New fed guidance aligns with Arkansas Works waiver; DHS sees quick approval

The Trump administration’s Centers for Medicare and Medicaid Services has sent a guidance to state Medicaid directors that aligns with part of Arkansas’ request for a waiver for its Arkansas Works program.

Amy Webb, Arkansas Department of Human Services spokesman, said the department received the letter, dated Jan. 11, that morning. It is not an official approval but does offer guidance.

“We are pleased that the administration has put out this guidance saying it will give states more flexibility to do the kind of reforms we have planned in Arkansas,” she said. “We expect official approval of our waiver request soon and are prepared to implement the changes we’ve requested.”

Gov. Asa Hutchinson’s administration asked for the waiver from the Trump administration as part of its ongoing efforts to administer Arkansas Works, the program that uses federal Obamacare dollars to purchase private health insurance for lower-income Arkansans.

The letter, whose existence was reported by Fox News, says CMS will “support state efforts to test incentives that make participation in work or other community engagement a requirement for continued Medicaid eligibility.”

It acknowledges that the agency is shifting its stance from one under the Obama administration that did not require work or community engagement. It says applications will be reviewed on a case-by-case basis.

WHAT IT WOULD DO

The state’s waiver would require individuals ages 19-49 to work 20 hours a week or engage in other activities, such as on-the-job training, taking GED classes or participating in volunteer “workfare activities.” The requirements would be phased in over two years starting with beneficiaries ages 30-49 in 2018, followed by beneficiaries ages 19-29 in 2019.

Exempted include Arkansans age 50 or above, those who are “medically frail,” full-time students, and those who have a minor living at home. Those exemptions mirror the federal Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps, which also serves many Arkansas Works recipients.

The guidance from the Trump administration says states may align Medicaid participation requirements with those for participation in SNAP and the Temporary Assistance for Needy Families Program.

Arkansas Works currently serves 285,564 Arkansans, down from 344,289 at the beginning of 2017 as a result of efforts by DHS to reduce duplication and serve only those eligible, and as a result of the improving economy.

That number will fall further if the waiver is approved. The state wants to reduce the income threshold for Arkansas Works eligibility to 100% from 138% of the federal poverty level. That level is $12,060 for an individual and $24,600 for a family of four.

The guidance does not address that part of the waiver request.

Those individuals no longer eligible for Arkansas Works could obtain coverage through their employer or could purchase it on the insurance exchange, which also was created by the Affordable Care Act. They could keep the same plan they have under Arkansas Works and receive a government subsidy.

A BRIEF HISTORY

In 2017, beneficiaries with incomes between 100% and 138% of the federal poverty level were required to pay $13 on their premiums. Those that did not pay then owed a debt to the state, which the state cannot collect except through lottery winnings. Only 25% of recipients were making the payments. Insurance companies, however, can deny them coverage if they fail to pay. More than three-fourths of Arkansas Works beneficiaries had zero income last year.

Arkansas Works was created in 2013 after the U.S. Supreme Court ruled states had the option of expanding their Medicaid populations. Instead of doing that, Arkansas received a waiver from the Obama administration allowing it to purchase that insurance through the private markets.

Previously known as the private option, it has been funded almost entirely by the federal government until 2017, when the state began picking up 5% of the tab. That number grows over time to 10% by 2020.

The waivers were approved during a special session last May and helped ensure passage of the program, which has struggled to maintain support among skeptical conservatives. In the 2017 regular session, as in previous sessions, opponents of Arkansas Works tried to block it by refusing to vote for the appropriation for the Department of Human Services. All appropriations require a three-fourths vote in both the House and the Senate. The DHS appropriation failed twice in both chambers. It finally passed with the minimum 27 votes in the Senate, with seven not voting and Sen. Bryan King, R-Green Forest, voting no. The House passed it 77-13 with 9 not voting and 1 voting present.

The Hutchinson administration then requested the waiver from the federal Centers for Medicare and Medicaid Services with the expectation that it would go into effect Jan. 1. That deadline came and went amidst concerns in the Trump administration that Arkansas’ request could be copied by other states, shifting the cost to the federal government.

WHERE LEGISLATORS STAND NOW

The Legislature will meet in its even-numbered-year fiscal session starting Feb. 12, where the math could again prove difficult. Sen. Jim Hendren, R-Gravette, said last week that approval of the waiver would make it easier to pass the appropriation in the fiscal session because it would reduce the size of the program.

Sen. Bart Hester, R-Cave Springs, has usually voted against the expansion, though he voted for the appropriation in 2017 and says he will vote yes during the fiscal session.

Hester said the state is now in “management mode” regarding Arkansas Works – taking steps to reduce the rolls without suddenly ending the program. He said the political environment has changed. President Trump is trying to end Obamacare, and Congress recently voted to end the individual mandate to buy insurance, an important part of Obamacare. Arkansas could be the first state to roll back the Medicaid expansion, he said.

“It’s just a different universe than it was a year ago, two years ago, three years ago when we started having this argument,” he said. “The tide’s in our favor. Things are moving the direction the people of Arkansas expect them to move. To just shut down an agency’s budget over something that’s maybe not as far along as you want, but there’s no arguing it’s moving the direction you want, I just don’t think that’s the direction that the Republicans in the Senate are going to go.”

However, Sen. Gary Stubblefield, R-Branch, has remained firmly opposed. Reached on his farm where he was tying up a steer last week, he said, “I’m still a no. … I know that same group that voted no the last time, they’re going to be a no this time also. … I don’t really know what’s going to happen, but I can tell you that I have not changed my mind.”

Among others recorded as not voting, Sen. Terry Rice, R-Waldron, said last week that his position on the program had not changed, but he was “open to listen” to proposals. Sen. Ronald Caldwell, R-Wynne, said last week that he primarily had not voted for the appropriation because of his displeasure over a DHS juvenile detention centers contract, but he also had concerns about Medicaid expansion. He said he was not ready to commit to voting one way or the other. Sen. Alan Clark, R-Lonsdale, said last week that he is still opposed to Arkansas Works, but was considering voting for the budget.

“If I’m presented a binary choice again, it would be easy to say no,” he said. “If we’re actually trying to go in the right direction, it’s something I would have to look at.”