Gov. Sarah Sanders announced on Tuesday plans to submit a waiver request to the federal government to add a work requirement to ARHome, the state’s unique version of Medicaid expansion where Medicaid dollars pay for private health insurance for able-bodied adults with incomes up to 138% of the federal poverty level.
In 2018, during the Trump administration, Arkansas was the first state in the country to implement a work-reporting requirement for Medicaid beneficiaries. But a federal judge put a halt to the program in 2019, and after President Biden took office, his administration told states it wouldn’t grant work requirement waivers anymore.
Sanders’ new plan is decidedly different than the old work requirement. It would require the nearly 300,000 Arkansans who receive Medicaid to either work, go to school or volunteer in their communities. If they don’t meet the criteria, rather than get booted off Medicaid all together, they’d be moved from a private plan to traditional fee-for-service Medicaid.
I’ve got questions out to health policy wonks for reactions to this plan. Having a private plan is undoubtedly better than a traditional Medicaid plan for beneficiaries, but it’s hard to imagine this carrot-and-stick approach getting through to them. Health insurance is a byzantine world. I suspect most people don’t understand all the advantages or disadvantages of their health care plan. I bet most ARHome beneficiaries don’t know whether they’re on a private plan or traditional Medicaid.
The state flirted with a similar approach when it sought a waiver for ARHome, but ultimately didn’t propose what it framed as a work “incentive” in its waiver request.
Sanders said she felt confident the waiver would be approved, and used the occasion to demagogue on “the welfare state.”
“When able-bodied Arkansans don’t work, go to school or volunteer, they aren’t just a burden on the taxpayer, they’re also being denied a chance to achieve indepence from the welfare system,” she said.
DHS Secretary Kristi Putnam said the plan was to submit the waiver by June 1 and propose Jan. 1, 2024, as the date the new requirement would go into effect.
UPDATE: Here’s a statement from Bo Ryall, president and CEO of the Arkansas Hospital Association:
The Arkansas Hospital Association and its members have seen firsthand how important Medicaid expansion has been to both the people and the economy of Arkansas. We appreciate the proposed “safety net” of providing fee-for-service Medicaid to ARHOME participants not meeting work or community engagement requirements.
As hospital finances remain in critical condition because supply and personnel costs have escalated without an appropriate increase in reimbursement, we are concerned about the lower reimbursement that hospitals might receive for fee-for-service participants. We are hopeful that continued collaboration with Governor Sanders’ team at the Department of Human Services will result in Arkansas patients having the greatest access to high quality hospital care.
UPDATE II: More responses:
From attorney Trevor Hawkins, Economic Justice Practice Group leader with Legal Aid of Arkansas:
Our position on the work requirements certainly has stayed the same. Evidence has shown that work requirements provide no benefit to the Medicaid program and only serve to cut off access to healthcare for low-income Arkansans. The last time this led to the termination of over 18,000 beneficiaries in just a year. The new proposal does not appear to lead to a direct termination of coverage but will place many on the much more restrictive fee-for-service Medicaid. The result will include an unexpected loss of providers and restriction of prescription medications.
From Will Watson, director of strategy for the Democratic Party of Arkansas:
“A decade ago in Arkansas, Republicans and Democrats united to make historic gains in expanding health insurance to more than 300,000 Arkansans. Now, Governor Sanders plans to waste our state’s time and money trying to undo that progress with a mean-spirited tactic already rejected by a federal judge. It will hurt Arkansans and fail in the courts, which she knows but can’t resist a headline. Democrats are focused on building a better and healthier Arkansas, even if she’s not.”
UPDATE III: From Arkansas Advocates for Children and Families:
Gov. Sanders’ proposal to impose work requirements on people enrolled in Arkansas’s Medicaid expansion plan (ARHOME) is a misguided policy that’s already been tried — and failed.
What we learned from the flawed experiment was that work requirements don’t reduce poverty, don’t help people work, and don’t improve people’s employment outcomes. Instead, implementing work requirements led to administrative barriers and red tape, resulting in tens of thousands of people losing their health insurance.
Gov. Sanders’ attempt at applying work requirements to ARHOME will be another burdensome process that does nothing to support or incentivize work. Penalizing some beneficiaries by relegating them to fee-for-service coverage (traditional Medicaid) for failing to meet the work requirements would create a tiered system for Medicaid benefits that would inevitably limit access to health care, which should not be allowed.
The sole purpose of Medicaid is to provide health insurance for Arkansans with low incomes. It is not a workforce incentive program. This was affirmed in the 2019 legal ruling that struck down the state’s ill-fated attempt to impose work requirements. Instead of creating costly and punitive requirements under the guise of encouraging people to work, our leaders should work to reduce barriers to care.
We believe in the value of work. If we truly want to encourage work, we need to stop efforts to take away health insurance from people who need it and look at policies that improve our economy, provide more jobs at a livable wage and help train people for those jobs.
We call on Gov. Sanders and our state leaders to address the real issues that cause high poverty rates and lack of good-paying employment opportunities in the state. We can no longer rely on solutions that satisfy political interests but ignore struggling families in Arkansas.
