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Is Arkansas's work requirement rule working? 

click to enlarge TRY AGAIN: The CMS, led by Seema Verma, wants Arkansas to redo its work evaluation plan. - BENJAMIN HARDY
  • BENJAMIN HARDY
  • TRY AGAIN: The CMS, led by Seema Verma, wants Arkansas to redo its work evaluation plan.

Operating on the theory that employment fosters personal independence and better health outcomes, the Arkansas Department of Human Services now requires that certain nonelderly adults who receive Medicaid benefits must report their work hours to the state. The Arkansas DHS, in turn, is required to show the federal agency overseeing Medicaid that its theory is working. Under the terms of the state’s agreement with the federal Centers for Medicare and Medicaid Services, the DHS must commission an independent evaluation to measure whether the policy meets its goals in the years ahead.

But, although the work requirement started June 1, the state has yet to begin searching for an evaluator, in part because the CMS has yet to approve Arkansas’s draft evaluation design.

On Nov. 1, the CMS sent Arkansas a letter saying the state’s proposed evaluation design “should be better articulated and strengthened” in a variety of areas and requesting revisions. The CMS said the state’s proposed “evaluation outcomes are not well defined and outcome measures are not specified,” among other flaws. That means Arkansas is likely many months away from beginning to evaluate the work requirement policy, despite the fact that it has terminated coverage for at least 8,500 Medicaid beneficiaries in the last two months alone.

In mid-October, DHS spokeswoman Amy Webb said by email that the state submitted its draft evaluation design to the CMS in May and revised it in August. “Since it is still under review with CMS, [a request for proposal] has not been issued for the work and community engagement requirement. DHS is in the process of developing a procurement based on the proposed evaluation plan, pending final CMS final approval,” Webb wrote.

The DHS provided the Arkansas Nonprofit News Network with the draft evaluation design upon request in October. (Since then, it has been made public on Medicaid.gov.) Judy Solomon, a senior fellow at the progressive-leaning Center for Budget and Policy Priorities in Washington, D.C., said Arkansas’s draft appeared to “fall short” in a number of ways.

“I’m kind of not surprised that it hasn’t been approved, because despite my disagreement with CMS [under] the Trump administration allowing these [work requirements], they do seem to at least have some seriousness about … having evaluations that make sense,” Solomon said.

Arkansas’s first-in-the-nation work rule requires certain beneficiaries ages 19-49 who are on Arkansas Works, the state’s Medicaid expansion program for low-income adults, to report 80 hours of work activities each month, report an exemption or lose their insurance. Most people within that age range — such as parents with dependent children in the home — qualify for an exemption. School hours count toward the requirement, as do a limited amount of volunteer and job search hours.

The DHS terminated coverage for approximately 8,500 nonelderly adults in September and October who were noncompliant for three months. That doesn’t necessarily mean those 8,500 people weren’t working or attending school — just that they didn’t report their work hours to the DHS through an online portal. Both DHS data and independent research show the majority of Medicaid expansion beneficiaries are already working.

If a beneficiary’s coverage is terminated, he or she is locked out of Arkansas Works for the rest of the calendar year.

The work requirement has sparked vigorous debate. Are people who have lost their Arkansas Works insurance finding coverage elsewhere — such as with an employer — or are they simply remaining uninsured? Does a work requirement incentivize employment and lead to better health outcomes or does it arbitrarily punish the poor and make them less healthy?

Such questions are more than academic, because the policy is by definition an experiment. It was created under a type of federal waiver issued by the CMS — known as a Section 1115 demonstration — that is intended to foster state-level innovations in Medicaid. The terms and conditions attached to the waiver amendment that created the work requirement say Arkansas must contract with an independent entity to evaluate the program.

Although work requirements are sometimes attached to programs such as welfare or food stamps, no other state has imposed such a rule on Medicaid coverage. (A work requirement in Kentucky was blocked by a federal judge earlier this year, and a group of plaintiffs in Arkansas have filed suit on similar grounds.)

