New Reports Say Medicaid Eligibility Restrictions are Complex, Costly

Today, the Center on Budget and Policy Priorities (CBPP) released two important reports about the Medicaid program. One report highlights how the Affordable Care Act helped to reduce uncompensated care (services provided that are not paid by an insurer or patient) for states. The second report examines how using waivers to make changes to state Medicaid programs can be harmful for beneficiaries. Recently, many states have used waivers to propose changes to the Medicaid program that have historically not been allowed, like adding premiums or work requirements. Since Arkansas Works, the state’s Medicaid expansion program, was implemented in 2014, the state has used the wavier process on several occasions to change the eligibility requirements.

These are two important issues as the state of Arkansas, and several other states, move forward with changes to their Medicaid program that historically have not been allowed. According to the CBPP findings, new policies like work requirements, premiums, and coverage lockouts are so complex that it is difficult to understand the rules. Plus, implementation will raise administrative costs for states.

Recently, we’ve written a lot about the introduction of a new work requirement in the state’s Arkansas Works program. While on the surface this requirement may appear to spur participation in the workforce, the new report highlights how these changes will act as barriers to coverage by adding bureaucratic red tape that makes it harder for Arkansans to keep their coverage. Although the great majority of Arkansas Works enrollees are already working or will be exempt from the work requirements, complicated reporting requirements will undoubtedly lead to many people falling through the cracks and losing coverage.

The coverage losses will create a domino effect. With more coverage losses and fewer people covered, the state may lose ground because of increasing uncompensated care costs to hospitals and providers (who will have to treat more people without coverage). The risk is even greater in Arkansas; a punitive lock-out period will prevent enrollees from re-enrolling in Arkansas Works until the following calendar year if they fail to comply or report their compliance with the work requirement at three points during the year. Today, Arkansas and other Medicaid expansion states have some of the lowest uncompensated care costs because of Medicaid expansion. Based on the CBPP report, Arkansas saw a 43-percentage point reduction in uncompensated care costs between 2013 and 2015.

Arkansas is expected to go live with its work requirement in June 2018. As the first state to implement this eligibility policy, it is critical that the impact be monitored closely to reduce potential coverage loses, to gauge impact on health care providers and hospitals, and to monitor administrative costs to the state. More information about this work requirement is available at the site created by the Arkansas Department of Human Services.