Under Section 1115 of the Social Security Act, the Secretary of Health and Human Services (HHS) is permitted to waive certain federal Medicaid requirements to allow a state to undertake an experimental, pilot or demonstration project that is “likely to assist in promoting the objectives of” the Medicaid program. Section 1115 demonstrations are intended to test new approaches in Medicaid and the HHS Centers for Medicare & Medicaid Services (CMS) has long required states to conduct evaluations to determine their effectiveness. CMS also requires states to monitor and submit periodic reports on the implementation of their Section 1115 demonstrations. While monitoring reports provide immediate and ongoing information regarding demonstration implementation, evaluation findings, by contrast, may take years to obtain.

In early 2018, CMS issued guidance signaling its willingness to approve demonstrations that allow states to condition Medicaid eligibility on beneficiaries’ meeting work and community engagement (e.g., unpaid work, volunteerism) requirements. Since then, CMS has approved requests to implement work and community engagement (CE) requirements in six expansion states (Arizona, Arkansas, Indiana, Kentucky, Michigan and New Hampshire) and two non-expansion states (Maine and Wisconsin) and is now in the process of reviewing similar demonstration requests from an additional ten states (Exhibit 1). Early demonstration results in Arkansas, the first state to implement such requirements, highlight the high stakes for Medicaid beneficiaries subject to these provisions. Of the approximately 79,000 Arkansas Medicaid enrollees required to engage in work/CE in the first seven months of implementation, over 18,000 lost coverage for failing to meet the new requirements. To date, it is unclear how many of the individuals who lost coverage failed to comply because they had difficulties with reporting, did not work a sufficient number of hours, gained private coverage or had another reason. All states seeking to implement work/ CE demonstrations will need to provide sufficient resources for collecting and analyzing data to better understand these issues, and to meet their broader monitoring and evaluation obligations (Box 1).