Arkansas’ new work requirements come at a hard moment for state’s fragile healthcare system

Arkansas’ brief experiment with Medicaid work requirements several years ago showed health policy researchers the real-world implications of an idea long championed by conservatives.

Researchers’ findings were strikingly consistent. The requirements didn’t boost employment as promised and led to an uptick in the state’s uninsured.

Now state leaders are about to try the requirements again, but this time they’re doing it as the state’s healthcare system faces even greater strain.

Arkansas officials have begun what they call a “soft launch” of the requirements that are taking effect next year under the federal One Big Beautiful Bill Act signed by President Donald Trump. The state is checking to see if people using Medicaid thanks to the expansion meet the work requirements, though those requirements don’t take effect until January.

No one will lose coverage before the requirements take effect, and state Medicaid officials say the six-month window gives Arkansas a chance to test its processes for verifying eligibility.

The test run appears to be aimed at addressing one of the biggest complaints about Arkansas’ requirement. The first attempt was plagued with confusion and bureaucratic hurdles before it was blocked by a federal judge.

But even if Arkansas remedies that problem from the first go-round, it can’t change what researchers found last time when 18,000 people lost coverage.

Those problems were laid out in several reports examining the requirement’s rollout, especially a New England Journal of Medicine analysis in 2019. That analysis found a significant increase in uninsured adults, and no signs the requirement created workforce gains.

“We found no significant changes in employment associated with the policy, and more than 95% of persons who were targeted by the policy already met the requirement or should have been exempt,” the study said.

What’s different now is Arkansas expects even more people to be affected, with state officials estimating as many as 42,000 people using Medicaid under the expansion set to lose their coverage. Those numbers will only add to the state’s healthcare woes.

And it comes at a precarious time for the state’s medical providers, with hospitals around the state scaling back services in recent months. The cutbacks in varying parts of the state are fueled by low reimbursements for hospitals.

The strain is particularly acute in rural Arkansas. The state leads the nation in percentage of rural hospitals vulnerable to closure. Labor and delivery services continue to disappear from Arkansas communities, with some needing to drive more than an hour to give birth. The state keeps struggling with a shortage of physicians, nurses and other healthcare professionals. 

Adding to the uncertainty is the news last week that Centene, one of two insurers on the state’s Medicaid expansion, plans to leave the program in January.

Every person who loses Medicaid coverage doesn’t stop needing medical care. If history is any example, many of them will just be uninsured, and that raises the risk of even more uncompensated care costs for Arkansas’ hospitals.

Eight years ago, Arkansas hadn’t undergone the real-world lessons it learned the hard way about the consequences of work requirements. Instead of learning from that experiment, the state may be on the verge of getting some even harder lessons about what creating even more uninsured people does to a healthcare system on the brink.