Arizona Answering Tough Questions Regarding Medicaid Work Requirements

By Sara Kizer.

Ten states received approval from the Centers for Medicare and Medicaid Services (CMS) to impose Medicaid work requirements on beneficiaries to incentivize work and community engagement among non-disabled, non-elderly adult Medicaid beneficiaries. Through these requirements, states established minimum hours of working or volunteering that eligible beneficiaries must complete to maintain Medicaid coverage. CMS argues that this requirement will help these low-income beneficiaries rise out of poverty. However, opponents point out that Medicaid demonstrations must fulfill the purpose of the Medicaid program, which is to provide healthcare coverage. For example, more than 18,000 people in Arkansas lost Medicaid coverage before a federal judge halted the program, reasoning that government officials did not adequately consider the potential to cause beneficiaries to lose coverage. Nonetheless, Arizona’s Medicaid agency, Arizona Health Care Cost Containment System (AHCCCS), applied and received approval to implement AHCCCS Works, which requires beneficiaries aged nineteen to forty-nine to work or volunteer at least eighty hours per month to prevent coverage suspension for two months. However, Arizona requested a work requirements exemption for American Indian beneficiaries, making it the only state to have an exemption like this approved.

Initially, CMS was not going to allow exemptions for the American Indian or Alaskan Native populations. CMS notified Indian tribal leaders that federal civil rights laws prevented the agency from exempting American Indians and Alaskan Natives from the work requirements because this is considered racial discrimination. Tribal leaders responded and stated that CMS has the authority to issue an exemption for Indian Health Services (IHS) beneficiaries through its power enacted in Section 1911 of the Social Security Act, which gives CMS the authority to support IHS through the Medicaid program. Thus, CMS Administrator Seema Verma announced that states could exempt this population at their discretion.

AHCCCS recognized the importance of allowing this exemption for all American Indians in Arizona. American Indians have higher rates of chronic conditions, such as diabetes and obesity, compared to non-Hispanic whites. They also are more likely to live in rural areas and have less access to work opportunities. In Arizona, nineteen percent of American Indians ages sixteen to sixty-four were unemployed between 2012 and 2016 compared to eight percent of others in the state. Also, Medicaid is a central funding stream for the IHS program. One tribe’s hospital would lose up to fifteen million dollars in Medicaid funding if work requirements were implemented. CMS approved a narrower exemption than AHCCCS initially requested by limiting the exemption to only those who are members of federally recognized tribes. Arizona has twenty-one federally recognized tribes.

AHCCCS Works was to start in January 2020. However, the agency sent CMS a letter in October stating Arizona’s decision to postpone the implementation of their waiver until further notice because of “the evolving national landscape concerning Medicaid [work requirement] programs and ongoing litigation regarding the topic.” In addition to the Arkansas program, the Kentucky and New Hampshire programs were also struck down by a district court. The U.S. Court of Appeals for the D.C. Circuit heard oral arguments for the Kentucky and Arkansas cases in October. During the oral arguments, all the members on the three-judge panel repeatedly said that CMS officials neglected to consider that people would lose access to health insurance. Fortunately, as Arizona and other states wait out the fate of Medicaid work requirements, those enrolled in federally recognized tribes in Arizona know they will not be impacted by these changes even if AHCCCS Works goes into effect.