Pressure to Reimburse Medi-Cal Ended

A program created in 1994 by former Gov. Pete Wilson that pressed immigrants for repayment of state health insurance benefits under the threat of deportation has been discontinued after a state audit cited widespread abuses and questioned its legality.

The Wilson administration initiative, which helped inspire smaller-scale efforts in Florida, Texas and other states, stationed state fraud investigators at airports in Los Angeles and San Francisco, as well as at U.S.-Mexico border crossings. Working with Immigration and Naturalization Service agents, the state officers questioned an average of more than 13,000 travelers a month, mostly Latinas, about past receipt of benefits, particularly for childbirth. California investigators were principally seeking evidence of illegal receipt of Medi-Cal--the state’s version of Medicaid, the joint federal-state health insurance plan for the poor.

But many legal immigrants say that they were threatened with expulsion if they did not agree to reimburse California--even though they or their children were entitled to the benefits.

“I was told they would deport me if I did not pay back Medi-Cal,” said Sandra Flores of Los Angeles, mother of two U.S.-born daughters, who repaid a $6,632 hospital delivery bill.

INS agents at borders and airports, using profiles developed by California officials, would direct travelers to nearby offices where state fraud investigators were waiting to interview them. Most of those investigated were Latinas with children, the audit found.

State investigators had computers to verify whether the travelers had ever received state aid.

The program had continued despite a federal directive more than a year ago saying that the practice was an invasion of privacy and probably illegal without some evidence of benefits fraud.

The Wilson administration had pushed the initiative as a means of reducing fraud. Sean Walsh, former spokesman for Gov. Wilson, said the decision to scrap the effort is “sending a message that we welcome those who come to this country illegally and seek public benefits.”

Problems with administration of the program, he said, could have been corrected.

State auditors found that children were eligible to receive a variety of public assistance benefits, including Medi-Cal, in 72% of the cases examined.

Gov. Gray Davis ended the program with little notice last month, following recommendations by the Bureau of State Audits that cited poor administration, numerous abuses and limited cost-effectiveness.

Among the most serious problems, according to the audit, was investigators’ practice of suggesting to arriving travelers that their immigration status would be jeopardized unless they repaid the government.

State investigators typically told people they could “clear their names” by repaying the department for past Medi-Cal benefits, the audit said. In one case, a recipient was told to repay $33,000, even though the person had received only $3,200 worth of benefits.

The audit also found that state investigators attempted to influence INS decisions over who was eligible to enter and remain in the United States. INS officials eventually complained about state intrusion into federal immigration decisions, the audit noted.

Faced with several federal lawsuits over the policy, California has already agreed to return almost $4 million to thousands of immigrants who say they were coerced into paying.

The 16 state workers assigned to the program have been transferred to other anti-fraud initiatives, said Walter Barnes, deputy director for audits and investigations for the California Department of Health Services.

While applauding the decision to end the program, health professionals cite the program’s ominous legacy: Thousands of immigrants are now afraid to apply for Medi-Cal and other public health programs to which they are legally entitled.

This chilling effect, health professionals say, has swelled the rolls of the uninsured and could result in more dangerous and costly emergency room visits, as well as the spread of untreated disease.

Many noncitizens now worry that receiving public benefits could subject them or their children to deportation, spoil their chances for permanent residence status, or make them ineligible to sponsor relatives who wish to emigrate legally. U.S. immigration law has long barred prospective immigrants who are likely to be a drain on public resources.

“Women in the eighth month of pregnancy with incredibly risky pregnancies are not applying for Medi-Cal because it might affect their status,” said Lynn Kersey, executive director of Maternal and Child Health Access, a nonprofit group.

Many of those affected are children born in the United States, who are entitled to public assistance but whose immigrant parents refuse the help out of fear.

“Immigrants are looking for some reassurance that they’re not creating more problems for themselves by getting their kids insurance,” said Doug Porter, chief of Medi-Cal programs in California.

Davis’ decision to end the initiative is an example of the state’s new era of more immigrant-friendly politics. The governor last month signaled his intention to mediate an end to the protracted legal battle surrounding Proposition 187, the 1994 ballot initiative that sought to deny illegal immigrants such public services as education and medical care.

In addition, state officials have joined immigrant advocates in calling for the INS to ignore whether prospective immigrants have received health care benefits in the past when deciding admissions. The INS is now reexamining the policy.

Activists seeking to slow the number of new immigrants worry that the changes could allow for fraud. Federal investigators have found some foreign visitors, including wealthy tourists, who billed the government for costly surgery.

“If there’s fraud, there certainly should be prosecution and the American people should be reimbursed for benefits received under false pretenses,” said Ira Mehlman, West Coast representative for the Federation for American Immigration Reform.

Sandra Flores, 27, a legal immigrant from Guatemala, says that she was never accused of any wrongdoing.

Upon returning from a 1997 trip to Guatemala, she was quizzed by an INS inspector at Los Angeles International Airport about past health care benefits. She acknowledged that Medi-Cal paid for the delivery of her daughters, Wendy, 8, and Marla, 4. Flores, who is a legal permanent resident, is entitled to the benefits.

Even so, Flores said, the INS agent at the airport told her: “You’ll have to pay it back.”

Two months later, the California Department of Health Services sent a letter to Flores, noting that she had received $6,632 in Medi-Cal benefits for the birth of her two daughters. The letter noted that it was not a debt or a demand for repayment. But Flores said it was made clear to her, by a state investigator and the INS, that she would be deported if she did not pay. She and her husband, a hotel worker, borrowed the money.

“I worried about what would happen to my children if I was deported,” said Flores, who lives with her husband and two children in a one-bedroom apartment in Hollywood. Moreover, Flores said, she was told to discontinue Medi-Cal coverage for her children. Even now, Flores said, her family remains uninsured.

“Not having insurance is a constant source of worry for us,” Flores said. “I just have to pray that my children don’t get seriously ill.”