States Told to Review Medicaid Eligibility

In a move that could return hundreds of thousands of people to Medicaid, states were ordered Friday to determine whether they improperly cut poor families from the program and, if so, to sign them back up.

The Health Care Financing Administration, which runs Medicaid, told states in a letter to identify families that lost Medicaid coverage when they got off welfare and take “action to reinstate coverage . . . as quickly as possible.”

The move--the strongest step yet taken--is an acknowledgment on the part of the federal government that many people have been improperly kept off Medicaid.

“We’re asking states to review their own records--and to be sure that no one who was entitled to keep Medicaid after leaving cash assistance lost out,” Department of Health and Human Services Secretary Donna Shalala said at a children’s health insurance conference.

States were also ordered to reinstate disabled children who were required to get Medicaid, but didn’t, after they lost their Supplemental Social Security benefits. Experts estimate that at least 100,000 children were eligible for coverage.

Shalala said the federal government will help states pay administrative expenses and will match any state dollars used to reimburse families for medical bills that would have been covered by Medicaid during the time they were terminated.

States are not required to reimburse families for those bills, however.

People who left welfare after tough new eligibility rules took effect lost their Medicaid coverage for a variety of reasons: States didn’t tell people that they were still eligible for Medicaid, caseworkers discouraged families applying for Medicaid, and computer systems that linked welfare coverage and Medicaid erased people’s records when they got off the rolls.

Some states have begun identifying people who should have been allowed to keep Medicaid coverage. Frank Lopez, spokesman for the Arizona Medicaid program, said his department has just started a program to reinstate families that were kicked off because caseworkers didn’t tell them that they could still be covered even if they were no longer on welfare.

“We all should have done a better job of informing people,” Lopez said.

Medicaid enrollment dropped about 200,000 to 41.4 million in 1998, the last year for which figures are available. About 200,000 children were dropped, but 300,000 women and 400,000 disabled adults were added, according to HHS.

The federal-state program, which provides health benefits for low-income Americans, cost an estimated $181 billion last year. The federal government’s share was $103 billion.

HHS officials could not provide estimates of how many people have been improperly kicked off Medicaid. But studies suggest that hundreds of thousands of people lost Medicaid coverage as they left welfare.

A 1999 study by Families USA, a consumer advocacy group that lobbies for universal health coverage, estimated that 675,000 people lost Medicaid coverage in 1997 and had no health insurance because of the improper cutoffs.