This past June 2018, Arkansas became the first state in the nation to implement a federal Medicaid work demonstration – known as Arkansas Works — that terminates Medicaid coverage for beneficiaries unable to demonstrate through a complex online system that they are fulfilling stringent work/community engagement and reporting rules. Several newly-published blogs examine the early results of this demonstration. Together, they analyze how the Arkansas work experiment, which as yet has no evaluation component as required by law, might affect coverage, access to care, and the state’s broader economy.
In an analysis published by The Commonwealth Fund, Arkansas’ Early Experience with Work Requirements Signals Larger Losses to Come, our colleagues Erin Brantley and Leighton Ku in the Department of Health Policy and Management at the Milken Institute School of Public Health estimate that during the initial year of the Medicaid work demonstration, out of 160,000 adults subject to the requirements 30,700 to 48,300 beneficiaries would lose coverage as a result of not meeting work or reporting requirements. This equals 19 percent to 30 percent of Medicaid beneficiaries subject to the work requirements losing coverage over the course of twelve months.
Applying these estimates, a new analysis from the Geiger Gibson/ RCHN Community Health Foundation Research Collaborative examines the potential impact on the state’s twelve health centers, which served more than 210,000 people in 2017, or one in six low-income residents. As in other states, Arkansas health centers depend extensively on Medicaid revenue. Authors Peter Shin, Jessica Sharac and Sara Rosenbaum calculate that between 2,453 and 3,873 health center Medicaid patients could lose coverage in the first year of the demonstration. These anticipated coverage losses will result in a loss to the state’s community health centers of $1.5 to $2.3 million in Medicaid revenue and this revenue loss, in turn, equates to a drop in patient care capacity for between 1,811 and 2,859 patients and a reduction of 6,827 to 10,779 patient visits. The overall declines in Medicaid revenue can be expected to be felt across the community. This blog, “The Projected Effects of the Arkansas Medicaid Work Requirement Demonstration on Community Health Centers” is available on The GW Health Policy Matters site.
Also released by The Commonwealth Fund is How a Medicaid Work Requirement Could Affect Arkansas’ Economy, by Sherry A. Glied, Dean of the Robert F. Wagner Graduate School of Public Service at New York University. Dr. Glied explains that reductions in Medicaid enrollment translate into reductions in the flow of federal funding to a state, and estimates that while the work requirements will generate savings to the state of $8 to $13 per resident, per year, Arkansas will in exchange forgo federal funding equal to about 5 percent of its total state tax revenue collection — or between $71 and $112 per resident.
Arkansas’ work demonstration is the first such initiative to go into effect, and these early – and conservative – estimates suggest that the spillover effects of Medicaid work requirements in Arkansas could be both far-reaching and long term, reversing the gains achieved through Medicaid expansion, dramatically increasing the number of people who are uninsured, reducing access to care for entire communities and hurting the local and state economy. The magnitude of the consequences are a cautionary tale.