Arkansas wins federal permission to impose Medicaid work requirements

Arkansas on Monday became the third state to win the Trump administration’s permission to compel tens of thousands of residents on Medicaid to work or prepare for a job. But the announcement in Little Rock demonstrated the polarizing politics that still swirl around the public insurance program for the poor in some conservative states.

In a paneled conference room in the state Capitol, Gov. Asa Hutchinson, R, smiled broadly as he stood alongside Seema Verma, administrator of the federal Centers for Medicare and Medicaid Services, and watched her sign the official document allowing the work requirements.

The document, however, granted only part of what Arkansas had sought.

While seeking new conditions for some Arkansans to qualify for Medicaid, the state made a novel request last year: One of the few Southern states to expand Medicaid under the Affordable Care Act, it told federal officials that it wanted to partly retreat. Instead of including people with incomes up to 138 percent of the federal poverty line, as designed in the ACA, Arkansas wanted to set its expansion limit at 100 percent of poverty – a change that would jettison an estimated 60,000 people from the program.

In their joint announcement in Little Rock, the governor and Verma said that part of the request was being denied. “We are continuing to work through the issues on that,” Verma said, without elaborating on what the issues were or whether the idea might ever be approved.

Hutchinson focused in his remarks on a plan by Arkansas officials to begin phasing in the work requirements more quickly than the two other states – Kentucky and Indiana – that have received similar permission since the CMS issued a new policy in January. It invited states to add requirements for many able-bodied people to qualify for Medicaid.

And the governor did not mention that, with state lawmakers scheduled to finish their session this week, disputes over the Medicaid expansion are deep enough that the state Senate may not have enough votes to approve a budget for the agency that runs the program.

It was the Legislature that passed a bill requiring the idea of shrinking the expansion to be included in the state’s federal application for the work requirements. Roughly a half-dozen Republican senators, who have opposed the expansion all along, now need to decide whether to vote to fund the whole thing or to reject the appropriation for the state’s Department of Human Services.

Under the ACA, the federal government paid the entire cost in the initial years for any state that chose to expand Medicaid. The state’s share has been creeping up and eventually will reach 10 percent of the cost. In Arkansas, a Democratic governor and GOP majority in the Legislature agreed on expansion in 2013 and created a unique system in which the state buys private health plans through the ACA’s insurance marketplaces for people in the expansion group.

Ever since, funding for the Arkansas Medicaid agency has been a perennial legislative fight.

With the days ticking down in this session, “I don’t think it has the support in the Senate,” said Republican Sen. Gary Stubblefield, a dairy farmer who wants to freeze the expansion so no new people could join that part of the program.

Stubblefield said the proposed budget for the coming year does not include any extra money for a pivotal element of the work requirements: workforce development tohelp people train for and look for a job.

In many ways, Arkansas’ version of work requirements resembles those in Kentucky and Indiana. They compel people to have a job, be in school or volunteer for at least 80 hours per month. The requirements will apply to able-bodied adults unless they qualify for an exemption because they care for a young child, are pregnant, are medically or mentally unfit to work, or are being treated for addiction, among other reasons.

Arkansas is targeting people ages 19 to 49 – a younger end point than in the other two states. And individuals will need to document every month that they are fulfilling the rules – more frequently than in the other states. A person who fails to do so for three months will be removed from the program and locked out until the next year.

According to a Department of Human Services spokeswoman, the requirements will begin in June for people ages 30 to 49, and the state estimates that nearly 40,000 of the 98,000 Medicaid expansion recipients will need to start complying. The requirements for younger recipients will start in 2019.

Verma met Monday with the governor and more than a dozen state senators and representatives who have been holdouts in funding the Medicaid program for the coming year.

Stubblefield said he was impressed that, by Verma’s description, the Trump administration is open to work requirements resisted by the Obama administration. Nonetheless, he added, “I still have some more questions before we vote.”