An Early Look at Implementation of Medicaid Work Requirements in Arkansas

Arkansas is the first state to implement a Section 1115 waiver that conditions Medicaid eligibility on meeting monthly work and reporting requirements. The Centers for Medicare and Medicaid Services (CMS) approved Arkansas’ waiver amendment on March 5, 2018, and the new requirements took effect for the initial group of beneficiaries on June 1, 2018. As of September 9, the state reported that more than 4,300 enrollees have lost Medicaid coverage as a result of the new work and reporting requirements, and another 5,000 were at risk of losing coverage with another month of non-compliance.

This brief analyzes the early experience with implementation of work and reporting requirements in Arkansas, based on publicly available data and information, as well as targeted interviews with state officials, health plans, providers, and beneficiary advocates conducted in August and September 2018. Key findings include the following:

1. The early stages of implementation of the new work and reporting requirements necessitated substantial outreach and education efforts and enrollees’ creation of online accounts.  

   Despite a robust outreach campaign conducted by the state, health plans, providers, and beneficiary advocates, many enrollees have not been successfully contacted. Telephone calls have been a focus of state and health plan outreach efforts, but accurate phone numbers are often not available, or individuals do not answer calls or return messages from the state or health plans. Emails, social media and online videos appear to have had a limited reach among enrollees who may lack access to computers or the internet. Low literacy levels, non-English proficiency and the complexity of the requirements also make outreach, education and compliance more difficult.

   The process to set up an online account for enrollees is complicated. Non-compliance with the new requirements to date is attributed to lack of knowledge and the complexity of new requirements. Lack of computer literacy and internet access among enrollees creates barriers to setting up online accounts as well as ongoing reporting. Providers, health plans, and beneficiary advocates all agreed that a number of enrollees need individualized help to walk through the online setup and reporting process, yet few enrollees are seeking assistance from registered reporters.

2. Ongoing implementation requires complex data matching and sharing by the state, and enrollees must regularly report exemptions or work activities.

   The state is using data matching to exempt about two-thirds of enrollees from the reporting requirements. Data sharing across agencies and plans was generally working well.

   For non-exempt enrollees, reporting of exemptions or work activities requires multiple steps. Program rules about the frequency of reporting exemptions and hour limits for certain activities are complex. In September, the first month that individuals could lose coverage for failure to report work or exemptions, there were some technical issues that interfered with online reporting.

   Some enrollees who may qualify for an exemption but are not identified by the state data matching may fall through the cracks, and others may face barriers to work. Transportation is a major barrier to work throughout Arkansas, and there are few jobs for people with low educational levels; these challenges are particularly significant in rural areas of the state. The state has a good deal of information related to the work requirement online, but enrollees need internet access, and key details about volunteer or training opportunities are often missing. If substantial numbers of enrollees subject to the new requirement seek services from the Department of Workforce Services (DWS) in the future, there may be a shortage of caseworkers and supports without additional resources. Medicaid funds cannot be used to pay for work supports.

3. Coverage losses could result in gaps in care as well as increases in the uninsured rate and uncompensated care costs for providers.

   Disenrollment of healthier enrollees could have implications for the risk pool that would result in higher premiums. The formal waiver evaluation should provide more data, but details about the evaluation plan are not yet publicly available.  

Looking ahead, while it is still early in implementation for Arkansas, these early experiences have implications for the future of such programs:

• Implementation is complex and may result in increased administrative costs for the state and other stakeholders.
• Outreach is difficult, especially in rural areas and for vulnerable populations.
• Many who remain eligible for Medicaid could lose coverage if they fail to navigate the processes to verify work status or qualify for an exemption.
• While the stated goal may be to increase work, early data suggest that a small share of enrollees may be engaging in new work-related activities.
• Further into implementation, additional work support funding may be required to boost employment, but Medicaid cannot pay for these services.
• Coverage losses could result in gaps in care with consequences for those with chronic physical and mental health care needs, as well as increases in the uninsured rate and uncompensated care costs, putting financial stability for providers at risk.