CMS issues split decision on Arkansas Medicaid waiver

Medicaid on paper and a stethoscope
CMS issued a split decision on Arkansas' Medicaid waiver request. (Getty/designer491)

The Trump administration on Monday approved Arkansas’ request (PDF) for a Medicaid work requirement but deferred a decision on the state’s request to roll back its Medicaid expansion that has added 300,000 adults to the program.

Arkansas had sought to reduce the number of people eligible for Medicaid by allowing only those with incomes below the federal poverty level, or about $12,140 for an individual, to qualify. For the past four years, Arkansas Medicaid covered everyone with incomes under 138% of the poverty level, or about $16,750. The new policy would have cut the number of people eligible for Medicaid in the state by about 60,000 people.

Seema Verma, administrator of the Centers for Medicare & Medicaid Services, who announced the decision, has said her goal as head of the program was to grant states more flexibility in running their Medicaid programs than they’ve had before.

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Arkansas follows Indiana and Kentucky this year in winning CMS’ approval for the work requirement. Arkansas plans to start the new requirement affecting adults under age 50 by June, making it the first to do so.

RELATED: Kentucky officials file lawsuit to defend Medicaid work requirements

Verma recused herself on CMS’ decisions involving Indiana and Kentucky because she used to consult with those state Medicaid agencies before joining the Trump administration in 2017. As a healthcare consultant, she also worked with Arkansas. But Verma decided to personally approve the Arkansas waiver on Monday and flew to Little Rock, Arkansas, to make the announcement with Republican Gov. Asa Hutchinson.

CMS officials did not respond to questions about why she did not recuse herself again.

But a top Senate Democrat lambasted Verma’s decision.

“She pledged during her confirmation to recuse herself from working on many states’ Medicaid waivers to avoid conflicts of interest, including Arkansas," Sen. Ron Wyden, D-Ore., said in a statement. “The Trump administration has simply made a mockery of the HHS ethics process.”

RELATED: Democratic lawmakers urge CMS to rethink endorsement of Medicaid work requirements

It is unclear why she deferred deciding on Arkansas request to scale back its Medicaid decision. Deferring a decision on rolling back expansion could be a way of rejecting the application but in a less politically harsh way. Arkansas was one of the few Southern states to expand Medicaid under the ACA, a decision that brought hundreds of millions of federal dollars into the state.

Nine other states have requests pending with CMS to enact a Medicaid work requirement.

In Arkansas, enrollees who don’t work or volunteer at least 80 hours a month could lose coverage as early as September. The work requirement exempts many people, such as those with opioid addiction and parents with dependent children.

Verma said the work requirement “is about helping people rise out of poverty to achieve the American dream.”

RELATED: New CMS guidance paves way for states to test Medicaid work requirements

But advocates for the poor blasted the move, noting most Medicaid enrollees already work, go to school or are taking care of sick relatives.

“The Trump administration’s approval of Arkansas’ harsh work requirement in Medicaid will likely set back the state’s considerable progress under the Affordable Care Act in increasing coverage and improving access to care, health and financial stability for low-income Arkansans,” said Judith Solomon, vice president for health policy at the left-leaning Center on Budget and Policy Priorities.

Arkansas officials said they need the work requirement because without it many enrollees won’t seek out work or job training. Since January 2017, fewer than 5% of Medicaid enrollees who were referred to the state Department of Workforce Services to help with job training followed through and accessed services.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation, which is not affiliated with Kaiser Permanente.

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