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Special Report: Starting in Arkansas, Trump-era Medicaid rules alter healthcare landscape

Reuters  |  EARLE, Arkansas 

By Yasmeen Abutaleb

EARLE, (Reuters) - left his last stable job at a meatpacking factory to fight a eight years ago. When he returned to the workforce a year later, his options were limited: mostly temporary jobs without benefits.

Since 2014, he's relied on medical coverage offered under Arkansas' expanded program for low-income households. It proved essential last June when he needed to replace his right knee, and covers costly prescriptions for acid reflux and medicines.

Bryant, 48, had been out of work again for more than a year until late last month, when he got hired as a in his On a 90-day probation period, he hopes the job will turn into full-time work. He had been living off a monthly short-term disability check from his last job assembling rear axles for cars. There's not much on offer near his home in Earle, Arkansas, population 2,000.

If his job doesn't pan out, his unemployment will pose a new threat to his coverage.

In June, became the first U.S. state to require that many able-bodied recipients do some combination of work, volunteer, job training or schooling a minimum of 80 hours each month to keep their benefits, a sweeping shift in rules that will soon be followed by and Another eight states await approval from the for similar work requirements that will fundamentally refigure the 50-year-old program.

Republican governors and lawmakers say the work requirements are vital to help manage their ballooning costs, particularly in states like that expanded the program under former Barack Obama's Affordable Care Act. The goal, they say, is to encourage healthier residents to return to the employment track, or seek better jobs that could eventually bring benefits.

"It's an element of individual responsibility that if you're able-bodied … you should be contributing in some fashion," Asa said in an interview. "You always want people to move up to make more wages and have a higher income so they don't even have to qualify for Medicaid."

Yet the new measures have triggered fears that thousands could lose their Medicaid benefits, putting already vulnerable laborers deeper into the hole. The changes are also forcing insurers to hustle to help clients navigate the maze of paperwork they must complete to keep benefits intact.

And Kentucky's plan, poised to become the second to take effect, hit an abrupt halt last month when a blocked the law - deeming the Trump administration's approval "arbitrary and capricious." The never fully considered whether Kentucky's plan will provide medical assistance to residents, U.S. ruled. The state said it will amend its proposal in hopes of clearing the legal hurdle.

In alone, nearly 100,000 more people could be eliminated from Medicaid within five years than without the new measures, state estimates say. Kentuckians who do not work 80 hours in any one month or fail to pay new premiums will be locked out for six months; beneficiaries could take a health or financial literacy course to reactivate coverage.

In Arkansas, those who fail to meet the work requirements for any three months will be locked out of for the remainder of the year.

In meetings with state legislators, the has expressed concern that many affected by the rules will either not be able to find work, or won't be able to meet because they live in rural areas without reliable

"We're worried about people losing coverage who should not be losing their coverage," said Bo Ryall, the group's

As he visited a local health clinic for severe back pain, Bryant pondered that question. "I thought the insurance was to help us, even if you're working, even if you're not working," he said. "It was supposed to help us, not pull us down."


The Republican-controlled tried several times last year to repeal Obamacare, formally known as the Affordable Care Act, and replace it with new legislation that would have overhauled Medicaid by giving states block grants to run their own Medicaid programs in lieu of the existing federal-state partnership. Their proposals would have federal spending on the government's program for the poor and disabled by nearly $800 billion over 10 years.

When those efforts failed, the put a conservative stamp on health policy, including approving state requests to implement work requirements.

Most states that have submitted proposals will require adult beneficiaries who are not disabled, pregnant or elderly to engage in some combination of work, volunteer, job training or school opportunities for at least 80 hours a month - or lose their benefits.

Such requirements create new hurdles to in states that adopt them. Those businesses, including health insurers, hospitals and community clinics, say they're moving to minimize the number of people who could lose their insurance.

WellCare, one of Kentucky's five Medicaid providers, said it will help connect members with job opportunities and training courses. It will staff a call center for beneficiaries to navigate requirements and services such as child care or access to The insurer has been meeting for more than a year with state officials gearing up for the program rollout, said Bill Jones, WellCare's state in

The company, which administers Medicaid plans in 12 states, has grown its business considerably since the Medicaid expansion took effect in 2014. Its stock price has more than tripled in that time.

"There's always a concern there's going to be business impact. I just want to make sure we're not losing the wrong members," Jones said, referring to beneficiaries who meet the requirements but don't properly log their hours.

The insurer could lose members who transition to employer-provided coverage, Jones added, calling that the "right reason."

Hospital and insurer lobbyists have begun pushing state government and health officials to allow for flexibility in exemptions from work, such as for those who live in areas with high unemployment, and to allow for a grace period before someone is locked out. They also want states to weigh worries that Medicaid members may not have to work.

has staffers in its stores to help residents log their hours. The insurer will contact members not complying with work requirements - by, among other steps, tracking whether patients have picked up a pharmacy prescription. The would then ensure customers understand the new rules. said it was working with Walmart, Walgreens, CVS, local pharmacies and others.

In Arkansas, the work requirements apply to the Medicaid expansion population, which totals about 300,000 people. But many will be exempt from the new rules thanks to exceptions, including for illness, disability, pregnancy or their role as a caregiver.

Still, state officials estimate that up to 30,000-40,000 people in the first phase will have to find work to maintain their benefits, in which able-bodied adults 30-49 who earn less than $680 a month must submit documents each month showing they have worked or volunteered. In 2019, the program extends to adults 19-29.

