One Month into Medicaid Work Requirement in Arkansas, Warning Lights are Already Flashing

Arkansas’s Department of Human Services released numbers on its work requirement to a select group of reporters and officials late last Friday, and we just saw them earlier this week. The numbers confirm reports of widespread confusion over the work requirement’s rollout and exacerbate our fears that red tape will eventually lead to significant coverage losses.

We’ve posted the state data below so everyone can see the original source and follow along. These data are for the first month of implementation.  We’ll say up front: our conclusions differ from the numbers reported widely in the press so far, and that’s likely because this is confusing, even for those who follow Medicaid issues closely.

The state is rolling out its work requirement in stages. For the first round, only adults ages 30-49 were required to report their work hours. There were 27,140 people notified that they were subject to the work requirement as of June 1 and required to report their status online by July 1. During the month, that total group dropped to 25,815, as people had their case closed or dropped out of compliance for unrelated reasons.

Of the 25,815 people subject to the reporting requirement on July 1, more than half the group, 15,511 people, received a letter notifying them that they were exempted automatically based on “work, training or other activities” which it appears the agency was able to verify electronically. (page 1) So these folks (60%) did not have to take any action.

That leaves a group of 10,304 people (40% of the first cohort) who were expected to go online and report their work hours or an exemption. Within that group, only 445 people reported and satisfied the 80 hour-requirement to either work, go to school, volunteer, attend job training, search for a job, attend a health education class or show that they met the SNAP work requirements. (page 5)

Another 2,395 people reported an approved exemption, but it’s not clear from the report what all of the approved exemptions were. The most common exemption cited is that an individual is American Indian or Alaska Native (515 people). Other exemptions included pregnancy, caring for an incapacitated person, or alcohol or drug treatment. But the listed types of exemptions do not add up to the total, so some key information is missing.[1]

After removing the remaining 72 people who logged on but were denied an exemption or only reported some work, the state’s data shows that 7,392 people— or 72 percent of the people expected to log on and report—did not take action. (page 8)

The fact that so few people logged onto the website and reported their activity makes sense when you consider that Arkansas ranks 46th in the nation on access to internet, and the only way beneficiaries can report their work or exemptions is online. A recent study by the Urban Institute about Arkansas Medicaid beneficiaries who were likely to not be exempt from the work requirement found that up to 31% of them had no access to the internet in their homes.

It’s also very likely that many people did not receive the notices that they’d be subject to the work requirement: on the second pie chart below (page 2), the agency shows that 39 percent of people removed from the program in June dropped off because the agency couldn’t locate them. Low income households have higher rates of residential instability than higher income ones. A recent study found they move at twice the rate of higher income households. So the state is more likely to have the wrong address on file. The number of people dropped because the agency couldn’t locate them is unrelated to the work requirement, but speak to the agency’s overall administrative churn and challenges faced when trying to communicate with beneficiaries.

This adds up to a problematic first month of implementation to put it mildly. Almost ¾ of those who had to take action online did not and now have one strike against them. Arkansas plans to terminate eligibility after three months of not meeting the new rules. Many of these beneficiaries are probably not even aware of the new rules, may not have gotten the letter given Arkansas’ high rate of not finding clients, or were unable to complete the process online. The state has not dedicated any new resources to help these folks navigate the complex new system.

A recent Kaiser study included nationwide estimates of coverage losses that would result largely from the red tape around a nationwide work requirement, ranging from 5 percent to 15 percent of eligible beneficiaries likely exempt from the work requirement or already working, and from 25 to 50 percent of eligible beneficiaries that are not working for some reason (retired, could not find work, or some other reason). In both of the groups, the study estimates that “most people losing coverage are disenrolled due to lack of reporting rather than not complying with the work requirement.” Arkansas’ early experience reinforces that this conclusion is correct.

Final thought – how is any of this helping anyone address barriers to employment?

[1] It’s also worth noting that American Indians and Alaska Natives are not yet subject to the work requirement but will be in a future phase-in, though that may not have been communicated clearly given the high number of exemptions claimed.  (page 4)