As Medicaid Work Requirements Spread, More Expected to Lose Health Care

Wisconsin just got approval to implement the new rule, and it will take effect in two other states in January. Meanwhile, more than 8,000 people have lost health insurance in Arkansas -- many who may comply with the rule but not know about it.
by | November 5, 2018
Man on a computer while getting dialysis.
"Everything is being driven to a website, which isn’t sufficient. We know the population we serve has trouble accessing technology," says Dawn McKinney, policy director of New Hampshire Legal Assistance. (AP/Rich Pedroncelli)

Last week, the Trump administration approved a fifth state's request to add work requirements to Medicaid, the nation's health insurance program for the poor. Wisconsin is also the first state to receive approval for work requirements since a federal court struck them down in Kentucky.

Seema Verma, the administrator of the Centers for Medicare and Medicaid Services (CMS), addressed the pushback in her approval letter to Wisconsin.

"I recognize that there are people who disagree with this approach. We will not retreat from this position," she wrote, adding that requiring Medicaid recipients to have some form of employment can "help lift individuals out of the shadows of opportunity and into its light."

Under Wisconsin's new rules, childless adults between the ages of 19 and 49 will be required to work, volunteer, be in school or in a job training program for at least 80 hours a month. Medicaid recipients who don’t comply after 48 months will get kicked off their health insurance. The state is also allowed now to charge premiums for what is normally free and to raise those premiums for people with riskier health behaviors, such as smoking.

CMS took a stand, however, against Wisconsin's controversial proposal to drug test Medicaid users.

Of the four other states CMS has given the greenlight to, only Arkansas has implemented work requirements. Indiana and New Hampshire will start enforcing them in January, and Kentucky's have been sent back to CMS for review.

Since the experiment took effect in June in Arkansas, more than 8,000 people have lost health coverage because of work requirements and can't reapply for them until January. Health care experts are warning of similar losses in Indiana and New Hampshire.

"This is what we predicted. It shows that a lot of eligible people are getting caught up in this. It's not that they don't qualify, it's that they don't know," says Jennifer Wagner, policy analyst for the Center on Budget and Policy Priorities.

More than 4,000 Arkansans lost their benefits in September, followed by another 4,000 this month. Of 73,266 Medicaid users, 74 percent were exempt or complied with the work requirement in September. But 23 percent didn’t report their activities at all, according to data from the Kaiser Family Foundation.

While Arkansas Republican Gov. Asa Hutchinson, who is expected to win reelection this week, said in September that he doesn’t "like that number" of suddenly uninsured people, he said the work requirement is working as intended and called it "a proper balance of those values that we hold important."

Like Arkansas, Indiana and New Hampshire mandate Medicaid users to prove their compliance with the work requirements through a website, which experts say is problematic.

"There’s not even a phone number on the letter [beneficiaries received notifying them of work requirements]. Everything is being driven to a website, which isn’t sufficient. We know the population we serve has trouble accessing technology," says Dawn McKinney, policy director of New Hampshire Legal Assistance.

Furthermore, experts like Kosali Simon, a health policy professor with Indiana University, point out that policy changes like these require technical and administrative changes, which can be glitchy.

"The devil is in the details. I just hope the process is set up in a way that there can be a mid-course correction if needed," says Simon. "Or if something isn’t working as intended, there’s flexibility there [and] constant feedback coming back to the state."

New Hampshire, however, will allow in-person reporting. Wagner will be watching to see if that helps lower income and older people who lack access to technology.

The exact rules vary in Indiana and New Hampshire, and are slightly different from Arkansas', but experts say they will still result in coverage loss. Arkansas and Indiana’s rules exempt people 50 and older, but not New Hampshire’s. New Hampshire also doesn’t exempt parents like the other two states do. New Hampshire requires people to work or volunteer 100 hours per month, 20 more than Arkansas, but Indiana only requires 20 hours total. Indiana’s changes will be rolled out more slowly, with a six-month grace period before people start losing insurance, while New Hampshire beneficiaries will only have two months to comply. Arkansas has a three-month grace period.

Kentucky's stuck-down rules required nondisabled adults ages 19 to 64 to work, volunteer or be in school at least 80 hours a month. Pregnant women, primary caregivers, former foster children and those unable to work for medical reasons were exempt. The state also required recipients to report income changes, and to pay premiums if they gained coverage under Medicaid expansion.

In Indiana, the state has been charging premiums for Medicaid since 2015, which has resulted in more than 25,000 people being dropped from their insurance. Because Indiana’s new rules apply to fewer people -- and the state has already kicked off people who weren’t paying their premiums -- there isn’t expected to be a huge wave of losses there, says Simon.

As January approaches, New Hampshire is working to educate the public about what’s coming. They’re creating print materials, social media outreach and doing trainings with providers on how to talk to their Medicaid patients.

"Doctors are going to have to have these conversations with their patients. To tell them ‘I’m treating you for diabetes, and I need to continue to keep treating you. There’s a work requirement now, are you meeting those hours? Let's figure out if you meet an exemption," says Holly Stevens, health policy coordinator for New Futures, a New Hampshire-based health nonprofit.

But given the inherently complicated nature of Medicaid, and work requirements, it's going to be an uphill battle to make sure patients don't lose their health care -- even if they are eligible.

"The complexities of all of these different rules makes even my head spin," says Wagner. "So even when you have these guardrails in place, people don’t know about them, so they don’t take advantage of them."

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*CORRECTION: A previous version of this wrongly stated that a federal court ruled Kentucky's Medicaid work requirements were unconstitutional. A federal court struck them down -- but not on the basis of violating the constitution. The story has also been updated to clarify that parents are exempt from Medicaid's work requirement.