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Donald Trump approves Medicaid work requirements in Arkansas

March 5, 2018 GMT

The Trump administration on Monday said Arkansas can impose work requirements on thousands of people who got covered under its expansion of Medicaid, making it the third state to condition benefits on finding a job, volunteering or going to school.

Gov. Asa Hutchinson and members of his Cabinet beamed as Seema Verma, administrator of the Centers for Medicare and Medicaid Services, signed their waiver proposal in Little Rock, saying it will lift able-bodied people out of poverty.

“I have often said that Arkansans understand the dignity of work,” Mr. Hutchinson, a Republican, said. “The approval of this work requirement will go a long way to create opportunities for able-bodied working-age Arkansans to enter into training or employment and ultimately climb the economic ladder.”

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However, the Trump administration punted on a second component of Arkansas’ proposal.

Mr. Hutchinson wants to cap enrollment in the Medicaid expansion at 100 percent of the federal poverty level, even though Obamacare called for expanding to those earning up to 138 percent.

An estimated 60,000 people would lose coverage if CMS blesses a “partial expansion,” and it would set a big precedent for other red states looking to pare back their own rolls, while preserving an influx of federal dollars for a limited expansion.

CMS said it wanted to forge ahead with the work portion of the waiver while it wrestles with the thorny request.

Though Mr. Obama frowned upon work requirements under Medicaid, but Mr. Trump has thrown the door open to them.

CMS already told Kentucky and Indiana they can impose work requirements on able-bodied enrollees, although Arkansas’ program does not affect people in the traditional Medicaid program.

Ms. Verma said eight more states have submitted proposals, and nine more have expressed interest.

Arkansas’ requirements apply to people aged 19 to 49. Affected enrollees must report they’ve performed 80 hours of work or community engagement per month.

Those who fail to comply for three months will lose coverage for the rest of the calendar year.

State officials said they’ll set up web-reporting services this month and notify affected person in early April. The first batch of enrollees should begin reporting their work hours in June.

“That shows you how rapidly we are prepared to move,” said Cindy Gillespie, director of the Arkansas Department of Human Services.

While 18 have refused to expand Medicaid under Obamacare, saying it would bust their budgets, states like Arkansas found creative ways to make expansion more palatable for state Republicans.

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Instead of bloating its traditional program, Arkansas used the federal expansion money to place 285,000 residents in private coverage.

Mr. Hutchinson’s push to cap the Medicaid expansion at the federal poverty level would put another major spin on Mr. Obama’s initial plan.

Under the Affordable Care Act, those who fall into the 100-to-138 percent of poverty range can qualify for federal subsidies on Obamacare’s exchanges, although only if they’re ineligible for Medicaid.

States struggling to balance their budgets have an incentive to get residents into exchange plans that are subsidized by federal taxpayers alone, rather than picking up a portion of the tab under the Medicaid expansion.

Dumping previously Medicaid-eligible people into the exchanges could have an adverse effect on those states’ exchange markets, however.

Research has shown that non-expansion states have slightly higher premiums in their exchange markets. Analysts say one reason for the disparity is that the share of the population earning 100 to 138 percent of poverty may be sicker than the rest of the individual market population, so their presence in the exchanges drives up rates.