Arkansas Works 2.0 Brings Even More Changes for Low-Income Arkansans

Although the general legislative session recently ended, the debate on health care in Arkansas is far from over. Lawmakers are expected to come back together for a special session on health in early May to make some key decisions about the future of the state’s Medicaid expansion or Arkansas Works program. Governor Asa Hutchinson announced a proposal to make several changes to the Arkansas Works program, which provides coverage to low-income adults in the state:

  1. Lower the income eligibility for Arkansas Works from 138 percent of the federal poverty level to 100 percent.* This means about 60,000 people in Arkansas will no longer qualify for Arkansas Works. The Governor’s plan is to transition those people to marketplace plans.
  2. Implement work requirements/restrictions for Arkansas Works, which will require non-disabled participants to be employed, undergo job training, or volunteer. These requirements would be like those imposed in the SNAP program, but allow certain exceptions for some people, including students and caregivers.
  3. End policy that uses Medicaid dollars to subsidize employer-sponsored coverage. Last year, a policy was approved aimed at moving employed enrollees to employer-sponsored insurance by using Medicaid expansion funds to lower premium costs. Currently, the policy applies to employers who have recently begun offering health coverage. This proposal will end this option to enrollees.
  4. Give the state greater control to determine eligibility for enrollees in the program. To date, eligibility for Arkansas Works has been determined at the federal level and passed down to our state Medicaid program. Now that the state has improved its own IT system, Arkansas has the capacity to determine eligibility.

The work requirements and capped enrollment are the biggest threats to keeping Arkansas Works beneficiaries covered. Lots of research shows that these types of work requirements are not effective and even counterproductive. One example is the Temporary Assistance for Needy Families (TANF) program after the 1996 welfare reform bill was enacted. Although some people did seek jobs with the help of state-sponsored training and placement programs, these jobs were often low-paying and did not lift families out of poverty long-term. This policy ignores the fact that there are other factors that help sustain long-term employment more than work requirements, like a strong job market, access to health care, and child care grants/vouchers for working parents.

We also know from other states that cut Medicaid enrollment and attempted to transition enrollees to other programs that most people end up without health coverage. For example, in Rhode Island, only about 30 percent of the individuals who were no longer eligible for Medicaid successfully enrolled in another health plan and paid a premium to start their coverage. This highlights a critical issue—marketplace health plans may not be affordable for many people because of additional costs from things like co-pays and prescriptions. Many enrollees at this income level are working, but unable to affordable the cost of private health coverage. This is why many were uninsured before Arkansas Works was created.

These proposed changes also come on the heels of several policy changes that were just implemented following a special session in 2016. Some of these included referrals for work training and eliminating retroactive eligibility that covers medical bills in the three months prior to enrollment. You can read our analysis of these changes in an earlier report on Arkansas Works. At the federal level, Congress is also still considering a bill to repeal and replace the Affordable Care Act, which means we could see even more changes to health care in the near future.

In addition to forcing the families covered by Arkansas Works to remain up-to-date on these ever-evolving requirements, Arkansas is continuing to make changes at the state level with loads of uncertainty about what Congress will do to change the ACA and Medicaid program federally. Without knowing the federal guardrails, it may be premature for the state to move forward with more risky changes to Arkansas Works. These hasty decisions mainly burden Arkansas families by limiting their access to much-needed health care.

Below, watch as AACF Health Policy Director Marquita Little gives an overview of what to expect during the special Medicaid session.

*Based on the 2016 federal poverty guidelines, income eligibility would change from $16,394 for an individual and at $33,534 for a family of four to $11,880 for that individual and $24,300 for the family.