Arizona gives up on controversial Medicaid work requirement

Arizona will suspend the implementation of its Medicaid work requirement and other proposed changes to the program, according to a letter sent to the CMS by the state on Thursday.

Citing the “evolving national landscape” and ongoing lawsuits against other states’ work requirements, Arizona decided to delay its own, similar community engagement policy that was supposed to go into effect Jan. 1, 2020.

Arizona would have required about 120,000 low-income non-disabled adults between the ages of 18 and 49 to report at least 80 hours per month of employment, educational activity, job search or training or volunteer community service to keep their Medicaid benefits. The Section 1115 waiver also included premiums and cost-sharing.

The state, like others, said the requirement was based on how employment can positively affect health and well being.

During oral arguments on Oct. 11, three federal appeals judges seemed ready to strike down Medicaid work requirements for Arkansas and Kentucky because the CMS-approved waivers didn’t consider how they would affect coverage.

Hospitals and patient advocates have warned that work requirements can lead to significant coverage losses, interrupt care for people with chronic conditions and balloon uncompensated care costs. They make the case that low-income adults will have a harder time finding and keeping a job if the state takes away their coverage and hurts their access to healthcare. There’s also a lack of evidence that work requirements increase the number of Medicaid-eligible people who work. More than 6 in 10 adults that receive Medicaid already have a job.

Fewer low-income, working-age adults in Arkansas reported that they had health insurance after the state’s Medicaid work requirement went into effect last year, according to a recent study in the New England Journal of Medicine. The same study found that fewer of them had a job or participated in qualifying community engagement activities, even as Arkansas’ unemployment rate continued to drop.