A panel of three judges upheld a previous court decision challenging the legal basis of Medicaid work requirements in Arkansas.
The Washington D.C. appeals court’s decision on Friday affirmed a prior ruling that the Department of Health and Human Services failed to consider whether the state’s work requirements would fulfill Medicaid’s objective of providing medical coverage to low income individuals and families, and failed to consider whether they would result in coverage loss.
Judge James Boasberg, of the United States District Court for the District of Columbia, wrote in his March 27 ruling that Arkansas’ work requirements were “arbitrary and capricious.” He used similar language in his prior ruling against Kentucky’s work requirements.
Several states had proposed Medicaid “community engagement” requirements after the Centers for Medicare and Medicaid Services (CMS) issued guidelines supporting them in 2018. But few have actually gone through with their proposals, after seeing the lawsuits and public backlash that ensued.
Arkansas was the first state to implement work requirements in 2018, after getting an approval through a section 1115 waiver from the Department of Health and Human Services. The new policy required adults covered by Medicaid expansion to work at least 80 hours per month, with exceptions for adults with disabilities and those over age 49.
Roughly 18,000 people were estimated to lose coverage as a result of the policy. According to a study published in the New England Journal of Medicine, the uninsured rate for Medicaid-eligible adults ages 30 to 49 increased from 10.5% in 2016 to 14.5% in 2018. The policy also didn’t result in more Medicaid-eligible adults holding jobs; employment rates actually fell during that time, from 42% to 39%.
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One of the main concerns raised by critics was that the reporting requirements would be burdensome enough to cause adults to lose coverage, whether they were working or not. Of the 10 Arkansas residents that filed the original complaint in August of 2018, many of them reported not having access to a computer, or losing employment as a result of a health condition.
One of the plaintiffs, Adrian McGonigal, had a job in Southwest Poultry’s shipping department prior to the work requirements going into effect. He was not provided medical insurance through his work, but was able to gain coverage after Arkansas expanded Medicaid.
McGonigal initially recorded his employment, but didn’t realize he had to report his work hours every month. He also lacked access to a computer. He later found out he lost his coverage when a pharmacist told him a prescription for his health condition was no longer covered, and that he would have to pay $800. McGonigal did not buy the prescription, and later when his health condition flared up, he lost his job from missing several days of work.
It appears that several other Arkansans also faced difficulties meeting the reporting requirements, according to numbers shared in Boasberg’s ruling. Only 12.3% of those who were subject to the work requirements reported any kind of qualifying activity between June and November.
“It bears mentioning here, however, that the State’s outreach efforts may well be falling severely short,” Boasberg wrote in his ruling.
So far, a total of seven states received approval from HHS for work requirements, according to the Kaiser Family Foundation’s tracker of Section 1115 waivers. Another 10 waivers are pending approval.
Indiana and Michigan had implemented work requirements, but both programs now face lawsuits. Several more states — including Arizona, Ohio, South Carolina, Utah and Wisconsin — received approval but have not yet implemented them.
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