On March 5, CMS Director Seema Verma granted Arkansas its requested waiver amendment. The federal agency told Arkansas DHS Director Cindy Gillespie in a letter that the DHS must “test whether coupling the requirement for certain beneficiaries to engage in and report work or other community engagement activities with meaningful incentives to encourage compliance will lead to improved health outcomes and greater independence.” In its rationale for allowing Arkansas to proceed with the work requirement, the CMS said the program was “likely to assist in improving health outcomes” because employment is “correlated with improved health and wellness.”

But the draft evaluation design that the Arkansas DHS submitted to the CMS did not propose testing the hypothesis that the policy would improve health outcomes. Instead, it says, the evaluation will address “three core questions”: Whether or not work requirements “promote personal responsibility and work,” “encourage movement up the economic ladder” and “facilitate transitions” from Medicaid to other types of insurance.

The work requirement will “resemble an income security program” and should be evaluated as such, the draft design says. The state’s RFP will be limited to bidders who “have demonstrated experience in evaluating the impact of work requirements on participation in income security programs.”

Solomon said Arkansas’s draft “[doesn’t] even raise the question of, ‘Well, maybe if we’re taking coverage away from people, it’s going to make them less able to work, or it’s going to make them less healthy.’ … Why are they looking at this like it’s not a health program?”

The Nov. 1 letter from the CMS raised similar concerns about the state’s lack of a plan to assess what happens to people who lose coverage. “Is disenrollment for noncompliance with community engagement requirements … associated with poorer health outcomes?” the letter asked. The CMS suggested that Arkansas should specify measures that “should capture important features of expected outcomes such as increased employment … and improved health (e.g.: self-reported physical/mental health, other measures of health care utilization).”

Asked in October why health outcomes were not the focus of the DHS’ proposed experimental design, Webb responded by email. “It is widely recognized that employment improves an individual’s health: Work has a positive influence on an individual’s health and security; Returning to work has significant health benefits, especially mental health benefits. … People who work live longer and healthier lives,” she wrote.

She also said the evaluation would survey former beneficiaries who lost coverage and remained uninsured. “The survey will include relevant questions from the National Health Insurance Survey such as an individual’s regular source of care, whether an individual did not receive care because of an inability to pay, and their self-evaluation of their health condition, etc.,” Webb wrote.

Solomon noted that the draft evaluation design only proposes looking at the estimated 69,000 Arkansas Works beneficiaries who were not initially exempt from the work requirement. That’s “a very short-sighted way of doing things,” she said, considering many people move in and out of work.

The Nov. 1 letter from the CMS noted the same issue: “The draft evaluation design does not include any discussion of [exempt] comparison groups.” The letter also urged the state to develop a longitudinal survey to track former beneficiaries “for several years” so as to “understand employment, income, health status, and coverage transitions over time.”

Solomon said her biggest concern about the evaluation was timing, considering thousands of Arkansans were losing coverage every month.

“Where is the RFP? … If you don’t have a final plan and you have people losing coverage left and right, how are you going to get baseline data?” she asked.

MaryBeth Musumeci, an associate director at the Kaiser Family Foundation’s Program on Medicaid and the Uninsured, said states with 1115 demonstration waivers often submit their evaluation designs after the fact. That may not be ideal from a research perspective, but it’s “not uncommon” in the Medicaid world, she said. However, the coverage losses in Arkansas make evaluation particularly urgent.

“I think the concern particularly about what’s going on in Arkansas is because of the disenrollment that’s occurred in the last couple months. ... 8,500 people having lost coverage, and not having, as far as the public knows, an evaluation plan in place,” Musumeci said.

This reporting is made possible in part by a yearlong fellowship sponsored by the Association of Health Care Journalists and supported by The Commonwealth Fund. It is published here courtesy of the Arkansas Nonprofit News Network, an independent, nonpartisan project dedicated to producing journalism that matters to Arkansans. Find out more at arknews.org.
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