Governor urges appeal on Arkansas Works ruling; House to vote on funding Friday

Gov. Asa Hutchinson is urging the Trump administration to pursue an expedited appeal of a U.S. district judge’s decision nullifying the Arkansas Works work requirement, while the Speaker of the House expects that body to vote in favor of funding the agency that administers the program on Friday (March 29).

The news came at a press conference Wednesday (March 28) led by Hutchinson along with Speaker Matthew Shepherd, R-El Dorado, and Senate President Pro Tempore Jim Hendren, R-Sulphur Springs.

Hutchinson told reporters he had spoken moments earlier with Department of Health and Human Services Deputy Secretary Eric Hargan and others. He said he is asking HHS Secretary Alex Azar along with the Department of Justice to seek an expedited appeal.

Hutchinson said that as a result of the judge’s decision, “The online portal has been shut down, and no one will lose coverage from this point forward as a result of any … failure to report.” Also gone will be a provision in the state’s waiver moving retroactive coverage for new enrollees to 30 days prior to enrollment. The date will move back to the original 90 days. He said the Trump administration remained committed to the work requirement.

“I expect this to move quickly,” he said. “I was very encouraged by it, and that they want to take an aggressive approach on it.”

He said Arkansas cannot appeal because it is an intervenor in the case and does not have standing.

In Charles Gresham, et al. v. Alex M. Azar II, et al., Judge James Boasberg ruled Wednesday that Azar’s decision to grant Arkansas the work requirement waiver was “arbitrary and capricious because it did not address – despite receiving substantial comments on the matter – whether and how the project would implicate the ‘core’ objective of Medicaid: the provision of medical coverage to the needy.”

He ruled in the Arkansas case and in a separate Kentucky case that the work requirement could not stand. He relied on an earlier ruling against Kentucky’s work requirement he had made in June 2018.

Hutchinson said the judge did not strike down the work requirement based on its reporting requirements. Rather, “He had a fundamental disagreement with the work requirement in and of itself. His view is that Medicaid is an entitlement program, and you cannot place additional requirements that may lead to a loss of coverage.” He said the judge recognized that his own ruling could be a “pause.”

Hutchinson said he remains committed to Arkansas Works and the work requirement.

“I believe there should be consequences when people do not exercise responsibility,” he said. “And this is a benefit that we have expectations about, and if you don’t have some consequence, then it makes it much more difficult.”

Wednesday’s ruling came shortly after the Arkansas Senate approved funding for the Department of Human Services Division of Medicaid Services, the agency that administers Medicaid. All state appropriations require a 75% vote. Opponents in the past have tried to block Arkansas Works by denying funding to the division.

Speaker Shepherd said he expects the Division of Medical Services budget to be debated and put to a House vote Friday. He said had “not heard the type of pushback that would lead me to believe that it is in jeopardy.”

“We heard testimony in Joint Budget the other day that the appropriation was sufficient with or without the work requirement, and so at this point I think we will proceed forward in the House, and I’m still very optimistic that we’ll be able to chin the bar and be able to get the votes that we need to pass that appropriation and move forward to wrapping up the session in the next couple of weeks,” Shepherd said.

Hutchinson said he remains committed to the Arkansas Works program and said the House should pass the appropriation.

“If we want to continue to fight for a work requirement, the best course is to appeal, to seek the expedited appeal, and if we take Arkansas Works out of the DHS appropriation, then we’re in essence giving up on the fight and saying we no longer need a work requirement, we no longer want to fight for that, and it will moot out any appeal,” he said.

Hendren said strong support for the work requirement remains in the Senate.

Originally known as the “private option,” Arkansas Works was created by legislators and Gov. Mike Beebe’s administration in 2013. It was created after the U.S. Supreme Court ruled states could choose whether or not to expand their Medicaid populations under the Affordable Care Act, otherwise known as Obamacare.

Many Republican-leaning states chose not to expand their populations. Arkansas did, but instead of simply expanding Medicaid, it used mostly federal funds to purchase private health insurance for those lower-income individuals. A total of 235,962 individuals were enrolled March 1.

After Hutchinson was elected, he embraced the program, helping it each year attain the 75% support required in both the Arkansas House and Senate for funding. To help secure that support among skeptical lawmakers, the state requested and was granted a federal waiver from the Trump administration allowing it to require non-exempt recipients to work 80 hours per month or engage in other community engagement activities. Recipients who failed to comply with the requirement three months in a calendar year faced losing their coverage.

In 2018, 18,164 enrollees lost coverage for failing to meet the requirement. Of those, 1,452 of those recipients gained coverage in 2019, including 1,441 of them in Arkansas Works. More than 13,000 recipients of the state’s Arkansas Works program did not meet its work requirement in February. A total of 6,472 have not met it for two months this year and faced losing their coverage if they did not comply in March.

Hutchinson said Arkansas was the first state to implement a work requirement waiver. He said that giving up on the program would mean giving up the opportunity to lead nationally.

He characterized the judge’s ruling as an “obstacle.”

“It is important to emphasize today that I remain fully committed to a work requirement, and we are in this for the long haul because we believe it is the right policy for Arkansans who want to work and need more training and more opportunity,” he said.

Hutchinson said that since the requirement went into effect last June, more than 12,000 Arkansans have been referred to the Department of Workforce Services and have found employment.

He said when the program was created in 2013, an estimated 250,000 were expected to be covered. Instead, the number reached 330,000 but has since fallen to 235,000. He said that meant 95,000 have moved off Arkansas Works but only 18,000 had lost coverage because they had not complied with the requirement, and of those less than 2,000 had re-enrolled this year.

Of those subject to the requirement, 88% have been in compliance, he said.

Hutchinson pointed out that the first Arkansas Works waiver provided by the Obama administration remains in place. It set a requirement for the state Department of Human Services to refer all able-bodied recipients to the Department of Workforce Services. He expects greater compliance with the work referral than there was in the past “because of the education we’ve gone through.”