With the return of Donald J. Trump to the White House, Arkansas has a new–and critical–opportunity to reform our largest welfare program, which is long overdue. The Arkansas Department of Human Services (DHS) recently announced their plan that they purport does just that. But a closer look at the details of DHS’s plan finds it, unfortunately, fails to achieve its stated goals.
Instead, DHS’s proposed Medicaid tweaks include no work requirement, continue the failed Obamacare private option model, contain no cost controls or meaningful savings, and will in fact likely increase taxpayer spending on this broken welfare program.
Problem #1: DHS’s waiver does not include a work requirement
There’s plenty of problems with DHS’s proposed plan–which takes the form of what they call the “Pathway to Prosperity” waiver–but the most significant is the lack of a work requirement.
You read that right: the “work requirement waiver” actually includes no work requirement at all.
Read the text of the waiver for yourself:
No work required; it’s right there in black and white.
What the waiver does do, however, is hire “success coaches”—to the tune of $43 million of your money—who will craft “personal development plans” for able-bodied, working-age Obamacare enrollees.
It’s unclear what these “development plans” will include, but it is clear that there will be no real consequences if enrollees choose to ignore them: They will keep their benefits, which you pay for, and they’ll be able to keep them forever.
They will face no time limit or any sort of off-ramp that would help get them back into the workforce.Does this sound like a “work requirement” to you?
READ: How Arkansas can lead the nation in Medicaid reform once again
Problem #2: DHS’s plan continues the failed Obamacare “private insurance” option
When Arkansas chose to expand Obamacare to able-bodied adults in 2013, policymakers–duped by Democrat Governor Mike Beebe–chose to do it in the most expensive way possible: rather than giving these adults regular Medicaid coverage, taxpayers finance private, Blue Cross Blue Shield plans for them.
The result is that these adults, most of whom do not work at all, get better insurance coverage than many hard working Arkansans (including me!)
Unsurprisingly, this model has proven to be roughly twice as expensive and has failed to keep premiums down or deliver on the myriad of other promises made by its architects.
DHS’s current proposal not only perpetuates this model but would require its continuation even further into the future, because the temporary pausing of these private plans is the only pseudo-scanction that enrollees might face for not complying with their “success coaches.” Their entire “work requirement” is built on the continuation of this failed model.
Arkansas remains the only state in the country to utilize this exceptionally expensive model. Taxpayers have thrown enough good money after bad. This failed model should be scrapped entirely, not further entrenched.
Problem #3: DHS’s plan is a major missed opportunity to find real savings for taxpayers
DHS’s plan also won’t deliver any meaningful savings for taxpayers, but instead would likely heap even more wasteful spending on taxpayers.
If this waiver were implemented, it’s estimated that budget savings would be a pittance—about $123 million in savings over five years, or about $24.6 million per year.
That’s just 1.2 percent of Arkansas’s annual Medicaid expansion spending and 0.33 percent of Arkansas’s annual total Medicaid spending. In other words, it won’t even make a dent.
And of course these alleged savings are government estimates, so it’s safe to assume they are best case scenario projections.
In fact, considering that the waiver has no real sanctions to reduce dependency, it is likely it would actually increase Medicaid spending.
Compared to Arkansas’s past Obamacare work requirement that was on track to save $300 million annually, this waiver is a colossal swing-and-miss.
There is a better way forward for taxpayers and Arkansas’s truly needy
Arkansas deserves a Medicaid waiver that truly incentivizes work, reduces dependency, and ensures accountability, like other states such as Georgia, Indiana, and Ohio are moving forward with.
A real, conservative Medicaid waiver would include:
- A real work requirement—one that mandates participation for able-bodied adults as a condition of eligibility for benefits. This could save the state roughly $150 million per year and move able-bodied Arkansans back into the workforce.
- An end of the private option and instead pursue traditional expansion, and in so doing, save another $90+ million for taxpayers;
- A cap for total enrollment of 100,000 to ensure the program is sustainable;
- A reasonable lifetime limit for able-bodied adults on the program; and
- And ultimately, the waiver should address fraud and make sure that every Medicaid dollar the state spends is going to an individual that is truly eligible
It’s time for DHS to return to the drawing board, and take some of our suggestions with them.
DHS’s waiver should be re-aligned with their stated goals and should be replaced with a conservative, reform-oriented waiver that will truly work for the people of Arkansas.
NOTE: DHS is currently accepting public comments on this proposal through March 3rd. If you’d like to submit a comment and tell DHS you want a REAL work requirement that will move Arkansans from welfare to work, send them an email to: [email protected].
