Study: Arkansas Medicaid work requirement increased medical debt, didn't boost employment

LITTLE ROCK (KATV) — A Harvard study published this week has outlined how Arkansas' Medicaid work requirement left Arkansans with more medical debt, less affordable healthcare and had virtually no effect on the state's workforce.

The work rule, which President Donald Trump allowed states to implement in 2018, required able-bodied Arkansas residents to work, train or volunteer at least 20 hours a week to keep their Arkansas Works health insurance plan. Less than a year after it was implemented, it was blocked by a federal judge who called the requirement “arbitrary and capricious."

Four Harvard University professors and one Ph.D. candidate conducted surveys over three years beginning in 2016, before the work rule was put in place, and ending 18 months after the requirement ended. They spoke with 8,661 Arkansans over the phone.

In the nine-page study, they wrote that their objective was to track the second-year impacts of the landmark policy. Ultimately, they found the policy didn’t work and cost the state, federal government and Arkansas residents millions.

“We found no evidence that the policy succeeded in its stated goal of promoting work and instead found substantial evidence of harm to health care coverage and access,” they wrote.

The Department of Human Services reported in January of 2019 that 60,680 people were subject to the new requirements. By that time, almost 16,000 people had lost their health coverage. Of those who were kicked off, only 1,232 didn’t meet the requirements. The rest had their cases closed by the state due to other reasons like failure to return the requested information, increased income or out-of-state moves.

DHS estimated the waiver would save the state around $49.4 million. But the policy reportedly cost the state and federal government an estimated $26.1 million to implement. And the only thing to show for the expense was coverage losses and more medical debt, the study says.

Half of the middle-aged Arkansans who lost their coverage told researchers they had "serious" problems paying off medical debt; 56 percent said they delayed medical care because of cost and 64 percent said they didn't take their medications because they were too expensive.

Part of the problem, according to the study, was that Arkansans didn’t know about the program in the first place. Many lost their insurance without knowing why.

Arkansas Department of Human Services Director Cindy Gillespie said during a news conference in March 2018 that the department was sending out letters detailing the new policy. People had until June of that year to submit their proof of work or exemption notice to the state.

The department said in January 2019 that it had made over 230,300 phone calls, sent almost 600,000 letters, sent 311,934 emails, sent over 38,000 text messages and made 918 social media posts about the requirements.

But the Harvard study found more than 70 percent of Arkansans were unsure whether the policy was even in effect. About 35 percent of people ages 30-49 who were enrolled in Arkansas Works hadn’t heard about the policy at all. And even if they knew, people said it was hard to report the work they’d done to meet the requirements.

“Some of the logistical decisions made by Arkansas policymakers made it harder for people to report data to the state,” the study says.

More than 95 percent of the people researchers interviewed met the state’s qualifications or should have been eligible for an exemption.

“This suggests that barriers to reporting data to the state, rather than not meeting the requirements themselves, were the main cause for coverage losses in 2018,” the study says.

If people would have been able to report their work over the phone, through the mail, or in-person, some would have kept their insurance, according to the study.

“There was zero connectivity between Medicaid recipients and those with the Division of Workforce Services," state Sen. Missy Irvin, R-Mountain View, said. "You had all of those different programs available that there was no communicating between the agencies. And so that’s my biggest takeaway, it's how do you break down those silos and how do we work together within our agencies to serve that person ... ?"

When researchers compared Arkansans ages 30–49 with other age groups and other states without work requirements, they found no significant changes in employment, community engagement status, or the number of hours worked between 2018, when the work rule was in effect, and 2019, after the work requirement was blocked.

Advocates for Medicaid beneficiaries, including Arkansas Advocates for Children and Families Director Rich Huddleston, spoke openly against the requirements last year, calling them “deeply flawed.”

“The study reinforces what those of us opposed to work requirements knew from the beginning -- that these types of mechanisms are flawed and they don’t work.” state Sen. Greg Leding, D-Fayetteville, said.

U.S. District Judge James E. Boasberg, who called the restrictions “arbitrary and capricious,” blocked them in both Arkansas and Kentucky in March 2019. Most of the Medicaid coverage losses in 2018 were reversed after his court order, according to the study.

In February 2020, a federal appeals court panel in Washington again blocked the Trump administration's Medicaid work requirements.

“If we truly want to encourage work, we need to stop efforts to take away health insurance from people who need it and look at policies that improve our economy, provide more jobs at a livable wage, and help train people for those jobs,” Huddleston said in a statement after Boasberg’s ruling. “This policy was designed to make it harder for low-income Arkansans to keep coverage, and unfortunately it was very successful while it was in place.”

Gov, Asa Hutchinson said on Friday that he would review the survey findings to see if there are any useful "corrective measures" for the state to take if courts allow the work requirements to be reinstated. But he said he was "puzzled" at the studies methodology which compared Arkansas to Texas, who has never been a Medicaid expansion state. An Arkansas Department of Human Services spokesperson was not immediately available to comment on the study Thursday.

“Our study showed that Arkansas’s work requirements led to coverage losses associated with important negative impacts on medical debt and affordability of care without improving employment,” the authors of the study said. “Our results should provide a strong note of caution for federal and state policymakers considering work requirement policies in the future.”