Health Coverage Losses From Medicaid Work Requirements Are Unavoidable, Report Says

Rules around Medicaid work requirements can’t be fixed in such a way that would allow states to implement them without the negative effects of people losing health coverage, according to a report from the Center on Budget and Policy Priorities (CBPP).

On a media call discussing the report, CBPP researchers pointed to the example of Arkansas, the only state so far to implement the requirements.

“The results in Arkansas validate the most pessimistic of projections,” said Jennifer Wagner, a senior policy analyst with the CBPP.

More than 20% of people in the expansion group targeted by the requirements have lost coverage, more than the 15% predicted by Kaiser Family Foundation.

“Arkansas is a cautionary tale for every other state,” said Judith Solomon, a CBPP senior fellow.

The number of people losing health coverage since the rule went into effect last year exceeds the number of those targeted by the requirement, meaning those who are not working and not exempt. That indicates the extent of how flawed and confusing state communications to beneficiaries are, and the rules are penalizing people who are working or should otherwise be exempt, the CBPP said.

Solomon said, “the reporting itself is even more of a barrier than we expected.” The notices and communications attempted by the state are confusing and hard to understand, with burdensome paperwork and red tape. In addition, the work requirements themselves are not an effective means of promoting employment, which is one of the rationales used by the Trump administration for promoting the idea. Work requirements don’t accurately identify those who can work but aren’t working, provide assessment, or provide support for employment, the CBPP said.

The CBPP said that while many Arkansas Medicaid beneficiaries are working, only 0.5% in the latest month’s report have newly reported work hours. Some of them may have found jobs without the new policy or might have already been working.

Moreover, work requirements are at odds with Medicaid’s objective of providing affordable health coverage to people who wouldn’t otherwise have it and is not an allowable use of Medicaid waiver authority under Section 1115 of the Social Security Act, the report said.

Compounding the problem, the CBPP staffers said, is that even though Medicaid work requirements are supposed to be pilot demonstration projects, states are not required to submit evaluation plans to CMS until months after the waiver is implemented. During the interim, thousands of people lose health coverage, which means future evaluators will not have any baseline data about the population.

If implemented nationwide, CBPP said work requirements could cause 1.4 million to 4 million people among the 23.5 million adult Medicaid enrollees who are younger than 65 and not receiving disability benefits to lose their health coverage. Most of those losing coverage would be people who are already working or should be exempt but would lose coverage anyway. Many working Medicaid beneficiaries have low-wage jobs with irregular hours and little flexibility, so they may not be able to work a set number of hours each month.

Late last year, in a letter to HHS Secretary Alex Azar, the Medicaid and CHIP Payment and Access Commission expressed concern regarding early results from Arkansas’ work and community engagement requirements and asked the administration to pause the program. The CBPP researchers also expressed concern about other states that will begin to implement work requirement waivers this year and next. For instance, they said, New Hampshire’s rules will be even more stringent than the ones in Arkansas.

Kentucky, which was the first state to win CMS approval last year, but was then sued over the requirements, is slated to begin implementing the program April 1, even as the original court case continues. CMS gave a second approval to revamped requirements last November.

Medicaid waiver requirements will be on the agenda this year of the House Committee on Energy and Commerce, which announced its 6 subcomittees Thursday, including the one on health. Energy and Commerce Chairman Frank Pallone Jr, D-New Jersey, took over leadership of the committee this month. “He considers these actions illegal and the Committee will certainly be looking into them this year,” said spokesman CJ Young. Pallone and other Democrats have said that the rules target people earning $15,000 or less per year and are designed to keep people from accessing healthcare.