Thousands Could Lose Medicaid as 1st State Implements Work Requirements

Two months into Arkansas’ work requirements for some people on Medicaid health insurance, state data shows more than 5,000 recipients are in jeopardy of losing their coverage as soon as September.

Critics say recent figures put out by the Arkansas Department of Human Services demonstrate that many people are probably not even aware of the new work requirements or lack internet access to complete the online registration. Recipients who fail for three months to report that they are compliant—working at least 80 hours a month or engaging in other approved activities, like going to school or volunteering— won’t be eligible to get back on Medicaid until next year.

“The whole experiment is premised on the idea that folks aren’t working and this is going to create an incentive for them to work,” Joan Alker, executive director of Georgetown University’s Center for Children and Families, told Route Fifty. “When you look at this data, this is not about helping people work. This is in fact creating a very large set of hurdles to jump over to get your health coverage.”

Under the Trump administration, four states that expanded Medicaid eligibility to low-income people under the Affordable Care Act—Arkansas, Kentucky, New Hampshire, and Indiana—were given permission to require recipients to work or enroll in training or school. But a federal judge in June blocked Kentucky from moving forward with its plan, leaving Arkansas as the only state currently enforcing the rules.

Last week, three clients subject to the work requirements filed a federal lawsuit against the U.S. Department of Health and Human Services for allowing Gov. Asa Hutchinson to impose the requirements on some people covered through the state’s “Arkansas Works” program, which expanded Medicaid through private health plans in 2014. The lawsuit argues that Health and Human Services Secretary Alex Azar and Seema Verma, the nation's top Medicaid official, acted outside the scope of their authority when they allowed states to impose work requirements, while also saying the new rules will harm recipients.

A department spokesperson declined to comment on the lawsuit, but added that the federal agency will be closely watching the states as they roll out their programs and that it is “far too early to draw any conclusions.”

Hutchinson defended the new requirements. “This lawsuit has one goal, which is to undermine our efforts to bring Arkansans back into the workforce, increase worker training, and to offer improved economic prospects for those who desire to be less dependent on the government,” he said in a statement.

In an interview with The Atlantic in June, Cindy Gillespie, director of the Arkansas Department of Human Services, emphasized that the requirements exempted many people: Medicaid recipients raising children or caring for an incapacitated person, as well as those in rehab. That left a “small population of able-bodied adults” who were not working 80 hours a month that the state could get into community programs, volunteering or workforce training to help them be ready for steady employment, Gillespie said.

“Our focus is to really concentrate on those individuals and see if we can move them further up the economic ladder,” she told The Atlantic, noting that previous efforts to nudge people into workforce programs had been unsuccessful.

Amy Webb, chief communications officer with the Arkansas department, said in an email that the state sent letters to clients about the free worker training and other assistance offered by the Department of Workforce Services, as well as sharing information with community groups.

While groups like Arkansas Advocates for Children and Families have raised concerns that too many households in the state lack internet access for the registration process to be successful, Webb said the state is taking steps to address any problems.

Webb said the state created a “registered reporter” process through the insurance companies that provide Medicaid coverage that can help people report their work activities. The state has also informed people about the computers available for use at county offices, which they can use, she said.

The July report on the initiative, which was posted online by Georgetown's Center on Children and Families, shows that about 270,000 people were signed up for Arkansas Works at the beginning of the month, out of which around 45,000 were subject to the work requirement. About 67 percent of those people were automatically exempted from reporting because they already working or otherwise in good standing, while about 1,500 reported an exemption to the state. Another 844 reported their work hours, while 12,722 did not.

Agency data shows that 5,426 recipients required to report for both months so far weren’t in compliance. The reporting mandate is being phased in this summer for people ages 30 to 49, while younger adult recipients face the requirement next year.

“There are going to be folks falling through the cracks here,” said Alker, who noted that as word spreads about the new conditions for insurance, it is likely that fewer eligible people will even sign up for Medicaid.

The lawsuit, put together by consumer advocacy groups, features current Medicaid clients who both have trouble working at the required level and aren’t computer savvy. One of the plaintiffs in the lawsuit is Charles Gresham, a 37-year-old man who said his seizure condition makes it difficult for him to keep a job and any possible gap in health coverage could make his condition worse. Gresham hasn’t been able to keep a job and can’t meet the volunteering requirement because he doesn’t have his own transportation, the lawsuit said.

Another plaintiff, 40-year-old Cesar Ardon, works as a self-employed handyman and has erratic hours, sometimes reaching the 80-hours-a-month threshold, but not always. Ardon, who had a baseball-sized tumor removed from his side in 2017, did not work enough in June to comply, but did in July. Still, Ardon wasn’t sure if he successfully completed his online report, according to the lawsuit.