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Damaging effects of Arkansas’ Medicaid reporting requirements a warning sign for Kentucky

According to a new report by the Washington, D.C.-based Center on Budget and Policy Priorities, Kentucky’s recently approved 1115 Waiver known as Kentucky HEALTH will lead to significant coverage losses and other unintended consequences.

The Bevin Administration received approval in November for the waiver, which allows Kentucky to take away Medicaid coverage from people who don’t report at least 80-hours of work or other activities through an online portal each month. The report examines the damage a similar policy has inflicted in Arkansas and explains why coverage loss is inevitable.

Since June, nearly 17,000 Arkansas residents have lost coverage due to the state’s unprecedented new requirements. This amounts to nearly 22 percent of all Medicaid beneficiaries so far subject to the new policy. What’s more, the number of beneficiaries losing coverage in Arkansas far exceeds the number of beneficiaries estimated to not be working or eligible for exemptions. That means working people and people who should be exempt (such as people with disabilities and other serious health needs) are losing coverage because of new paperwork requirements and red tape.

“What’s happening in Arkansas should be viewed as a flashing red warning signal to Kentucky,” said Emily Beauregard, executive director of Kentucky Voices for Health. “Working Arkansans are losing their coverage because the reporting requirement is too onerous and disabled adults aren’t being protected. It would be irresponsible to move forward with implementing the same requirements and penalties in Kentucky when we know that it will lead to tremendous coverage losses.”

While some Arkansans were automatically exempt from the new policy, more than half of those who had to report exemptions or work hours under the new requirement failed to do so and lost coverage. Moreover, the reporting requirement isn’t promoting employment, despite proponents’ claims to the contrary. Rather, it’s causing some working people to lose coverage, making it harder for people with chronic conditions to get the medications and other health care they need to work.

Any reporting requirement will have these unintended consequences of taking coverage away from people who are already working or should be exempt due to illness, disability, or other factors.

As Arkansas’s example shows, complex rules for reporting and claiming exemptions increase paperwork and red tape, which cause eligible people to lose coverage and become uninsured. In addition, working Medicaid beneficiaries often have low-wage jobs with volatile hours and little flexibility, so they may not be able to work a set number of hours each month — meaning that even people strongly attached to the labor force will lose coverage. Among working low-income people who could be subject to Medicaid reporting requirements, almost half would fail to meet an 80 hour-per-month requirement like Kentucky’s at least once over the course of a year.

The reporting requirement outlined in Kentucky HEALTH is even harsher and more complex than Arkansas’. Kentucky has fewer automatic exemptions and recipients can be locked-out after only two months of not meeting the requirement, compared to three months in Arkansas. With online reporting as the only option, many Kentuckians will also struggle to have sufficient internet access and computer literacy for reporting and documenting activities.”

“There’s no way to ‘fix’ a reporting requirement,” said Dustin Pugel, policy analyst with the Kentucky Center for Economic Policy. “No design tweak will avoid the damaging impact harsh penalties will have on workers and people with serious health conditions here in Kentucky.”

The non-partisan Medicaid and CHIP Payment and Access Commission (MACPAC) recommended that the Trump Administration immediately pause on allowing any more people to lose coverage in Arkansas as well as on approving work and reporting requirements in other states. Kentucky’s policymakers should also heed that recommendation.

Read the complete report here.

From Kentucky Voices for Health

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