Ennis Barnes, 40, fears he won't make the The new rules coincide with similar requirements for Arkansas stamp recipients, and Barnes has already received notice his benefits will be reduced.

Barnes lives in rural Lepanto, Arkansas. For several years, he's worked with temp agencies to connect with manufacturing jobs. He worries companies won't hire him permanently because of a drug charge dating back more than a decade. He works as a barber in his house a couple days a week - work that will not count toward his required hours since he doesn't get a pay stub.

"I've got a family to take care of, grandbabies and everything," Barnes said. "I just don't understand."

planned to introduce its "community engagement" requirements this month for able-bodied adults 19-64 who are not pregnant, medically frail, a single parent, chronically homeless, in substance abuse treatment, enrolled in or a full-time student. The state is phasing in beneficiaries by region. The requirements also impose premium payments based on income; some who fail to make the payment will have to take a financial literacy course.

That plan hit a roadblock in federal court.

Sixteen Medicaid recipients in Kentucky won a federal lawsuit asking a to overturn the state's work requirements, contending the federal HHS went beyond its authority by approving Kentucky's waiver. The lawsuit said the plaintiffs are at risk of losing health benefits because of new eligibility criteria, the highest-ever premiums allowed in Medicaid and lockouts for those not meeting the requirements.

Kentucky said the judge blocked the program on the "narrow basis" that HHS had not considered the plan's impact on Medicaid coverage, and said it would work with the agency to address the issue.

Days after the ruling, Kentucky dental and vision benefits for some 460,000 state Medicaid recipients, saying the benefits were dependent on implementation of the community engagement requirements. Without the new rules, "immediate benefit reductions would be required to compensate for the increasing costs of expanded Medicaid," said Doug Hogan, for the state's

Some legal experts say the ruling could thwart the Trump administration's Medicaid blueprint, should residents in other states bring similar lawsuits.

"It points to the failure of the administration to provide a legitimate record to justify the approval," said Allison Hoffman, a at the "It's unlikely that they're going to come up with the kind of evidence they need to show that the requirements here actually make poor people healthier."


Major corporations with large numbers of workers, such as Walmart, headquartered in Bentonville, Arkansas, are one focal point of concern.

The world's largest retailer has shifted to more workers over the last decade, according to a May report from the Organization United for Respect, formerly called OUR The group says it is a network of more than 150,000 people working in

An estimated 50 percent of Walmart's U.S. workforce in 2018 is part-time, compared to 20 percent in 2005, the report said.

Daniel Schlademan, OUR's of organization, said that means more workers rely on state Medicaid programs for their healthcare, but did not provide figures. "All this is going to do is make more people have less coverage," he said.

said its health plan covers more than one million people in the U.S., including spouses and dependents, and has seen the number of associates eligible for health coverage grow as its full-time workforce expanded. Its part-time employees are eligible for medical benefits if they average 30 hours per week over a 12-month period, the company said.

Walmart did not say how many of its employees receive health benefits, and it declined to provide a breakdown of part-time and full-time workers. The company disputed the OUR report, saying it converts about 150,000 employees a year from part- to full-time.

"We are proud to be one of the few retailers with a majority full-time hourly workforce," said Walmart "We have more full-time jobs than any private business in and we have seen that percentage go up over the last few years."

Part-time and temporary workers could be particularly vulnerable with the new changes: Part-timers comprised nearly 16 percent of Arkansas' workforce in 2017, or 208,000 people, federal data show.

Walmart and Tyson Foods, another large Arkansas employer, declined to discuss how the Medicaid measures would affect their workforces. Other large state employers, including Ferrellgas, OK Foods, and Dillards, declined comment.

Supporters of the new law say it will push more residents to find full-time work. Arkansas, for one, is short on registered nurses, certified assistants, technical health field workers, truck drivers, construction workers and manufacturing laborers, said President

"It's going to persuade some people to take another look and likely they'll find better opportunities than they thought were available," Zook said.

noted, though, that the new rules could be a challenge for people in rural pockets where full-time job openings have historically been thin.

Tina Lotts, 46, is one case study. She works 40 hours a week as a at a consumer goods and Yet Lotts is not considered a full-time employee and doesn't qualify for from her employer. A diabetic, Lotts relies on Medicaid for her doctor visits and the four medications needed to control her blood sugar levels and

"I have 11 bills and it's hard to pay them all," Lotts said.

Since he lost his short-term disability payments, Bryant is applying for long-term disability in the hope of receiving an exemption from Arkansas' requirements so that he is not at risk of losing his insurance. His wife, Felicia, has already applied for long-term disability due to vertigo, sciatic and other issues.

Ideally, Bryant said, his new job will turn into full-time work and he won't need an exemption. "I'm trying to find work every day."

Indeed, advocates challenge the notion that able-bodied Americans haven't pushed to find jobs, an underlying tenet of the new rules. The number of Americans actively engaged in the force who are looking, but haven't found jobs, has declined to an 18-year low of 3.8 percent, and is considered near or at full employment.

"These are people who want to work full-time but can't get full-time work," said William Spriggs, of the AFL-CIO union. To Spriggs, the work requirements are "extremely naïve to assume that simply looking for a job gets someone a job" - or, at worst, "mean-spirited."

Hutchinson, of the new law's first test case, disagrees.

"It's not punitive," he said. "It's simply that we respect work and we know the people of Arkansas want to work."

(Additional reporting by Editing by and )

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, July 10 2018. 16:58 IST