The Government Stepped Back in Arkansas. Who Was Supposed to Be There All Along?

BETHANY HERRON
Vice President of Comms and Learning
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Introduction

Scientific research provides valuable insights into the best practices of charitable programs and government policy. Often, a well-designed study does a better job of confirming or disproving our assumptions than anecdotal observations or deliberate outcomes measurement. 

A case in point is a 2019 research study entitled Medicaid Work Requirements — Results from the First Year in Arkansas from the New England Journal of Medicine. 

What question did this research answer?

Did Arkansas’ requirement that adults on Medicaid report work or community engagement help people work more or cause them to lose health insurance?

As of the study date, Arkansas was the first state to implement work requirements for eligible adults ages 30-49. (Eligibility did not include pregnant women or those caring for a dependent). Researchers sought to determine the impact of Medicaid coverage retention rates on employment outcomes. Findings revealed there was a significant drop in health insurance coverage, a notable increase in private insurance, and little to no impact on employment. 

Study Design

Data Source: The New England Journal of Medicine

Sample Size: 5955 respondents

Type of Study:

• This study is a “natural experiment,” which means that researchers observe the apparent effect of an intervention, while using some external event to simulate random assignment into the groups that do and do not receive the intervention (treatment and control groups). 

For example, if you want to determine whether higher levels of education cause higher incomes, you could look at the effect on income for people who gain entrance into a college by a single point on a standardized test versus those who are ineligible by a single point and go on to not attend college. Since people with such similar scores are very similar, this allows researchers to simulate a scientific experiment and potentially prove that a college education causes higher income.

Limitations:

The study followed the impact of reporting requirements for one year. Therefore, there is no data showing the requirements’ long-term effects. Additionally, because the information was gathered from phone surveys, social desirability bias would tend to result in overreporting of work. This may substantially skew the number of people who appear to be in compliance with the work requirements.

Key Findings

• There was a significant Medicaid coverage loss. About 18,000 people lost it in the first year (representing roughly 12% of those subject to the reporting requirement). According to the phone survey, most of them were in compliance with the substance of the eligibility requirements, if not the reporting. While it’s likely that not everyone who reported eligibility was genuinely eligible, many others seemed to struggle with reporting requirements.  They didn’t understand reporting rules, lacked internet or technology access, missed paperwork deadlines, and incorrectly believed they were exempt from reporting requirements. They reported that coverage loss was driven primarily by administrative barriers rather than by unwillingness to work.
• There was a notable increase in private and other insurance.* While government subsidized health insurance decreased from 70.5% to 63.7% of the population affected by the community engagement requirements, not all of them lost coverage entirely. 4 in 10 of those who lost subsidized coverage (roughly 7,400 of the 18,000) replaced that coverage with some form of insurance (including employer sponsored insurance, direct purchase insurance, etc.).  
• There was no meaningful increase in employment. Researchers found no significant increase in reported workforce participation. Most people subject to the policy reported that they were already working or already exempt (i.e., caregivers, disabled individuals, and students). Note that there may be substantial differences in how people respond to work requirements in different types of welfare programs. Medical insurance may not be viewed by younger workers as essential as food or housing subsidies. Consequently, Medicaid work requirements might motivate less compliance than requirements in other programs.  
• Complexity harmed the most vulnerable. Those most likely to lose coverage were people with lower education levels, unstable housing or work hours, and limited access to technology.

Practical Application 

Arkansas citizens’ loss of Medicare portends a nationwide loss of government benefits in the wake of the One Big, Beautiful Bill. While federal work requirements for SNAP and Medicaid may not parallel the Arkansas experience in all respects, increased eligibility requirements will almost certainly result in reduced takeup in those programs. 

Arkansas’s increased private insurance suggests that there were also thousands of people on the program who were capable of providing for themselves and found it easier to do so than to comply with eligibility requirements. This outcome is largely positive as it increases independence and reduces program outlays (though it may make life more challenging for former recipients in the short run). Others will lose coverage for inability or unwillingness to comply with the requirements.

People transitioning off of government benefits will  provide a unique opportunity for a resurgence of civil society in the fight against poverty. Our churches and communities can be ready with co-operative childcare support, food co-ops, work-ready programs, and community-driven medical options for the uninsured. 

Distant programs, like Medicaid, have no way of knowing what a person truly needs and, by nature, create unhealthy dependency instead of long-term freedom from poverty. When civil society steps in to meet those needs, people are more likely to be known and therefore empowered in ways that are most beneficial. 

Where do you start? 

• Listen to your community’s needs. Conversing with individuals in your community is a great way to know what local ministries would be most beneficial. Our Listening Tour Guide, available to network members, can help you do that. 
• Create a community asset map. This is a great way to get a holistic picture of the support your community offers. 
• Start applicable programs. After listening to the needs of your community and mapping its assets, use True Charity’s programmatic resources to build out the programs needed most. 
• Practice subsidiarity. At the end of the day, those closest to a situation (individuals, families, and communities) are best positioned to solve problems. 

Conclusion

The first year of Medicaid work requirements in Arkansas demonstrated that these requirements are more likely to disenroll people from these programs than to increase work activities.

While this experience may not translate to all public benefit programs, it highlights the inherent paradox of designing “one-size-fits-all” programs to help people in poverty. Since demand for free things always outpaces supply, these programs must build labyrinthine eligibility requirements to restrict access to the most vulnerable. These same eligibility requirements designed to reserve the resources for the target population also make it more difficult for that population to access the resources.  

Distant programs can never fully know what a person truly needs and tend to nudge people toward unhealthy dependency. But compassionate neighbors exercising local knowledge can! That’s why churches and local communities must see loss of benefits as an opportunity to step in with relational childcare cooperatives, work-ready programs, shared meals, and community-driven medical options for the uninsured.

Read the Study

https://www.nejm.org/doi/pdf/10.1056/NEJMsr1901772

*Technical note: Researchers reported four mutually exclusive categories for insurance. Medicaid & Affordable Care Act Marketplace Subsidized Insurance, Employer-Sponsored Insurance, Uninsured, and Other Insurance. Among the age group affected by work requirements, the shift in ACA-Subsidized insurance and the uninsured was statistically significant at the standard 95% confidence level (i.e. there is a 95% chance that there was a real shift, and not a measurement error). The shift in private insurance was “marginally significant” at the 90% confidence level. The significance of the shift in the “other insurance” was not reported. Thus, the notable increase in the combined tally of private  and other insurance is not definitive, but it is strongly suggestive.

Explore True Charity’s programmatic resources for building local impact at truecharity.us.