Governor: Kentucky work ruling doesn’t affect Arkansas Works

Arkansas is continuing to implement work requirements for Arkansas Works beneficiaries while similar requirements were struck down by a federal judge in Kentucky.

Gov. Asa Hutchinson said in an interview Tuesday (July 3) that he had read the court ruling, and that he is “optimistic that the decision in Kentucky will not impact us in what we’re doing in Arkansas and that ours will be upheld if it is challenged.”

Some Arkansas Works recipients are now required to work 80 hours a month or engage in other activities such as job training, job searching, education or volunteering, or a combination of those. Hutchinson said Arkansas does not fall under that court’s jurisdiction. He said Arkansas’ work requirement, unlike Kentucky’s, is already being implemented, so the state would have a factual basis to defend the program if it is challenged.

“If it is ultimately reviewed by the Supreme Court or another court that impacts us, then we will deal with it at that time,” he said.

Kentucky’s HEALTH program requires members of its Medicaid expansion population to work or participate in other qualifying activities at least 80 hours per month in order to continue receiving coverage. It became the first state to receive a work requirement waiver from the Trump administration on Jan. 12. Fifteen affected residents sued.

On June 29, U.S. District Judge James Boasberg ruled the HEALTH program would not “help the state furnish medical assistance to its citizens, a central objective of Medicaid.” He wrote that Health and Human Services Secretary Alex Azar’s granting of Kentucky’s waiver was “arbitrary and capricious.”

Boasberg wrote that Medicaid has never had a work or community engagement requirement since its creation in 1965. He wrote that the Trump administration had made it clear it hoped to repeal the Affordable Care Act and in the meantime minimize its impact.

In Kentucky, more than 428,000 residents are covered, according to Boasberg’s ruling. Kentucky intended to reduce its Medicaid population by 95,000 people and save $331 million by implementing the changes. Legally, Boasberg’s ruling applies only to Kentucky’s program, not to the other states that have received waivers allowing work requirements: Arkansas, New Hampshire and Indiana.

Arkansas Department of Human Services’ attorneys are “reviewing the ruling and monitoring the case. However, there’s no immediate effect on Arkansas’ work requirement,” said DHS spokesperson Marci Manley.

Dr. Joe Thompson, president and CEO of the Arkansas Center for Health Improvement, a policy research and advocacy organization, said the judge’s ruling emphasized that providing medical coverage is Medicaid’s primary goal, but the judge didn’t say that work requirements aren’t allowable.

“Obviously if the judge found fault with Secretary Azar’s team’s review of the Kentucky waiver, then he could find fault with the Arkansas waiver. … I think the important thing here is that those states that put this in place, we have a strong evaluation to make sure that medical coverage remains the primary goal and that upward mobility is an achieved secondary goal. … Nobody’s bulletproof when you go into court,” he said.

Affected beneficiaries in Arkansas began reporting their activities as part of the waiver on June 1. Individuals must report their activities for June by July 5 at www.access.arkansas.gov.

Arkansas is phasing in its work requirement, beginning with recipients ages 30-49 this year. Next year, recipients ages 19-30 will be required to work or engage in work- or community-related activities. The waiver will affect 39,918 beneficiaries this year, DHS said in March. The state had 99,632 recipients ages 30-49, but 59,714 qualified for an exemption. Exempted beneficiaries include those who are medically frail, those who are pregnant, those who face a short-term incapacitation or are caring for an incapacitated person, and others.

Originally known as the private option, Arkansas Works was created in 2013 after the Supreme Court ruled that states had the option of expanding their Medicaid populations under the Affordable Care Act, otherwise known as Obamacare. Arkansas and Kentucky both chose to participate. However, instead of expanding traditional Medicaid, Arkansas used that money to purchase private insurance under a program created by a Republican-led Legislature and Gov. Mike Beebe, a Democrat.

At the beginning of June, 274,810 people were enrolled in Arkansas Works, which will provide more than $1.9 billion in federal dollars to the state this fiscal year. The state will contribute almost $104 million to the program under a 94-6% federal match. Next year, the state must contribute 7%. Starting in 2020, the state must contribute 10%.

The program has often barely attained the 75% legislative majority needed each year for funding. Gov. Asa Hutchinson, who opposed the Affordable Care Act, has embraced the state program, changing its name to Arkansas Works. He worked with the Obama administration to implement a work referral and then was granted a work requirement waiver by the Trump administration.

Seema Verna, administrator of the federal Centers for Medicare and Medicaid Services, signed the waiver and then gave it to Gov. Asa Hutchinson during a press conference at the Capitol March 5.