In a saner world, Medicaid expansion wouldn’t be under threat • Arkansas Advocate

Arkansas is one of nine states with a trigger law that would automatically end Medicaid expansion if the federal match rate for the program drops below a certain level. Should congressional Republicans cut federal funding even by a small amount — as congressional leaders have proposed — Arkansas’s program will evaporate, leaving countless people with no insurance options. Those people would likely forego regular doctor visits, prescription refills, and preventative care such as cancer screenings. And more Arkansans would turn to emergency rooms for primary care, racking up unpayable medical bills and hastening the decline of rural hospitals.

A backdoor to slash Medicaid?

First, let’s review some basics. Medicaid is a giant, sprawling patchwork that provides coverage to many different groups — disabled people, pregnant women, children, elderly people in nursing homes, etc., all of which have different income eligibility thresholds. Obamacare, also known as the Affordable Care Act, “expanded” Medicaid to create another coverage category — working-age adults who earn less than a certain percentage of the federal poverty level. (The annual income threshold is 138% of the poverty line, which works out to about $43,000 for a family of four or $21,000 for a single person.)

But not every state opted to expand Medicaid as envisioned under Obamacare. That’s because Medicaid is a joint state-federal operation. The federal government sets broad rules, but states have a good deal of latitude to run their own programs how they see fit. Blue states generally embraced Medicaid expansion in the 2010s, but many red states refused to do so.

In Arkansas, the uninsured rate has been almost cut in half since Medicaid expansion started in 2014. The program has been called many things over the last decade — the “private option,” “Arkansas Works” and now “ARHOME” — but it’s provided health care access to hundreds of thousands of people. ARHOME covered about 224,000 beneficiaries as of Nov. 1, according to the most recent report from the state Department of Human Services.

When the Arkansas Legislature authorized Medicaid expansion back in 2013, lawmakers were suspicious the federal government might one day backtrack on paying such a large share of the costs. So, they wrote a provision into the Medicaid expansion legislation that the program would be wound down within four months if the match rate is ever lowered below 90%. The same language is in the current version of the law.

This matters in part because Arkansas conservatives have always wanted to undo Medicaid expansion. The state embraced the program at a moment when Republicans were on the rise in state government but Democrats were not yet powerless; the original bill passed in 2013 thanks to the bipartisan work of then-Gov. Mike Beebe and a group of moderate Republican legislators.

Since then, conservatives such as state Sen. Bart Hester — now the Senate president pro tempore — have repeatedly tried to kill the program. They’ve failed. The prospect of cutting insurance for so many people proved too politically dicey, especially considering hospitals and other big health care interests want Medicaid expansion to stay put. Though there’s little chance the Republican legislative majority would approve expansion today if the program were presented to them fresh, they’re afraid to yank away an existing benefit from hundreds of thousands of people.

But the trigger law could give Arkansas conservatives a workaround: If Republicans in Congress cut funding for Medicaid expansion at the federal level, DHS would be required to end the program and state legislators could pretend their hands are clean.

That wouldn’t actually be true, of course, because the state Legislature could and should revise state law to remove the trigger. If they sit idly by while Medicaid expansion is undone, state lawmakers will bear just as much responsibility as Congress. Still, it’s easier for a politician to sit back and do nothing than to affirmatively cast a vote to end a program.

Whether Republicans in Congress can really make such dramatic cuts is a different story. The last time Trump was in the White House, the GOP’s efforts to repeal Obamacare famously went up in flames. Since then, the Republican Party has in some respects only grown more populist, at least rhetorically. While Elon Musk and others are vowing to slash literal trillions of dollars from the federal budget — a goal that would require enormous cuts in entitlement programs like Medicaid — Trump hasn’t so far proven to be one for disciplined policy choices or fiscal austerity.

The return of work requirements

The more likely route may be for Republicans to just make Medicaid stingier, harder to access, and less useful for the people it serves.

State-level work requirements will almost certainly return in the second Trump administration. One Arkansas Republican on the House Public Health Committee, state Rep. Aaron Pilkington, recently told Stateline a work requirement is “100% on the table and something we’ll look to ask for from the Trump administration.”

That’s despite the state’s own admission last year to the Biden administration that Arkansas’s work requirement experiment back in 2018 was hardly a success. “While the intent was to encourage beneficiaries to engage in their communities and the workforce to achieve economic growth and eventual independence from government dependency, the monthly reporting of engagement hours was burdensome,” DHS officials wrote in a document sent to federal Medicaid authorities in June 2023.

Research has shown most Medicaid expansion recipients do indeed work, regardless of the state’s rules — after all, ARHOME provides health insurance, not a paycheck, and people must still make rent and pay bills. Instead of pushing indolent people into the workforce, Arkansas’s 2018 work requirement mostly created new red tape and meaningless bureaucratic hoops to jump through. Beneficiaries had to log their work hours using a glitchy, confusing web portal, creating problems for those with limited internet access or computer skills.

Many of the roughly 18,000 Arkansans who were kicked off their insurance in 2018 were in fact working but were unaware of the new work rule. The state, led at the time by Gov. Hutchinson, thus punished people not for failing to hold down a job but for failing to log on to a DHS website and plug numbers into a form. (For a more detailed account, read our coverage of the Arkansas experiment from 2018.)

But work requirements remain alluring for Republicans. Perhaps that’s less because they’re effective at pushing people to work and more because they simply keep people away from public benefits they should qualify for, thus saving states money.

It is true that Medicaid is enormously expensive. The total cost of the program in Arkansas in 2023 was $8.6 billion, of which the state paid more than $2 billion. (That includes coverage for about 415,000 children on ARKids and 224,000 adults on traditional Medicaid, along with the 224,000 in ARHOME, the expansion program.) If Gov. Sarah Sanders and fellow Republicans want to keep cutting income taxes for corporations and higher-income Arkansans, the cost of Medicaid must be held down.

But that also comes with costs: More uninsured people mean more bad debt for rural hospitals, many of which are already financially shaky. Hospitals are required under federal law to treat people who need emergency services, and if more of those patients are unable to pay their bills, hospitals will be forced to absorb the cost. Some will likely close. Arkansans will lose access to basic health services, forgo necessary treatment until it becomes an emergency, and be bankrupted by medical debt.

Gavin Lesnick, a spokesman for Arkansas DHS, said the agency hasn’t been in contact recently with federal authorities about the possibility of adding a work requirement. But DHS is “always working on ways to make Medicaid more efficient and effective,” he said.

“This focus includes creating meaningful ways for beneficiaries to move from depending on government health insurance coverage to gaining economic independence,” Lesnick wrote in an email. “We look forward to continuing these conversations both within our agency and with the Governor’s Office, the Legislature, and other key partners.”

As shown by the recent outpouring of schadenfreude over the killing of a UnitedHealthcare CEO in Manhattan, Americans are fed up with the country’s dysfunctional health care system. Ironically, the coverage provided through Arkansas Medicaid expansion is better than much of what’s now available through private, employer-sponsored insurance: It comes with no deductible, the state pays the premiums, and beneficiaries pay reasonable co-pays on a sliding scale based on household income. In a saner country, the people in charge would be working furiously to extend that sort of coverage to more citizens. But in America, and especially in states like Arkansas, they’re instead looking for ways to roll it back.