New Study Finds Arkansas Medicaid Work Requirement Isn’t Working

As readers of SayAhhh! know, we have been closely following the developments in Arkansas – which was the first state to implement a Medicaid work requirement in the second half of 2018 before a federal judge stepped in and put a hold on the state’s Section 1115 waiver. However, prior to the court’s intervention, more than 18,000 Arkansans lost Medicaid coverage in 2018.

A new study by Harvard researchers published in the New England Journal of Medicine finds that the policy failed to meet its purported objective of encouraging work but did drive up the uninsured rate in the state for adults ages 30-49 – those targeted in the first wave of implementation.

These findings confirm my worst fears about this approach – which has been approved by the Trump Administration in 9 states so far with 7 more states seeking approval. The essence of the new “flexibility” is that states can “incentivize” (or perhaps most aptly described as threaten) beneficiaries with the loss of their health insurance if they don’t comply with often complex work reporting requirements. The theory goes that this will encourage them to seek employment.

The Harvard study found that in fact employment rates declined for those affected by the new work requirement while uninsured rates went up – though the vast majority of them were already working or exempt for reasons such as a disability.

Moreover, any incentive policy is premised on the notion that those affected by it have a perfect understanding of the tradeoffs and do not face any barriers in responding to the new rules or other barriers to getting a new job – such as transportation and job training. This is obviously not the case as researchers found.

Lack of awareness and confusion about the reporting requirements were common, which may explain why thousands of persons lost coverage even though more than 95% of the target population appeared to meet the requirements or qualify for an exemption.”

Barring a massive infusion of funds to do outreach and education, no state will be able to achieve this level of awareness – and there is no evidence to suggest that Arkansas or any other state will make this kind of expenditure. Moreover, the federal government has offered no new resources to address barriers such as job training, transportation or child care.

It has been clear to me for some time that the policy was not working to incentivize work – as I blogged about before less than 1% of those affected are newly reporting work. While the new study confirms that this is the case – even worse the results find that the uninsured rate is going up in Arkansas.

Some (including me) have long suspected that the Trump Administration’s signature Medicaid initiative – the promotion of work reporting requirements – is not about supporting better economic or health outcomes for low-income people, but rather about perpetuating inaccurate stigmas AND taking away health insurance from those who rely on Medicaid to cut costs. These new findings offer cold validation for these suspicions.

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.