The Leaflet: Medicaid Waivers Get the Green Light

Published March 9, 2018

On Monday, the Trump administration approved Arkansas’s Section 1115 Medicaid demonstration waiver to enact work requirements for recipients enrolled in Arkansas Works, the state’s health insurance program. Arkansas is the third state, including Indiana and Kentucky, to receive approval of its 1115 Medicaid waiver from the Centers for Medicare and Medicaid Services (CMS). These approvals have been rolling out swiftly since CMS Administrator Seema Verma announced in January her support of waivers allowing states to promote community engagement, self-sufficiency, and a stronger work ethic among Medicaid recipients.

The Arkansas waiver will require adult beneficiaries (ages 19–49) without young children to work, volunteer, or attend job training classes for at least 80 hours per month. Exemptions from the work requirement exist for those participating in a drug treatment program, suffering from a chronic illness, caring for a sick person, or receiving unemployment benefits. Beneficiaries who do not meet the minimum requirements for any three month-period will be ineligible to receive Arkansas Works benefits and not able to re-enroll until the following year.

Of the current 285,000 Arkansas Works enrollees, fewer than half (about 69,000) will be subject to the work requirements because of the exemptions, which are more generous than the provisions in the Indiana and Kentucky Medicaid waivers. On the other hand, the consequences for beneficiaries who fail to meet the work requirements in Arkansas is more stringent.

“It’s not about punishing anyone,” said Gov. Asa Hutchinson (R) in a news conference about the waiver. “It’s about giving people the opportunity to work. It’s to give them training that they need. It’s to help them move out of poverty and up the economic ladder.”

The Heartland Institute, which advocates for innovative welfare reforms, welcomes the latest CMS waiver approval. “These are exactly the welfare reform initiatives The Heartland Institute has been pushing in dozens of states,” said Heartland President Tim Huelskamp. “Since the state of Arkansas unwisely expanded Medicaid in 2014, we have produced dozens of policy documents on the need to innovate and reform Medicaid, not expand its failed, outdated policies.”

Seven other states have 1115 work-requirement waivers, which most Americans support, pending approval from CMS: Arizona, Kansas, Maine, Mississippi, New Hampshire, Utah, and Wisconsin.

Senior Policy Analyst Matthew Glans, author of the Heartland Policy StudyDon’t Wait for Congress to Fix Health Care,” said these seven states and others should take a proactive approach to reforming their expensive, bloated state health programs, including encouraging price transparency, expanding high-risk pools, or submitting 1115 waivers to roll back Medicaid expansion, interject a direct primary care model, or add work requirements for certain recipients.

“States waiting for Congress to pass health care reform need wait no longer. Instead of being reactive to what’s happening in Washington, DC, state lawmakers should be proactive, applying for waivers from CMS to allow for more control over their Medicaid programs and adopting a state reform agenda,” wrote Glans.


What We’re Working On

Increase in Private School Enrollment Leads to Increase in Test Scores
In this Research & Commentary, Policy Analyst Tim Benson writes about a Cato Institute Policy Analysis showing that an increase in the percentage share of students attending private schools typically leads to “moderate” improvements in student achievement in math, reading, and science. The analysis of data from 52 countries, conducted from 2000 to 2012, shows that a 1 percentage point increase in the private school share of student enrollment led to a 2.5 percentage point increase in math scores, a 1.5 percentage point increase in reading scores, and a 1.3 percentage point increase in science scores on the Programme for International Student Assessment test.

Energy & Environment
Massachusetts Should Reject Carbon Tax
In this Research & Commentary, Policy Analyst Tim Benson writes about a carbon tax proposal in Massachusetts that would begin at $10 per ton and increase by $5 per ton each year until it reaches a $40-per-ton cap. Benson notes at 16.48 cents per kilowatt hour, Massachusetts currently has the second-highest retail electricity prices in the continental United States and argues a carbon tax would increase living expenses for working families in Massachusetts, who are already pinched by the state’s high cost of living. The proposed tax would leave Massachusetts residents with less money to spend and save—without any guaranteed environmental benefits.

Budget & Tax
South Carolina Should Reform Civil Asset Forfeiture
In this Research & Commentary, State Government Relations Manager Lindsey Stroud examines a proposal to reform South Carolina’s civil asset forfeiture laws. “Lawmakers in the Palmetto State should restore due process to their criminal justice system by reforming the state’s civil asset forfeiture laws. By removing incentives for police to seize assets, requiring a criminal conviction and establishing where proceeds can go, South Carolina could lead the nation in criminal justice reform,” wrote Stroud.

Health Care
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From Our Free-Market Friends
No Need for Another Tax-Hike
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