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Work requirements, coverage expansion will define Medicaid policy in 2019

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Work requirements, coverage expansion will define Medicaid policy in 2019

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Signs supporting Nebraska's effort to expand Medicaid are displayed outside of a hearing on the initiative held in in Lincoln, Neb., in October 2018.

Source: The Associated Press

Medicaid, the U.S. health insurance program for low-income Americans, will remain in the spotlight in 2019 as some states seek to expand coverage and others impose limits, experts said.

The number of states that have expanded coverage under the program, which is jointly funded by state and federal governments, rose to 36 after Idaho, Nebraska, Virginia and Utah passed expansion plans in 2018.

That is good news for hospitals and healthcare providers who have benefited from the expansions as more patients seek treatment after gaining coverage. Between 2013 and 2017, uncompensated care costs for hospitals in expansion states fell by 1.7% more than hospitals in nonexpansion states, according to a 2017 report from the Center on Budget and Policy Priorities, a nonpartisan policy and research institute. The report also found that Medicaid revenue as a portion of total revenue increased by 2.9% more for hospitals in expansion states versus hospitals that were not.

However, providers stand to lose revenue in states that are imposing controversial work requirements, which place a minimum number of hours of work recipients must complete in order to receive coverage. Because the penalty for not meeting the requirements includes losing Medicaid coverage, hospitals could find themselves providing more uncompensated care.

Adam Searing, an associate professor at Georgetown University's Center for Children and Families, said Medicaid expansion and work requirements will "absolutely" remain the two top Medicaid issues in 2019.

"There will be more discussion of expansion, especially after Virginia's early success in enrolling people, and the debate over administrative barriers like work requirements and lockouts will continue," Searing said.

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Spotlight remains on Arkansas

More states are set to implement work requirements in 2019, but Searing said Arkansas will continue to draw headlines because of the sheer number of people losing Medicaid eligibility there. Nearly 17,000 Arkansans lost coverage in 2018, a total that may still increase when the Arkansas Department of Human Services releases data for December. Arkansas requires Medicaid recipients to work for 80 hours a month. If someone does not meet the requirements for three months in a year, they lose eligibility until the following calendar year.

In 2019, the policy will be extended from just 30- to 49-year-olds to include 19- to 29-year-olds.

Bo Ryall, president and CEO of the Arkansas Hospital Association, said the policy is leading to hospitals providing a larger percentage of uncompensated care. Without complete data, though, Ryall said the full impact will not be known for several more months. He expects hospitals will have an even larger burden in 2019 as more people are required to follow the state's policy, along with the fact that people could face as much as nine months without coverage.

Ryall said work requirements place unnecessary hurdles in front of Medicaid recipients, but he also acknowledged that the new policy was a condition of the state legislature's continued funding of expansion. The costs of expansion are at least 90% covered by the federal government.

The legislature's mandate put the Arkansas Hospital Association in a "tough position," Ryall said. The organization does not want to see the requirements enforced, but expansion provides coverage to about 250,000 people in the state.

Medicaid recipients who lost coverage in Arkansas during 2018 are eligible to reapply in January. But both Searing and Ryall are concerned that some people may not do so after being kicked off of Medicaid.

Arkansas' work requirements are subject to a lawsuit that argues the program is hurting Medicaid recipients rather than helping them as state officials have claimed. The same judge handling that matter blocked Kentucky's program from taking effect in July 2018. Legal experts are expecting a ruling on the Arkansas program in early 2019.

New work requirement programs begin

As two more states — Indiana and New Hampshire — prepare to add work requirements in January, officials are looking to avoid some of the mistakes made by Arkansas.

Indiana's Family and Social Services Administration, or FSSA, paid close attention to the rollout of Arkansas' requirements, according to spokesman James Gavin. The state has therefore placed communicating the change in policy as a top priority after the Arkansas program was criticized for not properly informing Medicaid recipients.

"We're making every effort to help prevent [the loss of Medicaid coverage] from happening, particularly any situations where there is a gap in awareness," said Gavin, the FSSA's director of communications and media.

Gavin said the FSSA began targeted outreach efforts in May 2018. As many as 85,000 people, or 22% of Indiana's Medicaid population, could be subject to the work requirements, according to the state agency's June 2018 estimates.

New Hampshire, on the other hand, plans to impose some of the toughest work requirements yet.

New Hampshire residents will need to work or participate in community engagement activities like school or volunteering for 100 hours per month. The state's program also suspends Medicaid eligibility after one month of noncompliance, while Arkansas allows for three months of noncompliance before suspending eligibility.

Medicaid recipients in New Hampshire and Indiana will not see any impacts for several months. Kentucky may also add work requirements in 2019 should the ongoing litigation resolve after CMS reapproved the state's waiver request in November 2018. Pending any further lawsuits, the program could begin as early as April.

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Expansion begins in Maine, Virginia

The newly minted governor of Maine, Janet Mills, ensured the Medicaid discussions in 2019 began early when, as one of her first acts, she fulfilled a campaign promise on Jan. 3 by enacting the state’s long-delayed expansion plan. But Mills, a Democrat, will also face a newly approved work requirements waiver that CMS signed in the closing days of 2018.

On Jan. 1, Virginia's expansion plan also went into effect, with nearly 200,000 people gaining government healthcare coverage.

Searing said the success in Virginia could provide a boost for expansion supporters elsewhere. Virginia could also ease the opposition in Republican-controlled states like Idaho, Nebraska and Utah that are looking to enact newly passed expansion ballot initiatives. Similar to the concession made in Arkansas, Virginia state representatives expanded Medicaid but also agreed to enforce work requirements. Virginia's work requirement waiver is pending with CMS.

States like Kansas, Wisconsin and North Carolina — all of which have pro-expansion governors — are most likely to expand Medicaid in the coming years, according to Searing.