Arkansas could lose up to $340M because of Medicaid work requirements

Hospitals cost
If enrollment predictions hold true, Arkansas could lose eight times as much as it would save as a result of work requirements. (Getty/ronstik)

A new analysis shows that as many as 48,000 adults could lose Medicaid coverage in Arkansas over the next year, leaving up to $340 million in federal funding in jeopardy.

The new rules, which require Medicaid beneficiaries to work at least 80 hours per month, could put a significant dent in the state’s health insurance coverage gains, according to an analysis by the Commonwealth Fund. Between 30,700 and 48,300 adults could lose Medicaid benefits over the course of a year because they don't meet the new requirements. That represents 19% to 30% of the 160,000 beneficiaries subject to the regulations.

Analysts noted that coverage losses mount over time, and even if beneficiaries work, their employment may fluctuate, or they may be unable to work consistently. Already, the state has reported losing more than 8,000 Medicaid beneficiaries in September and October.   

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RELATED: Democratic lawmakers say Medicaid work requirements could force families off coverage

Beyond the coverage losses, however, the state could pay a price economically, writes Sherry Glied, Ph.D., dean of the Robert F. Wagner Graduate School of Public Service at New York University. Using 2013 federal cost data, she estimates that the state could lose between $200 million and $340 million in federal funds in 2020 if those enrollment estimates prove correct.

State spending would drop by $25 million to $40 million due to lower enrollment, meaning the state would lose more than eight times as much in federal dollars than it would save.

“Imposing a work requirement will generate state savings of just $8 to $13 per resident per year,” she wrote. “In exchange, Arkansas will forgo federal funding equal to about 5% of its total state tax revenue collection—or between $71 and $112 per resident.”

The Centers for Medicare & Medicaid Services is embroiled in legal battles around the work requirement waivers in both Arkansas and Kentucky. But the administration is standing firm on its position to stick by what they call “community engagement,” approving Medicaid work requirements in Wisconsin last week.

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