Arkansas

Cluster 5: High-Complexity Transition States

Arkansas is the only state that has already demonstrated at scale what H.R. 1’s work requirements will produce nationally. In 2018, the state became the first to impose Medicaid work requirements. Within seven months, 18,000 people lost coverage, employment did not increase, medical debt spiked, and a federal judge halted the program. The results were published in the nation’s leading health policy journals. The federal government mandated the experiment anyway.

Now Arkansas receives $208.8 million per year to transform a rural health system where 50% of hospitals are vulnerable to closure while simultaneously reimplementing the policy it already proved causes harm, at broader scale, backed by federal law rather than waiver. The question is not whether RHTP can transform rural healthcare in isolation. The plan is credible. The question is whether $161 per resident per year can build fast enough to compensate for what happens when 131,000 Arkansans lose coverage and the state that generated the evidence against work requirements is required to impose them again.

State Context

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Arkansas has approximately 1.3 million rural residents across 58 counties classified as rural, representing 45% of the state’s population. The geography spans from the Ozark Plateau in the northwest through the Arkansas River Valley to the Mississippi Delta in the east, where some of the nation’s most persistent poverty concentrates in communities built around agriculture that no longer employs the workforce it once did. The Delta counties of Phillips, Lee, St. Francis, and Chicot have poverty rates exceeding 30%, populations declining by double digits per decade, and healthcare infrastructure that was never adequate and is now actively deteriorating.

Fifty percent of Arkansas’s rural hospitals are vulnerable to closure, the highest percentage in the nation according to the Chartis Center for Rural Health. The Center for Healthcare Quality and Payment Reform puts the numbers in starker terms: 30 of 47 rural hospitals with inpatient services are at risk of closing within six to seven years, with 12 at immediate risk within two to three years. That is a 64% at-risk rate overall and a 26% immediate risk rate. The June 2025 CHQPR report was published before H.R. 1 became law. The Medicaid cuts enacted weeks later will compound every factor the report measured.

Seventy percent of rural hospitals in Arkansas are already operating at a loss. The Arkansas Center for Health Improvement noted that although the state had been “spared when it comes to hospital closures compared to surrounding states over the last decade,” the financial fragility was accelerating rapidly, with the number of at-risk hospitals rising from 20 to 30 in just eighteen months. The absence of closures has not been a sign of health. It has been a sign that hospitals were burning through reserves that are now nearly exhausted.

Arkansas ranks 48th in the Commonwealth Fund’s 2025 State Health System Performance Scorecard and 48th in America’s Health Rankings. The state has the highest food insecurity rate in the nation. Maternal mortality ranks fourth highest nationally at 38 deaths per 100,000 live births, and Arkansas is the only state in the country that does not guarantee 12-month postpartum Medicaid coverage, maintaining a 60-day cutoff that every other state has extended. Louisiana, facing similar high-complexity transition challenges, extended postpartum coverage to 12 months through its 1115 waiver. Arkansas has not.

The Medicaid program covers more than 808,000 Arkansans as of October 2025, including approximately 234,000 enrolled in ARHOME (Arkansas Health and Opportunity for Me), the state’s Medicaid expansion program. ARHOME uses a distinctive premium assistance model in which Medicaid dollars purchase private health plans through the marketplace, a structure originally launched as the Private Option in 2014, renamed Arkansas Works, and then restructured as ARHOME under a 2022 Section 1115 waiver. The federal government covers 90% of ARHOME costs. More than half of Medicaid enrollees are children.

Governor Sarah Huckabee Sanders (R) took office in January 2023 and does not face election in 2026. The Governor’s office serves as the lead agency for RHTP, with the Department of Finance and Administration submitting the application rather than the Department of Health or the Department of Human Services. This placement gives RHTP direct gubernatorial authority but routes implementation through a fiscal agency rather than a health agency, creating institutional distance between RHTP administration and clinical expertise that defines Arkansas’s implementation challenge.

RHTP Application and Award

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Arkansas received $208.8 million for FY2026 with a projected five-year total of approximately $1.04 billion. At $161 per rural resident annually, the per-capita allocation places Arkansas ninth nationally and in the upper-middle tier among high-complexity transition states. West Virginia receives $229 per rural resident with a stronger Medicaid Math ratio (5.4:1 versus Arkansas’s 7.9:1). Louisiana receives $160, comparable to Arkansas but with a ratio nearly four times worse (25.9:1). The application was submitted October 31, 2025, with the award announced December 29. Over 99% of funds will be subawardeed to healthcare stakeholders.

