Lessons Learned from Arkansas’ Experience with a Medicaid Work Requirement 

With the return of Donald Trump to the White House, states are once again lining up with requests to implement work requirements for Medicaid enrollees. The requests come at the same time as Congress is considering a budget reconciliation bill that includes a mandate for all states to implement a work requirement for Medicaid expansion enrollees. Whether states adopt work requirements voluntarily or implement them pursuant to a federal requirement, they have the advantage of being able to learn from the problems encountered by Arkansas, the first state to implement a Medicaid work requirement.  

Program Overview 

In June 2018, Arkansas began phasing in a work and community engagement requirement for people enrolled in the state’s unique premium-assistance approach to Medicaid expansion, under which the state uses Medicaid funding to purchase health coverage for low-income individuals through the Health Insurance Marketplace. Then-Gov. Asa Hutchinson said the goal of the work requirement was to lift people out of poverty. 

With the new requirement, Medicaid expansion enrollees were required to spend at least 80 hours per month working or participating in activities such as job training or community service. The requirement applied only to people ages 30 to 49 initially and was expanded to include people ages 19 to 29 in January 2019.  People who were 50 or older, pregnant, caring for dependent children, enrolled full-time as students, or physically or mentally incapacitated were exempt from the requirement.  

By the end of 2018, more than 18,000 people had been disenrolled from Arkansas’ Medicaid expansion program for noncompliance with the work requirement. A 2019 study published in the New England Journal of Medicine found that the work requirement did not achieve the goal of promoting employment among low-income Arkansans, and the uninsured rate among 30-to-49-year-olds in the state increased from 10.5% in 2016 to 14.5% in 2018. 

In March 2019, a federal judge ruled that the work requirement did not promote the objectives of the Medicaid program, and the requirement was subsequently halted. The US Court of Appeals for the District of Columbia Circuit later upheld the ruling. In March 2021, the Biden administration withdrew approval of the waiver that had allowed Arkansas to implement the work requirement and asked the Supreme Court to dismiss the case as moot and vacate the lower-court rulings, which it did, thus opening the door for future administrations to approve work requirement requests. 

Communication Issues, Administrative Hurdles and Other Barriers 

A 2019 report by the Arkansas Center for Health Improvement (ACHI) identified numerous issues that contributed to Medicaid expansion enrollees’ noncompliance with the work requirement, including difficulties the state encountered in contacting the enrollees, enrollees’ confusion over what was required of them, and challenges that enrollees encountered in navigating the state’s online portal for reporting compliance. 

In interviews with ACHI, insurers offering health plans through the program reported that their outreach efforts were hindered by difficulty in obtaining quality demographic and contact information for enrollees, a population that frequently changes addresses. One insurer estimated that only 10% to 15% of the first-class mail sent to enrollees reached its intended targets. Literacy was also a challenge, with one insurer reporting that although it generally wrote its communications at an eighth-grade level, communications written at a fourth-grade level were more appropriate for this population. Insurers said some enrollees did not understand how to meet the work requirement, and some did not understand that it applied to them. Some enrollees in the program, then titled Arkansas Works, disregarded Medicaid-related communications because they were unaware that Arkansas Works was a Medicaid program. 

The Arkansas Department of Human Services identified certain community organizations as resources for enrollees needing assistance, but ACHI conducted interviews with 32 of the organizations and found that fewer than 10 reported having the capacity to assist enrollees with activities such as website navigation or exemption documentation. Twelve of the organizations reported having no knowledge or understanding of the work requirement. 

Initially, enrollees whose work or exemption status could not be verified by checking existing government data — such as payroll records or compliance with existing work requirements for the Supplemental Nutrition Assistance Program — were required to visit an online portal monthly to report their activities demonstrating compliance or justify an exemption. The online-only reporting rule was imposed despite limited internet literacy and access in Arkansas: In 2018, Arkansas was near the bottom among states in the percentage of its households with broadband internet. 

Users were advised to contact a call center for help, but originally the call center hours were limited relative to the portal hours. In August 2018, in response to reports that calls were not being answered in a timely manner, the state expanded the call center’s hours to align with the online portal’s hours. In December 2018, the state began allowing people to report their work and community engagement activities by phone. Also in that month, Arkansas officials announced they would launch a mass media campaign to reach the target population, a step they had not previously deemed necessary. 

Transportation and health issues were also cited as common barriers for complying with the work requirement. According to insurers interviewed by ACHI, some enrollees reported they had multiple chronic health conditions that made employment a challenge, yet they did not qualify for exemptions from the work requirement. 

