In the First Year Alone, Nearly 50,000 Arkansans Could Lose Medicaid under State’s Work Experiment

WASHINGTON, DC (Nov. 12, 2018) – In June, Arkansas became the first state in the nation to put in place a large-scale experiment that ties Medicaid for thousands of low-income beneficiaries to a complex series of work and reporting rules.

In August, three Arkansas Medicaid beneficiaries filed a lawsuit in the United States District Court for the District of Columbia challenging the federal government’s approval of the Arkansas Medicaid work demonstration. The lawsuit (Gresham v. Azar) seeks to block the implementation of the Arkansas Medicaid work demonstration, arguing it is contrary to law and poses major health risks for the poorest and most vulnerable citizens.

Last week, 40 public health scholars, including six Deans and Associate Deans at schools of public health, public policy and public administration, filed a public health “friend of the court” brief to support the three Medicaid enrollees.

In allowing the state to proceed with a demonstration designed to remove potentially tens of thousands of people from the Medicaid program under the guise of experimental research, the Trump Administration acted outside the scope of its legal authority under 1115 of the Social Security Act, according to the scholars. They go on to say that the administration permitted the Arkansas demonstration to launch without meeting the requirements of the experimental statute itself, including failure to put evidence-based, objective evaluation in place that could inform policymakers about the impact of the experiment on coverage, access to care or health. 

The amicus brief offers impact estimates for individuals losing coverage in the first year of the demonstration as well as the potential consequences arising from the impact of the experiment on health care systems anchoring the state’s poorest communities and the experiment’s broader economic impact. 

“About 50,000 people in Arkansas are at risk of losing the protection of health insurance in the first year alone if the U.S. Department of Health and Human Services is permitted to proceed with an experiment designed to limit thousands of eligible people’s access to insurance,” said Lynn R. Goldman, Michael and Lori Milken Dean of the Milken Institute School of Public Health at the George Washington University (GW Milken Institute SPH) and one of the public health deans joining the amicus brief.

Research estimates presented in the amicus brief for the first time show that by the end of the first full year of implementation, between 19 and 30 percent of the approximately 161,000 people subject to the state’s work requirements – between 30,700 and 48,300 – will lose coverage. 

The Trump Administration contends that work requirements promote health, but the brief argues that the administration presents no evidence showing that work makes people healthy, only that healthy people are more likely to work. In fact, they say many Medicaid recipients suffer from chronic conditions that make it difficult or impossible for them to work without health insurance. Many others do work, including those who hold down more than one job and whose jobs offer no health benefits.

Furthermore, the brief argues, by putting Medicaid coverage at risk for thousands, the experiment undermines rather than promotes Medicaid objectives, contrary to federal law. Coverage is at risk not only because of the work requirements but also because of the added complexity of an online reporting system that many low-income residents are unable to navigate because they lack internet access. The brief further argues that, contrary to law, the administration simply ignored massive evidence in the administrative record showing the likely harmful impact of the experiment.

Indiana, New Hampshire, and Wisconsin have also been approved to launch work experiments; Kentucky’s approval was halted by the court in Stewart v. Azar, which was decided at the end of June. Other states are in the process of seeking approval for work requirements and the implementation of other changes such as premiums, lock-out periods, expanded reporting rules and other policies that also threaten coverage.

In April, Deans, Chairs and Scholars filed an amicus brief in the Stewart case. In halting the experiment, Judge James Boasberg ruled that contrary to its legal obligations under the federal experimental statute Medicaid work demonstrations, the administration did not adequately consider whether Kentucky’s work requirement plan “would in fact help the state furnish medical assistance to its citizens, a central objective of Medicaid.” The judge cited the scholars’ amicus brief in his decision to vacate the approval of Kentucky’s work requirement.

The amicus brief in the Gresham case points out that the federal government ignored the spillover effects of its approved demonstration, particularly its impact on the health care safety net in the poorest communities that benefitted most from the Medicaid expansion and that risk loss of access to care on a community-wide basis. One example of this spillover, the brief points out, is the state’s community health centers; based on the proportion of patients who could lose coverage, health centers in Arkansas could experience revenue drops steep enough to eliminate care for up to 2,859 patients.

The amicus brief, which can be accessed here, was filed Nov. 7. The Deans and scholars were represented by the Washington, DC law firm of Feldesman Tucker Leifer Fidell, LLP.