Arkansas drops thousands from Medicaid for non-compliance with work requirements; Ky. official says ‘Kentucky is not Arkansas’

By Melissa Patrick
Kentucky Health News

Arkansas is the first state to implement work and community-engagement requirements for some of its “able-bodied” Medicaid beneficiaries, just like Kentucky is trying to do. Three months into the new rules, the state has kicked 4,353 people off Medicaid for noncompliance, and will likely kick thousands more off next month.

Opponents of Kentucky’s new plan, called Kentucky HEALTH (for Helping to Engage and Achieve Long Term Health), have long said they expect the same thing to happen in Kentucky if it’s allowed to proceed.

“Kentucky’s work requirement is far more complex [than Arkansas’] and will require more reporting from participants. It is likely, then, that many will fail to meet the requirements and lose their Medicaid coverage,” Dustin Pugel of the Kentucky Center for Economic Policy wrote Aug. 16 in a paper as part of the latest federal comment period on Kentucky HEALTH.

Cabinet for Health and Family Services spokesman Doug Hogan said the cabinet doesn’t expect the same thing to happen in Kentucky.

“Kentucky is not Arkansas,” Hogan wrote. “Arkansas operationalized within a few months after getting approval, chose to utilize technology that was not geared toward reporting activity for Medicaid, and had some challenges getting communications out to beneficiaries about the changes. In contrast, Kentucky has worked over the course of more than 1½ years with providers, nonprofits, MCOs [managed-care organizations] and members to get information out, invest in a new IT system, conduct training across the state for all stakeholders, and research ways to better engage citizens.”

Kentucky’s plan would require “able-bodied” Kentuckians who are not primary caregivers to work, attend school, take job training or volunteer 80 hours a month, or, if appropriate, get into drug treatment. It also includes small, income-based premiums and lockout periods for noncompliance, among other things.

For an Excel file with numbers on expansion and other Medicaid enrollment in each Kentucky county, click here.

A federal judge in Washington, D.C., was worried enough about how many Kentuckians could lose coverage under the state’s new plan that he sent it back for review.

District Judge James Boasberg vacated the plan just days before it was set to kick in on July 1, in part because the U.S. Department of Health and Human Services had not sufficiently considered the state’s estimate that in five years Kentucky’s Medicaid rolls would have 95,000 fewer people with the plan than without it, largely for non-compliance with its requirements.

Medicaid provides coverage to about 1.4 million people in Kentucky, about half of them children and nearly 500,000 through the expansion of the program to those who earn up to 138 percent of the federal poverty level. It is this expansion population that will be most affected by Kentucky HEALTH if it is approved. Most who gained coverage through the expansion are already working.

The cabinet is proceeding as if it expects the Centers for Medicare and Medicaid Services to approve the plan. On Sept. 15, Associated PressFrankfort correspondent Adam Beam wrote on Twitter: “Update on Kentucky’s Medicaid work requirements: Joint status report filed in federal court today. It says CMS continues to evaluate Kentucky’s application and submitted comments. All parties will provide more info by Oct. 15.”

A lawsuit is also pending that seeks to invalidate the Arkansas program and because of its similarities to Kentucky’s case, and Boasberg is handling that case as well as Kentucky’s.

What’s happening in Arkansas? 

The new Medicaid program called Arkansas Works, which was approved under a waiver of the federal Medicaid rules, took effect in June. The program requires non-exempt enrollees to work or participate in qualifying activities, like job training, education or volunteering, 80 hours a month and report their hours electronically. It is being phased in and now affects only enrollees aged 30 to 49.

Kaiser Family Foundation graphic

The Kaiser Family Foundationreports that of the 60,012 Arkansans who were subject to the new requirements in August, 27 percent, or 16,357, did not report 80 hours of qualifying work activities and “nearly all” of those reported no work activities at all. However, they have three months to report such activities to be in compliance.

Arkansas data shows another 5,076 people are at risk of losing their coverage in October because they have had two months of non-compliance, and 6,174 have not been in compliance for one month.

According to a news release from Gov. Asa Hutchinson’s office, the Arkansas Department of Human Services conducted “extensive outreach” from April to August to their beneficiaries to let them know about the new requirements. Hutchinson said some who did not comply may have found work, gained coverage elsewhere or moved out of state without notifying officials.

“Some simply chose not to comply. Those are the ones who will lose their Arkansas Works coverage for the remainder of 2018,” Hutchinson said. “Personal responsibility is important. We will continue to do everything we can to ensure those who qualify for the program keep their coverage, but we will also make sure those who no longer qualify are removed.”

Arkansas estimates it will save $30 million by dis-enrolling 4,353 beneficiaries.

Within hours of the announcement, CMS Administrator Seema Verma, a champion of work requirements as a way to lift people out of poverty, said on Twitter: ““I’m excited by the partnerships that Arkansas has fostered to connect Medicaid beneficiaries to work and educational opportunities, and I look forward to our continued collaboration as we thoroughly evaluate the results of their innovative reforms.”

Advisory panel alarmed by Arkansas numbers

Members of a federal advisory panel, the Medicaid and CHIP Payment and Access Commission (MACPAC), “expressed dismay” Sept. 13 over the Arkansas numbers. Some the members said “the early numbers are so worrisome that the agency should force the state to put the work requirements on hold,” James Romoser reports for Inside Health Policy. Romoser reports that Commissioner Alan Weil called the numbers “a serious red flag” that needed to be brought to CMS’s attention as soon as possible, before policymakers adopt Medicaid work requirements in more states.

“This is very important information,” Weil said of the early Arkansas statistics. “These waivers were granted on the belief that they would yield an increase in work, and clearly it takes time to determine the validity of that hypothesis. But I’m not really comfortable with us just offering some sort of retrospective reporting on how many people lose coverage. It does seem to me — even on the basis of this pretty preliminary information — that, as of now, we don’t have any evidence of increased engagement with work-related activities, much less work, and we have significant evidence of a large number of people losing coverage.”

Weil added, “It feels to me as MACPAC we have an obligation to state that rapid implementation of large-scale change of this nature across multiple states is a really risky proposition.”

MACPAC Chair Penny Thompson said the commission will consider formally communicating concerns to CMS at its next meeting, which is scheduled for Oct. 25-26, Romoser reports.

CMS has also approved work requirements for Medicaid in Indiana and New Hampshire. Seven other states (Arizona, Kansas, Maine, Mississippi, Ohio, Utah and Wisconsin) have applied for permission to implement them.

Kaiser Family Foundation table; click here for more details; click on chart for a larger version.