Our experience suggests there are substantial administrative burdens and costs associated with successfully implementing a work requirement in a low-income population. States considering work requirements should consider, at a minimum, simplicity, clear and appropriate communication delivered across multiple channels, longer intervals of compliance assessment, multiple ways for enrollees to report their activities, compliance support, and mechanisms for identifying health and other hardships.

New State Proposals 

Regardless of Congressional action, at least 11 states are now considering introducing Medicaid work requirements. Arkansas, Ohio, and Arizona have released the details of proposed new work requirements, and Georgia is seeking permission to make changes to a work requirement it implemented as part of a limited form of Medicaid expansion launched in 2023. The proposals seek to avoid many of the missteps Arkansas made in 2018. 

According to Arkansas’ new proposal, “lessons learned include the importance of providing clear communication through multiple means, simplicity in design, and the need for personal interaction rather than overreliance on technology.”  

Monthly reporting would not be required under the programs in Arkansas, Ohio and Georgia. Arkansas and Ohio say they will use existing data from other government programs and databases to track compliance with the work requirement, eliminating the need for individuals to report their activities. Georgia is seeking to switch from a monthly reporting requirement to an annual one. 

The Arkansas, Ohio and Arizona proposals also say they will help people find work. Arkansas will seek to pair people who are not in compliance with “success coaches,” trained individuals who will provide information about available resources and job opportunities. People who remain noncompliant will not be disenrolled from the program, but their benefits will be suspended through the end of the calendar year. They can have their benefits restored if they inform the Department of Human Services of their willingness to cooperate. 

Ohio’s proposal says the state is developing procedures for providing more job training and employment opportunities to its Medicaid expansion population. Arizona’s proposal says its Medicaid agency will “establish and provide beneficiary supports and modifications to help ensure all members subject to the work requirement can effectively and meaningfully meet the requirement and stay eligible for Medicaid.” 

Federal Proposal 

The proposal in the federal budget reconciliation bill would require Medicaid expansion enrollees to work, perform community service, participate in a work program, or be enrolled in an educational program for a combined total of at least 80 hours per month. Enrollees who are under age 19, pregnant, or receiving postpartum medical assistance would be among those exempt from the requirement, and people experiencing short-term hardships such as health emergencies would be temporarily excused from complying. If a state is unable to determine that an enrollee is in compliance, the person would be given 30 days to show compliance or justify an exemption; an enrollee who failed to do so would be disenrolled. 

Apparently taking into account at least one lesson Arkansas learned — the need for multi-channel communication with enrollees — the proposal would require states to notify enrollees of the work requirement by regular mail, or email if an enrollee prefers, and by at least one other means, such as telephone or text message. The proposal also says that to the extent possible, states would be required to use available information, such as payroll data, to verify compliance without requiring enrollees to submit additional information. 

Legal Questions Remain 

States pursuing work requirements also have the advantage of being able to study US District Judge James Boasberg’s 2019 rulings that blocked Arkansas’ work requirement and one in Kentucky that never took effect. In his ruling in the Arkansas case, Boasberg said Health and Human Services Secretary Alex Azar’s decision to grant a waiver for the requirement 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.” 

Arkansas’ new proposal asserts that work requirements are consistent with the core objective of Medicaid, maintaining that they aim to reduce poverty and that “addressing poverty serves the purpose of the Medicaid program.” It’s a different tack, and it’s unclear whether courts would agree with this interpretation. In any event, Azar did not consider impacts on coverage in reaching his decision. As Boasberg noted, “To ‘adequately analyze’ the issue of coverage … the Secretary needed to consider whether the demonstration project would be likely to cause recipients to lose coverage and whether it would cause others to gain coverage. He did neither.” Of course, a Congressionally mandated work requirement would negate the need for state justification and Secretary consideration, averting judicial review altogether.  

Conclusions 

Work requirements are politically attractive, particularly in states with low median incomes where 138% of the federal poverty level can be perceived as reaching into the middle class. In many Arkansas counties, more than half of residents are eligible for Medicaid, resulting in social tensions between those eligible for free health insurance and those not eligible, potentially leading to greater political support for work requirements in these states than in wealthier states. 

Whether future work requirements are established at the state level or by federal mandate, state Medicaid programs will be responsible for working out many operational details. Health care providers, community-based organizations, and health advocates will need to make their voices heard during that process. Based on Arkansas’ experience, we have identified several elements that are essential to include in Medicaid work requirements: clear and simple communications, multiple communication channels, adequate time to assess compliance, compliance support, and a mechanism for identifying hardships. Whether a policy that includes those components would succeed in lifting people out of poverty remains to be seen, but history suggests that a policy that does not include them is doomed to fail.