Arkansas, which received Trump Administration approval for a demonstration project (or “section 1115 waiver”) to take Medicaid coverage away from people who don’t work or engage in work activities for a set number of hours each month, will begin implementing the new rules on June 1. The Administration has also approved work requirement proposals from Indiana, Kentucky, and New Hampshire and proposals from Kentucky and Indiana to end coverage for those who don’t pay premiums or renew their eligibility on time. Enrollees, including many who are working or should be exempt from the new requirements, will likely end up losing coverage due to red tape and complexity, as our new paper explains.
The experience of several states that the Obama Administration allowed to test premiums and complex incentives to adopt healthy behaviors highlights the challenge of informing enrollees of what they need to do to protect their coverage. (Those waivers, however, don’t take coverage away from people who don’t adopt the healthy behaviors.) In Iowa, Michigan, and Indiana, many enrollees didn’t fully understand the new rules, state evaluations found.
Despite the findings, Indiana plans to implement a work requirement starting next year, and Michigan lawmakers are close to adopting a requirement. The risks that enrollees will not understand the rules are much greater in states with work requirements and lock-outs — with people losing coverage, not just the opportunity to reduce their out-of-pocket costs.
In states pursuing work requirements, many enrollees are at risk of losing coverage because the new policies are complex and hard for states to explain. Kentucky, for example, will have to provide notices that include a long list of details about the new work requirement — including when it takes effect, how to claim an exemption, how to satisfy the requirement, how to document hours, what triggers a coverage suspension and the impact of suspension on annual renewal, how to apply for an exception for good cause, how to regain coverage after a suspension, and how to appeal. The state will have to provide similar information about premiums and new lock-outs of coverage for not renewing coverage or reporting changes on time.
So far in Arkansas and Kentucky, the state is apparently relying mainly on written notices to explain the new rules. Given the state experiences cited above, plus the new rules’ complexity — especially in Kentucky, which is simultaneously implementing a work requirement, premiums, and lock-outs for not renewing coverage or reporting changes on time — the new rules will likely keep some eligible people from staying covered simply because they don’t understand them.