Trump approves Arkansas Medicaid work requirements

The Trump administration on Monday approved Arkansas’s request to impose work requirements on certain Medicaid beneficiaries, but punted a controversial proposal that would have rolled back the state’s Medicaid expansion.

Arkansas became the third state to get permission to impose work requirements after the Centers for Medicare and Medicaid Services (CMS) approved a Medicaid waiver that included a requirement for recipients to work, participate in job training or job search activities for 80 hours a month.

But the administration did not make a decision on a request to roll back the eligibility level for Medicaid beneficiaries. CMS did not outright reject the provision, and Gov. Asa Hutchinson (R) said he is continuing to work with the administration on it.

If that provision had been approved, combined with the work requirements, an estimated 60,000 people were projected to lose coverage.

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“We did not want to wait on a full analysis … we wanted to get this work requirement in place,” Hutchinson said.

Arkansas expanded Medicaid under ObamaCare to people earning up to 138 percent of the federal poverty level and receives federal funding to pay for those new enrollees.

But Hutchinson sought to restrict the program so that only people who are at the federal poverty level would be eligible. The federal poverty line this year is $12,140 for a single person, or $25,100 for a family of four.

The so-called partial expansion was a key test of the limits of the Trump administration’s power on how far states could go to limit Medicaid enrollment. Arkansas officials sought to reduce eligibility, while still getting the same level of federal funding.

Hutchinson said he met recently with Health and Human Services (HHS) Secretary Alex Azar. Hutchinson said Azar is open to the idea of limiting eligibility.

But the provision is still “a work in progress,” Hutchinson said.

State officials said they will begin implementing the work requirements June 1, making them the first state to do so.

If a person fails to meet the requirements for three months, he or she will lose coverage for the rest of that calendar year. That’s the longest lockout period the administration has approved to date.

“This is not about punishing anyone. It’s about giving people the opportunity to work,” Hutchinson said, adding that the goal is to move people out of poverty and “up the economic ladder.”

Kentucky and Indiana are the other states that have been granted approval for work requirements, but Hutchinson noted the Arkansas requirements are the most stringent.

CMS administrator Seema Verma said eight other states are actively seeking approval, and nine others have expressed interest.

People will be exempt from the work requirements in Arkansas if they have a disability, are pregnant, a caregiver or have dependent children. The requirements also do not apply to anyone over the age of 50.

Work requirements are controversial, and despite the argument from states and the administration, experts say there is limited evidence that they actually succeed in improving health outcomes.

Kentucky was the first state to get work requirements approved earlier this year, and is already facing a lawsuit from advocacy groups challenging their legality.

Brad Woodhouse, director of the pro-ObamaCare advocacy group Protect Our Care, called the waiver approval “draconian.”

“By imposing onerous monthly paperwork requirements on working people and forcing Arkansans with disabilities to re-prove their exempt status every two months, today’s Arkansas plan breaks new ground in needless and ideologically-driven cruelty,” Woodhouse said in a statement.

The approval of the waiver also raised the ire of Sen. Ron Wyden (Ore.), the top Democrat on the Senate Finance Committee. Wyden has been urging an ethics investigation into Verma’s potential conflicts of interest.

Prior to becoming CMS administrator, Verma was a private contractor who advised states on their Medicaid waivers. As part of her ethics agreement, Verma recused herself from consideration of the waivers in Indiana and Kentucky.

Verma also provided consulting work to Arkansas. An HHS spokeswoman confirmed that Verma received a limited authorization to participate in the consideration of certain state waivers, but not Iowa, Indiana and Kentucky, which she “personally and substantially” worked on when she was in the private sector.

In a statement to The Hill, Wyden said Verma’s work on the Arkansas waiver shows the administration has an ethics problem.

“Administrator Verma received a blanket ethics waiver from the ethically-challenged former HHS Secretary — Tom Price — just weeks after being confirmed and used that waiver to personally sign off on Arkansas’ misguided and harmful Medicaid proposals. The Trump administration has simply made a mockery of the HHS ethics process,” Wyden said. 

Updated at 4:10 p.m.