UPDATE: Arkansas: Medicaid work requirement approved in 3rd state...and WHICH states are being approved is just as disturbing.


Time: D H M S

Nearly three years ago, there was a big report about a bunch of Republican Governors of states which hadn't expanded Medicaid under the Affordable Care Act who claimed that they were willing to do so, but only if a work requirement was part of the deal:

In nearly a dozen Republican-dominated states, either the governor or conservative legislators are seeking to add work requirements to Obamacare Medicaid expansion, much like an earlier generation pushed for welfare to work.

The move presents a politically acceptable way for conservative states to accept the billions of federal dollars available under Obamacare, bringing health care coverage to millions of low-income people. But to the Obama administration, a work requirement is a non-starter, an unacceptable ideological shift in the 50-year-old Medicaid program and a break with the Affordable Care Act’s mission of expanding health care coverage to all Americans. The Health and Human Services Department has rejected all requests by states to tie Medicaid to work.

Greg Sargent of the Washington Post noted that this may be something of a Faustian bargain:

This might seem like just more “safety-net-as-hammock” talk from Republicans — i.e., government assistance for poor people will sap their work ethic, so the only way red states can accept Obamacare money to expand health coverage to them is with some kind of work provision so they don’t get lulled into dependency while lounging in that hammock.

But I’m going to suggest that this is, on balance, a good development — in the sense that more GOP governors appear open to finding terms upon which they are willing to take the money to cover their constituents.

My own take was somewhat measured (for me, anyway):

I do see Sargent's point here; the fact that Republican governors are open to embracing (well, "grudgingly accepting", anyway) any part of Obamacare is in and of itself a positive sign of how the sand is shifting beneath their feet. Even so, aside from the fact that adding all of these extra requirements (ironically the same sort of "bureaucratic red tape" which conservatives supposedly hate) tends to overcomplicate what is historically an extremely efficient program (according to the Kaiser Family Foundation, Medicaid's administrative costs are only 7%, about half the rate of private insurance), there's another, uglier issue which is addressed by McCarter over at dKos:

Most of these people are already working, assholes. How about instead of trying to embarrass them further for being poor, you work on embarrassing their employers for refusing to provide them health insurance or refusing to pay enough that they can buy it with Obamacare subsidies? And why isn't the fact that most people who would qualify for Medicaid who are now in the gap are working the beginning point in any discussion about Medicaid expansion and work requirements?

In any event, at the time, the presumption was that since 31 states (29 at the time) had already expanded Medicaid under the ACA without work requirements, it was meant purely as a necessary evil to entice some of the other 20 or so states (down to 18 as of this writing, now that Maine has gone ahead and expanded the program via a statewide ballot initiative) who were still being sticks in the mud about the whole thing.

Well, it's almost three years later now, and I'm saddened to report that although 3 states have now had Medicaid work requirements approved, this has resulted in a net increase of exactly zero states actually expanding the program:

The Trump administration on Monday approved Arkansas' plan to require thousands of people on its Medicaid expansion program to work or volunteer, making Arkansas the third state allowed to impose such restrictions on health care coverage for the poor.

Gov. Asa Hutchinson announced that the requirement for Arkansas' program, which uses Medicaid funds to purchase private insurance for low-income residents, had been approved by the Centers for Medicare and Medicaid Services. More than 285,000 people are on the Arkansas program, which was created as an alternative to expanding traditional Medicaid under the federal health law.

Arkansas now joins Kentucky and Indiana in requiring a massive, costly, convoluted work reporting system (which will likely cost more to implement than would be "saved" by kicking people off the program anyway)...even though all three states had ALREADY expanded Medicaid without it.

In other words, not only hasn't a single non-expansion state actually gone ahead and expanded Medicaid under the new rules (Virginia is supposedly planning on doing so, but hasn't yet), three already-expanded states are moving backwards by adding the requirement.

...The new requirement will eventually affect non-disabled, childless adults on the plan who are 19 to 49 years old. This year, the change will affect about 39,000 people aged 30 to 49 years old, and over 30,000 more next year when it's rolled out for people aged 19 to 29, according to the state Department of Human Services.

That's 69,000 Arkansans--the vast majority of whom are already working, students, taking care of a family member etc--who will have to jump through a ton of hoops to hold onto their healthcare coverage.

...Critics of the policy have called it unnecessary and say it could lead to people losing coverage, even if they meet the requirements.

