By Sheldon Weisgrau | Jan. 2, 2020

Recently, Kentucky Governor Andy Beshear rescinded the requirement that Medicaid beneficiaries document their work hours with the state in order to receive health coverage. In so doing, Beshear joined a number of other governors and states that have rolled back work requirements and other burdensome Medicaid provisions. These requirements have proven costly to implement and confusing to beneficiaries and have resulted in thousands of people losing their health coverage.

Thirty-six states and DC have expanded their Medicaid programs. Most of these states have implemented simple expansions of program eligibility to 138% of the federal poverty level, as set out in federal law. A handful of states, however, elected to expand their programs through 1115 demonstration waivers, in which the states test new approaches to Medicaid that differ from what is required in the law.

Some states, for example, imposed work requirements as a condition of Medicaid eligibility. Some required low-income beneficiaries to pay premiums and other out-of-pocket costs. In some states, beneficiaries that cannot comply with these requirements may be locked out of the Medicaid program and lose their coverage for a period of time. States believed that these provisions would make beneficiaries more likely to work and become self-sufficient.

Experience has proven otherwise, however. In Arkansas, for example, thousands of beneficiaries lost their health coverage, with no changes in employment, according to a study conducted by researchers from Harvard.1 This analysis showed that nearly all of those subject to the work requirements policy were already working or should have received an exemption. Many had never heard about the requirement, however, were confused about the reporting process, or lacked internet access for reporting. The researchers concluded that regardless of whether they met the requirements, thousands of Arkansans lost coverage due to confusion and bureaucratic red tape.

A broader study that looked at the experiences of four expansion states with 1115 waivers was conducted by researchers from the University of Minnesota.2 This analysis found that waiver programs were far more administratively complex than traditional Medicaid and were difficult and expensive to implement and support. States had to redesign IT systems and devote extensive time and resources to ongoing coordination and monitoring efforts. Extensive beneficiary outreach, education, and communication was necessary and the complexity of the requirements required engaging beneficiaries multiple times and via multiple mechanisms. And even with these efforts, many beneficiaries remained in the dark about the requirements.

In addition, many of the states that have implemented expansion through 1115 waivers have faced legal challenges to their programs. Federal courts have set aside work requirements and other provisions in Arkansas, Kentucky, and New Hampshire because they are inconsistent with the statutory purpose of the Medicaid program. Imposing such requirements may expose a state to lengthy and costly litigation.

For these reasons, Gov. Beshear decided to reverse many of the requirements of Kentucky’s waiver and simplify the state’s expansion. Governors of Arizona, Indiana, Maine, Michigan, New Mexico, and Ohio have made similar decisions, holding off on imposing burdensome requirements on Medicaid beneficiaries and thus simplifying participation and reducing the state’s administrative costs.

Governor Kelly’s Council on Medicaid Expansion here in Kansas reached the same conclusions. At its final meeting last month, the Council strongly recommended a rapid and straightforward expansion of KanCare, the Kansas Medicaid program. The Council and governors from across the nation have learned that when it comes to Medicaid expansion, simpler is better.

Sheldon Weisgrau is the Alliance for a Healthy Kansas’ Senior Policy Advisor. Contact Sheldon at sheldon@expandkancare.com.

SOURCES
1. Benjamin D. Sommers, Anna L. Goldman, Robert J. Blendon, E. John Orav, and Arnold M. Epstein, “Medicaid Work Requirements: Results from the First Year in Arkansas,” New England Journal of Medicine, September 12, 2019.

2. Emily Zylla, Colin Planalp, Elizabeth Lukanen, and Lynn Blewett, “Section 1115 Medicaid Expansion Waivers:
Implementation Experiences,” prepared for the Medicaid and CHIP Payment Access Commission (MACPAC) by the University of Minnesota State Health Access Data Assistance Center, February 8, 2018.