The application organized around four branded initiatives, each aligned with federal priorities. Healthcare providers submitted more than 300 proposals to state officials for how to utilize RHTP funding.

HEART (Healthy Eating, Active Recreation, and Transformation): $150.5 million. Community-driven nutrition, physical activity, and chronic disease management programming. The initiative includes reestablishing the Presidential Fitness Test in schools by December 2028 and implementing nutrition education for medical professionals. HEART is the most MAHA-aligned initiative in the application, directly echoing the prevention-and-lifestyle framing that characterizes the administration’s health messaging.

PACT (Promoting Access, Coordination, and Transformation): $393 million. The largest initiative by far. PACT integrates specialty care, preventive screenings, telehealth, and trauma-ready services into rural communities through Clinically Integrated Networks (CINs) designed to improve efficiency, data sharing, and regional collaboration. The budget includes $125 million for specialty, preventive, and telehealth services, $125 million for hospital acquisitions, partnerships, and facility upgrades, $110 million for CIN development, and $25 million for expanded practice authority. The hospital acquisition line is distinctive and unusually honest about what sustainability requires.

RISE AR (Recruitment, Innovation, Skills, and Education for Arkansas): $161.5 million. Workforce development through expanded residencies, recruitment incentives, and career advancement pathways. The budget allocates $70.25 million for residency programs and scholarships, $67 million for recruitment and retention incentives, and $16.3 million for career advancement for nurses and other health professionals. The initiative includes training for hospital leaders and board members, recognizing that rural facility governance is often as much a constraint as clinical staffing.

THRIVE (Telehealth, Health Monitoring, and Response Innovation for Vital Expansion): $266.75 million. AI-enabled patient records, remote monitoring, telehealth platforms, and EMS modernization. The budget includes $105 million for medical and EMS equipment upgrades, $91.75 million for remote patient monitoring, $60 million for telehealth expansion, and $10 million for virtual specialty care networks. UAMS’s existing e-Link telehealth infrastructure provides a foundation. UAMS has operated telehealth services across Arkansas for over two decades, making this initiative less of a start-from-scratch build than similar proposals in states without established academic medical center telehealth networks.

Subawardees include UAMS, Arkansas Colleges of Health Education, Arkansas State University, Arkansas Rural Health Partnership, Baptist Health, Mercy Health, Arkansas Hospital Association, and Arkansas Foundation for Medical Care.

The Medicaid Math

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Arkansas faces $8.2 billion in projected federal Medicaid spending reductions over ten years, representing approximately 11% of baseline spending. The 7.9:1 RHTP-to-Medicaid-cut ratio means the state loses $7.90 in Medicaid federal funding for every dollar it receives through RHTP. This places Arkansas in the Severe Gap category, worse than West Virginia’s 5.4:1 but better than Louisiana’s 25.9:1.

The primary cut mechanism is work requirements, which will account for the largest share of federal Medicaid savings nationally according to CBO estimates. This mechanism has particular salience in Arkansas because the state has already demonstrated what work requirements produce.

AACF projects 131,000 Arkansans will lose health insurance coverage over the next decade as a combined result of Medicaid cuts and marketplace subsidy expirations, with another 57,000 at risk. The two congressional districts most heavily affected are the 1st and 4th, both predominantly rural, which rank in the top 15% of all 435 congressional districts nationally for projected Medicaid dollar losses.

Additional cut mechanisms compound the work requirement impact. Six-month eligibility redeterminations replace annual reviews starting December 2026. The retroactive coverage period drops from 90 to 30 days starting January 2027. Lawfully present immigrants lose eligibility regardless of length of residency, though COFA citizens including the significant Marshallese population in northwest Arkansas retain eligibility. Provider tax restrictions phase down rates threatening one of the key mechanisms Arkansas uses to finance its share of Medicaid costs.

The timing structure is brutal. The largest cuts are back-loaded: 76% of the ten-year reductions land between 2030 and 2034, precisely when RHTP funding ends. Arkansas will complete its transformation program just as the worst wave of Medicaid cuts arrives.

The Work Requirement Paradox

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Arkansas’s relationship to Medicaid work requirements is unique nationally because the state has already run the experiment at scale and documented the results. No other state except Georgia has operational experience with work requirements, and Georgia’s Pathways program enrolled fewer than 11,000 people. Arkansas imposed requirements on the full expansion population ages 30 to 49 beginning in June 2018, generating the largest evidence base in the country for what these policies produce.

The results were unambiguous. Within seven months, 18,000 adults lost Medicaid coverage for noncompliance. A Harvard research team led by Benjamin Sommers conducted the definitive evaluation, published in Health Affairs in 2020.

