Political News

Federal Panel Alarmed as Thousands Are Dropped From Medicaid in Arkansas

Posted September 14, 2018 7:49 p.m. EDT

WASHINGTON — Members of a federal advisory panel expressed alarm this week that 4,350 low-income people in Arkansas had lost Medicaid coverage because they failed to show they were complying with new work requirements held up by the Trump administration as a model for the nation.

“I hope these data scare the pants off people in Arkansas,” said Dr. Christopher Gorton, a member of the panel, called the Medicaid and CHIP Payment and Access Commission.

The chairwoman of the panel, Penny Thompson, said the data — the first for any state enforcing a work requirement — were “very concerning” and “very worrisome.”

The Trump administration approved Arkansas’ request to impose work requirements on certain Medicaid beneficiaries in March, one of the first of a wave of applications from Republican-run states. The administration has been encouraging work requirements for a variety of federal support programs, from food stamps to housing subsidies, and because Congress has balked, administration officials have turned to state governments to push ahead.

To keep their coverage, Medicaid beneficiaries in Arkansas generally must report 80 hours of “work activities” each month or show they are eligible for an exemption. Work activities include employment, job training, education and volunteering.

Gov. Asa Hutchinson of Arkansas, a Republican, said Wednesday that some people “fully complied by taking advantage of work opportunities” under the new rules. More than 1,000 people found jobs, often with help from the state, he said.

But, Hutchinson said, “some simply chose not to comply.” Those are the ones who will lose their coverage for the remainder of the year, he said.

The Census Bureau reported this week that progress in reducing the number of Americans without health insurance stalled last year. But Arkansas made remarkable progress in previous years, mainly because of the expansion of Medicaid under the health care law, health policy experts said. The proportion of Arkansas residents who are uninsured fell to 7.9 percent in 2016 and 2017, just half of the uninsured rate of 16 percent in 2013.

Within hours after Arkansas announced that 4,353 people would be dropped from Medicaid, Seema Verma, the administrator of the federal Centers for Medicare and Medicaid Services, posted her reaction on Twitter.

“I’m excited by the partnerships that Arkansas has fostered to connect Medicaid beneficiaries to work and educational opportunities,” she wrote, “and I look forward to our continued collaboration as we thoroughly evaluate the results of their innovative reforms.”

Verma has championed work requirements as a way to lift people out of poverty. In addition, she said, work and work-related activities can improve the health of Medicaid beneficiaries.

The Medicaid commission — a nonpartisan agency that advises Congress, the Department of Health and Human Services and states — met in Washington on Thursday and Friday and decided to seek more information on the Arkansas program, with the aim of making recommendations later this year.

Toby Douglas, a member of the commission and a former director of the California Medicaid program, said federal and state officials should hit the “pause button” on Arkansas’ experiment until they understand why people are not responding to notices warning about the loss of Medicaid.

Of the 60,000 people subject to work and reporting requirements last month, 19,400 were already working, and 23,050 others qualified for exemptions because, for example, they were “medically frail” or had young children at home, Arkansas officials said. About 1,200 people reported meeting the work requirements after being notified of their obligation.

But 16,350 people, or 27 percent of the total, failed to meet the requirements, in most cases because they did not report any work activities.

Under the state’s rules, beneficiaries who fail to meet the requirements for any three months in a calendar year can be dropped from Medicaid for the remainder of the year.

Indiana, Kentucky and New Hampshire have also received approval from the Trump administration to impose work requirements for Medicaid. Eight other states — Arizona, Kansas, Maine, Mississippi, Ohio, South Dakota, Utah and Wisconsin — have formally applied for similar waivers.

A federal district judge blocked the Kentucky plan in June, after finding that federal officials had failed to consider the state’s estimate that 95,000 people would lose Medicaid coverage.

Ray Hanley, the president of the Arkansas Foundation for Medical Care, which runs a call service center for the state Medicaid program, said his organization had made telephone calls to help the people being removed from the rolls.

Of the 4,353 Medicaid beneficiaries, Hanley said, “many cannot be found, don’t respond, don’t return phone calls, don’t open their mail.” “They have had an ample opportunity to get the help they need,” said Hanley, a former Medicaid director in Arkansas who strongly supported expansion of the program. “Some have found jobs, don’t need Medicaid and did not respond.”

Hanley said Arkansas had to make the expanded Medicaid program “a little more conservative,” by adding work requirements, in order to get the three-fourths vote in each house of the state Legislature needed for a bill providing funds for the program.

“I’m getting tired of out-of-state critics who sit 1,000 miles away and complain, without taking the time to understand all we’ve done to help people,” Hanley said. “It’s hard to help people whom you can’t find.”

Cindy Gillespie, the director of the Arkansas Department of Human Services, said the state had made extensive outreach and education efforts that included sending more than 59,000 letters, 77,000 emails and 6,100 text messages; making more than 150,000 phone calls; and “even going door to door talking with beneficiaries” subject to the work requirements.

But lawyers for Medicaid beneficiaries said that some were unaware of the reporting requirements or did not have access to the internet and were being dropped from the rolls even though they worked or could qualify for an exemption. Alan R. Weil, another federal Medicaid commission member, said the “rapid implementation of work requirements” has proved to be “a risky proposition.”

Thompson, the chairwoman of the commission, said the panel would seek more information about the situation in Arkansas. But, she said, “it’s my sense from the commissioners that, as a group, we have a serious level of concern with the information that we are seeing.”

Panel members agreed that states, as laboratories of democracy, should be allowed to experiment. Weil said the panel was not suggesting that the work requirements were “fatally flawed,” but he added, “I’m concerned about people’s real lives.”

Hutchinson said the Arkansas program struck a balance between compassion and fiscal responsibility. The state, he said, pays health insurance premiums averaging $570 a month for Medicaid beneficiaries. With 4,353 fewer people on the rolls, he said, the state expects to save $30 million a year.