Workforce Training May Be Part of Revamped Arkansas Medicaid Plan

Governor Asa Hutchinson seeks changes to Arkansas' first-of-its-kind Medicaid expansion waiver, which may include workforce training requirements and higher out-of-pocket costs for those newly insured.

Arkansas Governor Asa Hutchinson is trying figure out an acceptable way to keep the first-of-its-king Medicaid “private option,” which helped give his state the nation’s largest drop in the rate of uninsured Americans under the Affordable Care Act (ACA).

But he also seeks changes that will move the program further away from “Obamacare,” and the key may be a requirement that at least some beneficiaries be enrolled in workforce training.

The tenet is among several that Hutchinson will send to a legislative task force weighing the long-term future of Arkansas’ Medicaid expansion program, which became a model for more conservative states that sought to draw in federal dollars to support their hospitals without fully embracing the ACA.

After his election last November, Hutchinson initially left Arkansas’ CMS waiver intact, saying he would not disrupt coverage to more than 200,000 people who had gained it under the law. Observers said that he was faced with the reality that other GOP governors would confront: one citizens gained benefits under the ACA, it would be virtually impossible to take them away, no matter how much the party despised the law or the president.

During remarks last week, Hutchinson said he wants to keep Arkansas’ private option, but with some key changes “to accomplish our objectives, reinforce our values and to afford our future.”

Among the changes he will forward to the legisalture:

· A requirement that some beneficiaries who are not working (likely those in households earning between 100% and 138% of the federal poverty line) accept workforce training to receive benefits.

· Recipients who are in Medicaid under the private option but have access to an employer-sponsored plan must enroll in that plan instead. This requirement is expected to affect very few workers.

· Those in the private option may have to apply some benefit dollars to pay a portion of their premium, which would increase their out-of-pocket costs but save money for the state.

· The governor seeks to end payments to fund non-emergency transportation costs.

· Hutchinson wants to start preparing for the years after 2017, when states start paying 10% of expansion costs, by cutting $50 million from the program now.

· Arkansas may apply for a “global waiver” to increase flexibility in how it uses Medicaid funds. This is an option many states may seek in upcoming years.

Why Work Matters

Proof that Medicaid beneficiaries are being trained or seeking employment have been sought by Republican governors since the start of the waiver process; former Pennsylvania Governor Tom Ridge tried—and failed—to get such a requirement in his state’s waiver (which is now being swapped for traditional expansion).

But as the number of states with expansion reached 30, HHS Secretary Sylvia Mathews Burwell recently conceded to a gathering at the National Governors Association that future expansion in conservative states will hinge on her department’s willingness to be flexible on work requirements. “We think you want work encouraged, and we think there are ways to do that,” Burwell told the governors, including Hutchinson.

The workforce training requirement, as well as several other changes that Arkansas is contemplating, would require CMS approval.