Work requirements did not increase employment over eighteen months. The policy’s central stated rationale found no empirical support. Arkansans subject to work requirements were no more likely to be employed than comparable adults in control states.

Coverage losses were driven by reporting failures, not actual noncompliance. Most enrollees who lost coverage never submitted any reports to the state, not because they were not working but because the online-only reporting portal was inaccessible to people without reliable internet. More than 70% of Arkansans remained unaware of whether the policy was even in effect. The number deemed noncompliant far exceeded those actually failing to meet activity requirements.

Those who lost coverage experienced measurable harm. Among 30- to 49-year-olds who lost Medicaid: 50% reported serious problems paying off medical debt, 56% delayed care due to cost, and 64% delayed taking medications. People who lost Medicaid did not transition to other coverage. They became uninsured.

A federal judge blocked the program in April 2019. Most coverage losses were reversed after the court order.

Now the same policy returns, mandated by federal law rather than waiver, applied to a broader age range (19 to 64 rather than 30 to 49), and without judicial review as a realistic check. Arkansas filed its Pathway to Prosperity waiver amendment in January 2025, seeking to implement work requirements ahead of the federal deadline. The state projects that 18,450 adults will be identified as noncompliant in the first year.

The Pathway to Prosperity design incorporates some modifications from the 2018 experience. “Success coaches” would work with noncompliant enrollees before coverage suspension. Benefits would be suspended rather than terminated, with restoration available upon cooperation. But the Urban Institute’s formal public comment noted that the highly mobile Medicaid population made outreach difficult during the previous implementation despite robust state efforts, and that disabilities and health conditions “cannot be effectively identified in medical claims” used for exemption determination.

Kevin De Liban and Trevor Hawkins, the legal aid lawyers who won the 2019 lawsuit, wrote in the New York Times that work requirements produce a perverse dynamic: “When you take away people’s health insurance, their otherwise manageable health conditions turn into unmanageable work barriers.” KFF research confirms that 92% of adults under 65 on Medicaid were already working or not working due to caregiving, illness, disability, or education. The requirement targets a population that largely does not exist in the numbers proponents assert.

Implementation Assessment

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Approach plausibility. Arkansas’s four-initiative structure is more coherent than most state applications. The $393 million PACT initiative’s emphasis on Clinically Integrated Networks addresses a genuine structural problem: 47 rural hospitals operating in isolation without shared services, coordinated referral networks, or economies of scale. The $125 million hospital acquisition line is unusually honest about what sustainability requires, explicitly contemplating system consolidation rather than pretending independent facilities can survive. Unlike Alabama’s 11-initiative fragmentation or Tennessee’s five-priority spread at lower per-capita funding, Arkansas concentrated resources in four domains with clear accountability structures.

UAMS provides institutional capacity most states lack. The e-Link telehealth network has operated for over two decades, providing infrastructure foundation that makes THRIVE’s $266.75 million telehealth and monitoring investment a scale-up rather than greenfield development. West Virginia has Marshall and WVU but neither matches UAMS’s telehealth footprint. Louisiana has LSU but distributes implementation across a more fragmented subawardee structure. Arkansas’s academic medical center concentration creates implementation advantages.

The institutional separation between RHTP and Medicaid creates coordination risk. Routing RHTP through the Governor’s office and DFA rather than the Department of Health or Department of Human Services places transformation funding under fiscal management rather than clinical expertise. DHS manages ARHOME, operates the Medicaid eligibility system, and will implement work requirements. DHS is not the lead RHTP agency. The entity building transformation infrastructure is organizationally separated from the entity administering the coverage program that determines whether patients can use that infrastructure.

Architecture trajectory assessment. Arkansas’s RHTP approach reinforces conventional delivery models while creating infrastructure that could support alternative architecture if implementation choices evolve.

The CIN development ($110 million) aligns with the inverse hub concept if configured for virtual-first specialty delivery rather than conventional hospital network coordination. The inverse hub model positions distributed virtual expertise reaching patients through local access points rather than requiring patients to travel to regional facilities. UAMS’s e-Link telehealth network provides technology foundation. Whether CINs become platforms for distributed care delivery or administrative coordination mechanisms depends on design choices not yet finalized.

Arkansas’s NP practice authority remains restricted, requiring collaborative agreements that limit independent practice. The $25 million for “expanded practice authority” in PACT signals intent to pursue regulatory transformation, but legislative action is required. Without scope expansion, the workforce Arkansas trains cannot practice independently in the rural settings where physicians are unavailable.

