medicaid expansion by throwing up roadblocks to coverage; they say the Trump administration erred in approving a waiver that allowed Arkansas to proceed with its plan. Earlier this year, a similar suit in Kentucky succeeded in blocking that state’s work requirement program before it got off the ground.
But Hutchinson says the work requirement will only improve the Arkansas Works program. Hutchinson said the requirement represents a “proper balance of those values that we hold important to us in Arkansas.”
He reiterated his support for Arkansas Works as a whole and noted that he has defended it from fellow Republicans who have sought to defund the program.
“I fought hard to maintain Arkansas Works, despite odds against it, despite enormous criticism,” Hutchinson said. “Compassion and common sense says this is a good program for those that are trying to move up the economic ladder and to better themselves. It’s also about providing assistance to those who need it. And it is also about the value of work and responsibility.”

(Editor’s Note: This reporting is published here courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan project in Little Rock dedicated to producing journalism that matters to Arkansans.)

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