Senior Policy Analyst
Arizona is suspending its plan to take Medicaid coverage away from people who don’t meet work requirements, adding to the growing list of states making similar decisions. Other states with approved or pending work requirement waivers also should reconsider these harmful policies.
In notifying the Centers for Medicare and Medicaid Services (CMS) of its decision to suspend its policy “until further notice,” Arizona cited court challenges in other states and “the evolving national landscape” for work requirement policies. The state is right to acknowledge this changing landscape. Since Arizona and most other states with approved or pending work requirement waivers adopted these policies:
Evidence from Arkansas and New Hampshire shows that work requirements lead to large coverage losses. In Arkansas, the first state to implement a requirement, over 18,000 beneficiaries lost Medicaid over the first seven months — nearly a quarter of those subject to the requirement. In New Hampshire, the only other state that has reached the point of taking coverage away from beneficiaries not meeting work requirements, almost 17,000 people — or about 40 percent of those subject to the requirement — were set to lose their coverage before state policymakers acted on a bipartisan basis to pause the policy.
In both states, the number of people losing (or potentially losing) coverage exceeded estimates of the presumed target population: people who are neither working nor qualify for an exemption. That indicates that working people and people who should be exempt are almost certainly losing coverage. And New Hampshire’s experience was similar to Arkansas’ despite its determination to conduct better outreach. Its multiple outreach activities, such as mail notifications, town halls, phone calls, and text messages, were expensive but didn’t prevent beneficiary confusion or struggles among people with serious health needs to obtain exemptions.
Even before Arizona’s decision to suspend its work requirement, the state appeared to be experiencing the same problems as Arkansas and New Hampshire. Earlier this year, Arizona changed its work requirement implementation schedule and approach, proposing to phase in the requirement geographically, starting with urban counties in the summer of 2020 before moving to more rural counties in 2023. Arizona acknowledged that it needed time to implement the policy in “regions with limited employment, educational and training opportunities, accessible transportation and child-care services.”
Other states are also reconsidering implementation of work requirements:
Policymakers in Arizona, Maine, Michigan, New Hampshire, and Virginia are right to raise concerns regarding Medicaid work requirements and their harmful and unintended consequences. The evidence from Arkansas and New Hampshire, coupled with new litigation developments, should be a warning to the other states with approved (Indiana, Kentucky, Ohio, Utah, and Wisconsin) or pending waivers that policymakers can’t fix this policy and, instead, should rescind it.