CHW infrastructure is underdeveloped compared to states with established certification and Medicaid billing pathways. Louisiana’s community paramedicine investment and West Virginia’s peer recovery specialist workforce represent local workforce models that Arkansas lacks. These models create sustainable careers for community members who remain in their home communities rather than requiring relocation for credentialing. RISE AR’s workforce initiatives emphasize professional training pipelines over community-based career development that would create sustainable local employment.

The EMS equipment modernization ($105 million in THRIVE) could build toward community paramedicine and treat-in-place models if scope expansion enables paramedics to provide primary care functions. These alternative delivery models bring care to patients rather than requiring transport to facilities. Current Arkansas EMS scope limits this pathway.

Risk Assessment

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Primary risk: Coverage loss outpacing infrastructure development. Work requirements begin implementation while RHTP infrastructure is still being built. The 2018 experience demonstrated that 18,000 people can lose coverage within seven months. RHTP-funded CINs, telehealth expansion, and workforce recruitment operate on longer timelines. The infrastructure serving patients arrives after patients have lost coverage access.

Secondary risk: Institutional coordination failure. DFA administers RHTP funding while DHS administers Medicaid eligibility and work requirement compliance. Neither agency reports to the other. Transformation investments that assume covered patients depend on coverage decisions made by a separate agency through a separate process. Louisiana consolidated RHTP administration under LDH, which also administers Medicaid. Arkansas did not.

Tertiary risk: Hospital closure acceleration. Thirty hospitals at immediate or near-term closure risk depend on Medicaid revenue that will decline through provider tax restrictions and coverage losses. CIN development may improve coordination and efficiency, but it cannot replace the patient revenue that makes facilities viable. The ACHI conclusion is direct: “It is anticipated that the $50 billion fund will not be enough to offset the loss of revenue” from concurrent Medicaid changes.

Mitigating factor: Political continuity. Governor Sanders does not face election in 2026. The administration that designed the application will oversee at least three years of implementation. Unlike Alabama, where gubernatorial transition creates uncertainty, Arkansas has executive continuity that enables consistent implementation direction.

Structural paradox risk. Arkansas is simultaneously investing $208 million per year to improve access to a healthcare system it is actively making less accessible through coverage reduction. The state that proved work requirements cause harm is required to reimpose them. This is not a risk the state can mitigate through implementation choices. It is a structural contradiction embedded in the policy environment.

Honest Assessment

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What Arkansas does well. The application is structurally competent and strategically coherent. Four initiatives with clear budgets, identified partners, and specific deliverables represent a fundable plan. The PACT initiative’s CIN emphasis addresses genuine structural problems. The hospital acquisition line is unusually honest about what sustainability requires. UAMS’s established telehealth infrastructure gives THRIVE a foundation most states lack. RISE AR’s inclusion of governance training for hospital leaders addresses a constraint that workforce pipeline programs typically ignore. The state’s per-capita allocation ($161) exceeds Tennessee ($86) and Alabama ($97) while serving fewer rural residents, creating resource density advantages.

Where the plan meets reality. The state demonstrated through rigorous independent evaluation that work requirements produce coverage loss without employment gains, that reporting requirements rather than actual noncompliance drive disenrollment, and that coverage loss generates measurable health and financial harm. The federal mandate in H.R. 1 now requires reimplementation at broader scale. Arkansas cannot refuse. The institutional separation between RHTP administration and Medicaid management means the entity building transformation infrastructure is organizationally separated from the entity deciding who can access it. The 7.9:1 Medicaid Math ratio is severe, and the timing structure concentrates 76% of cuts in the years after RHTP funding ends.

What would change the assessment. Three developments would shift the assessment. First, harm-reduction implementation of work requirements: maximizing exemption categories, extending compliance timelines, investing in accessible reporting systems, and using RHTP-funded community health workers to assist with documentation. Whether the Sanders administration chooses harm-reduction or aggressive enforcement determines how much of the $8.2 billion in cuts translates into actual coverage loss. Second, scope of practice expansion enabling nurse practitioners and community paramedics to practice independently, converting workforce training investments into accessible care delivery. Third, CHW certification and Medicaid billing pathway development that would create sustainable local workforce employment models rather than grant-dependent positions.

Arkansas is the proof case for what H.R. 1’s work requirements will produce nationally. The state ran the experiment, the experiment failed, the results were published, and the federal government mandated the experiment anyway. Whether $161 per resident per year can build infrastructure fast enough to compensate for 131,000 coverage losses depends on implementation choices the state has not yet made.