"We don't think that it will be any more effective than if we had just offered Arkansans the necessary support they need to overcome barriers to employment without punitive measures," said Marquita Little, health policy director for Arkansas Advocates for Children and Families.

The problem is that while these states may have previously approved the no-work-requirement version of ACA expansion in the past, those authorizations have to be renewed every once in awhile, and the GOP in each state is jumping all over CMS's new attitude:

The work requirement's approval was seen as key to winning support for reauthorizing the Medicaid expansion by state lawmakers in Arkansas. The state budget bill for Medicaid and the expansion require three-fourths support in both chambers of the Legislature, and vacancies in the Arkansas Senate have left supporters shy of the votes they'll need. A legislative panel advanced the Medicaid budget bill hours after the work requirement was approved.

"It certainly makes it more palatable," said Republican Sen. Alan Clark, an opponent of the expansion who said he was undecided on whether to support the budget measure. "Still overall I'm not a fan of the program, but I think they've made some huge improvements."

But wait, there's more! Arkansas may weaken the Medicaid expansion program even more:

Verma and Hutchinson said they'll continue to discuss another proposal by Arkansas that wasn't among the changes approved Monday to move 60,000 people off the Medicaid expansion by lowering the eligibility cap from 138 percent of the federal poverty level to 100 percent. The federal poverty line this year is $12,140 for a single person or $25,100 for a family of four.

There's a small silver lining here:

Arkansas would have been the first state to scale back the eligibility for a key part of the federal health overhaul. The people affected would have been eligible to buy subsidized private insurance through HealthCare.gov, the federally run health care insurance exchange.

It's important to remember that while moving from cost-free Medicaid to a private exchange policy may be a worse deal from the enrollee's POV, Arkansas has a unique situation: They never went with "standard" Medicaid expansion in the first place. Instead, the Obama Administration did authorize them to set up something called the "Medicaid Private Option", which basically amounts to the state using the funds which normally would go towards paying for Medicaid and instead using it to simply enroll people into private policies via the ACA exchange itself:

Arkansas’s Medicaid expansion waiver took effect January 1, 2014. It placed most newly eligible enrollees into private insurance plans via the state’s marketplace. A small portion of beneficiaries who were deemed medically fragile (i.e., adults with chronic health conditions and complex medical needs) were placed in traditional Medicaid. Individuals eligible for the private option do not pay any premiums. Those with incomes below 100 percent of the federal poverty level ($11,880 in annual income for a single person) do not face cost-sharing at the point of care for covered services, while those with incomes above 100 percent of poverty face modest cost-sharing within federal limits. Out-of-pocket costs are capped annually so that they do not exceed 5 percent of a family’s household income.

Someone living in Arkansas who earns 139% of the federal poverty line (around $16,700/year) today--just barely over the 138% Medicaid expansion cap--would qualify for $332/month in tax credits for a private plan, as well as qualifying for substantial CSR assistance to bring the actual cost to them down to as little as $25/month with a $200 deductible and $600 out of pocket maximum. That amounts to anywhere from $300 - $900 in total costs for them, or 1.8% - 5.4% of their total income.

Under Arkansas' current "Private Option" arrangement, not much would really change for those in the 100-138% FPL income range, except that I presume they'd have to be the ones actively enrolling in the HealthCare.Gov policy instead of having the state government handle that for them. In other words, it's not that the 100-138% cut-off would be an improvement, it just wouldn't be much of a change one way or the other from those enrollees' POV.

The work requirement for everyone else, however, would suck.

UPDATE: As Jessica Schubel of CBPP notes, I was wrong to shrug off the impact on Arkansas residents in the 100-138% FPL range. As was pointed out to me today:

Arkansas’ current waiver requires it to supplement marketplace coverage in various ways to make sure it’s equivalent to Medicaid coverage from the enrollee’s point of view. In particular, while private option enrollees from 100-138% FPL do now owe premiums equal to 2% of income in Arkansas, they can’t be disenrolled from coverage for not paying those premiums. Arkansas also provides a coverage “wrap” encompassing Medicaid services private plans don’t cover (e.g. non-emergency medical transportation). And, like other Medicaid enrollees, private option enrollees can sign up for coverage at any time, not just during open enrollment or special enrollment periods. So those are all things that would change for beneficiaries if Arkansas were permitted to shift to “partial expansion.”

In other words, even for those in the 100-138% range, being shifted over to "standard" ACA exchange policies would still be a significant step backwards.