Under the terms of its agreement with the federal government, Arkansas’s work requirement for certain Medicaid beneficiaries requires the state to commission an independent evaluation to measure whether the policy is meeting its goals. But as of Nov. 1, the federal agency overseeing Medicaid has yet to approve an evaluation design. That means the state has not started searching for an evaluator — even though the work requirement has been up and running since June 1.
In an email, Arkansas Department of Human Services spokeswoman Amy Webb said the state submitted a draft evaluation design to the federal Centers for Medicare and Medicaid Services (CMS) in May and revised it in August. “Since it is still under review with CMS, an RFP 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 under a freedom of information request. Judy Solomon, a senior fellow at the progressive-leaning Center for Budget and Policy Priorities in Washington, D.C., said the draft appears 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-of-its-kind work rule requires certain beneficiaries ages 19 to 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. 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 — 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 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 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 creating 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 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, 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 Arkansas DHS submitted to 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 says. Its 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?”
Asked by email 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.