KY Medicaid Work Requirements May Cause Uninsurance If Reinstated

September 26, 2019 - If Kentucky, the first state to pass Medicaid work requirements, appeals to reinstate the rule, it may face the same confusion and rise in uninsurance that Arkansas experienced, researchers from the Commonwealth Fund warned.

“The survey found similar results in Arkansas, which implemented work requirements in 2018 and experienced higher uninsured rates, no increase in employment, and substantial confusion,” the study said.

The researchers asserted that the work requirement would not have fulfilled its ultimate goal— increasing the employment rate among Medicaid beneficiaries—because most Medicaid beneficiaries either met the work requirement or were exempt.

According to the survey, only three percent of Medicaid beneficiaries in Kentucky would not have met the work requirements and been required to obtain some type of employment.

The rest of the Medicaid population was working, had a disability, was a student or caregiver for a family member, performed community service, or spent at least 20 hours a week looking for employment or engaging in job training activities. The work requirement would not have applied to these individuals.

READ MORE: Federal Court Strikes KY 1115 Medicaid Waiver Work Requirements

Despite Kentucky’s marketing campaign, the general level of awareness regarding the proposed rule across the Medicaid population was low and stratified demographically.

Months after the work requirement proposal had been struck down, only eight percent of those surveyed knew that the rule was not in effect. Eighty percent were unsure whether it was in effect and 12 percent thought that it was.

When the researchers delved deeper into assessing knowledge of the proposal itself, it was clear that most did not understand the proposal.

Fifty-five percent of all low-income Kentuckians and 46 percent of Medicaid enrollees said they had no knowledge of the proposed requirement.

However, these statistics could be skewed based on whether or not the Medicaid enrollees qualified for the new proposal. Because not all Medicaid beneficiaries would have been impacted by the work requirements, they may not have taken the time to learn about them.

READ MORE: Study Links AR Medicaid Work Requirements to Coverage Losses

The researchers also noted that knowledge of the work requirements fell along racial and educational lines.

Under half of racial or ethnic minority Medicaid beneficiaries had heard about the proposed requirements. They were 18 percent less likely to know about it than white beneficiaries.

Medicaid beneficiaries with less than a high school diploma were 14 percent less likely to know about the requirements than beneficiaries with some college education.

Age was also a factor in whether or not beneficiaries knew about the proposed requirements.

Younger adults were less likely to know about the policy than older adults. Forty-one percent of Medicaid beneficiaries between the ages of 19 and 29 were aware of the proposal, while those between the ages of 30 and 64 were 58 percent likely to be aware.

READ MORE: KY Proposes Medicaid Coverage for School-Based Care Access

Marriage, gender, and geography did not appear to affect beneficiaries’ awareness.

The Kentucky community engagement requirement, also known as a work requirement, passed around the same time that Arkansas’s work requirement passed. Kentucky’s, however, was never enacted.

District Judge James Boasberg struck down the Medicaid expansion two days before the program should have started in June. That was the same month that the doomed Arkansas work requirement started, June 2018.

Ten months later, Judge Boasberg also struck down Arkansas’s work requirement, and later in 2019 New Hampshire’s Section 1115 Medicaid demonstration waiver for work requirements as well.

Kentucky’s legislature received CMS approval for the work requirement again in November 2018, which had garnered 8,500 comments in opposition and 374 in favor of the work requirement during its second public comment period. But Judge Boasberg blocked it again in March 2019.

Research on Arkansas’s Medicaid work requirements revealed a sharp drop in health insurance and no significant employment increase during the first six months of the work requirement. The researchers assert that lack of internet access and general confusion about the reporting process were the primary reasons that individuals failed to report their work hours, leading to coverage loss.

As a result, Arkansas has become the poster child state for opponents of Medicaid work requirements. Because both states pursued work requirements at the same time but went separate directions, Arkansas creates a foil for Kentucky from which the researchers drew predictions about what might happen if Kentucky decides to appeal the judge’s ruling.

One key difference between the two, which may affect the ability to draw conclusions from Arkansas’s experience, was that the survey in Kentucky occurred six months after the judge struck down the state’s work requirement. The policy was still in place when Commonwealth Fund surveyed in Arkansas.

Kentuckians may be less likely to know about a six-month dead policy than Arkansans would know about a presently active requirement.

However, there were similarities between Kentucky’s situation and Arkansas’s when it instituted the work requirements.

Like Kentucky, Arkansas’s Medicaid population largely met the state’s policy. Only five percent of Arkansans were non-compliant.

Significantly, despite the fact that most of the population met the work requirements, 17,000 Arkansans lost coverage between June and December 2018 and were blocked from re-enrollment for nine months. Among 30- to 49-year-olds, the uninsurance rate spiked by 4 percent.

“Arkansas implemented work requirements in 2018, and our survey showed similar patterns as in Kentucky — significant confusion, lack of awareness about the policy, and most adults already satisfying the proposed requirements,” the study warned. “Further, the first six months of the policy were associated with a significant loss in coverage, eroding some of the improvements documented under the state’s Medicaid expansion, but no employment gains.”

The researchers recommended that state leaders should ensure that awareness regarding the work requirements is widespread, particularly among minorities and those with lower education.