Medicaid Work Requirement Waivers: Time for CMS to Hit the Pause Button

Yesterday members of the Medicaid and CHIP Payment and Access Commission (MACPAC – a Congressional agency) received a briefing from staff on the implementation of the Arkansas work requirement waiver.

Staff reviewed the latest data from the state as well as the findings from their own inquiries to various stakeholders.  The presentation confirmed my reading of the numbers I discussed in last week’s blog: the demonstration is not working, and beneficiaries are being harmed. 

My colleague Andy Schneider disagrees: “The Arkansas waiver is doing exactly what it was intended to do: terminate Medicaid coverage by weaponizing paperwork. In this case, paperwork is monthly reporting through an internet portal in a state where one third of the population does not have internet access. After just five months, the waiver is achieving its objective:  nearly 8,500 beneficiaries have already been disenrolled, and another 4,800 are at risk for disenrollment at the beginning of November.  It’s a lean, mean disenrollment machine. The Secretary should declare ‘Mission Accomplished’ and pull the plug.”

Regardless of whether Andy is right or not, it’s time for CMS to hit the pause button on work requirement waivers, not just in Arkansas, but also in the other states already approved (Indiana, Kentucky, and New Hampshire) and those with applications pending or on the way to CMS (Alabama, Arizona, Kansas, Maine, Michigan, Mississippi, Ohio, Oklahoma, South Dakota, Tennessee, Utah, Virginia, and Wisconsin).

Here’s why:

Arkansas’s supposed experiment with work requirements is being conducted in a fact-free zone. The hypothesis being purportedly tested in these demonstrations is that requiring work as a condition of Medicaid eligibility will incentivize people who can work to do so.  Testing a hypothesis through a section 1115 demonstration requires data and an evaluation. MACPAC staff reported that “there is no information regarding transitions to work or other sources of health coverage, measures of health or access, use of job training or other resources, etc.”  Staff also reported that there is “no approved evaluation plan in place,” the state is “currently in the process of procuring an evaluator,” and it is “unclear what baseline data is being collected or if a comparison group will be used.”

In other words, although nearly 8,500 beneficiaries have already been disenrolled for the rest of the year in order to test a hypothesis, there is no baseline data, no data on whether these beneficiaries are working, no plan for evaluating the data, and no researcher to conduct the evaluation that would allow anyone to draw a conclusion on the merits of the hypothesis.

As at least one MACPAC Commissioner noted, the Medicaid statute does not require work as a condition of eligibility, and a policy change like that would be the prerogative of Congress, not the Secretary of HHS.  In this case, the Secretary of HHS is asserting that authority to approve work requirement waivers, an assertion now before the federal courts.  

The CMS Administrator, Seema Verma, has made it clear that her agency will continue to use the section 1115 demonstration authority to allow states to impose work requirements.

The MACPAC staff report calls the question.  As of October 8th, they report, 8,462 Arkansas Medicaid beneficiaries—19 percent of those subject to work requirements for three or more months—had been disenrolled, and additional 12,589 beneficiaries were at risk for disenrollment.  They also note that “characteristics of disenrolled beneficiaries are unknown; the state is not currently analyzing data, and few anecdotal reports are available.”  Moreover, staff found, the state is not collecting data on downstream effects of coverage losses”—i.e., what is the impact on safety net providers, on the level of uncompensated care, etc.

These facts are consistent with an unethical experiment on human subjects, not a legitimate demonstration that promotes the objectives of the Medicaid statute.  

Rather than put more beneficiaries—and indeed, the very legitimacy of the section 1115 demonstration authority—at risk, the Secretary should immediately suspend approval of the Arkansas waiver and direct the state to reenroll the nearly 8,500 beneficiaries.  For the same reasons, the Secretary should also suspend the other work requirement waivers he has already approved in Indiana, Kentucky, and New Hampshire until protections against wholesale disenrollments, Arkansas-style, are in place.   

Finally, the Secretary should withhold approval of any additional work requirement waivers until formal, independent evaluations of the current approved waivers have been completed and assessed.  The authority to grant these waivers is in dispute, but after five months of experience in Arkansas, their ability to take Medicaid coverage away from low-income adults is not.  

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.