More Problems with Medicaid Expansion | Citizens Against Government Waste

More Problems with Medicaid Expansion

The WasteWatcher

Under the Affordable Care Act (ACA), better known as Obamacare, the eligibility for Medicaid program was expanded to nearly all Americans under the age of 65 that are effectively at or below 138 percent of the federal poverty level (approximately $32,913 for a family of four.)  Prior to Obamacare, Medicaid eligibility was for these mandatory classes: children, pregnant women, very-low income parents, seniors, the blind, and the disabled.  Eligibility for these six classes varies by income.  (States do have some flexibility in designing and expanding the program.)

States can now voluntary decide to expand their Medicaid program; 25 states and the District of Columbia have done so to date.  The federal government will pay 100 percent of the cost of expansion until 2016, then decrease that percentage until it reaches the permanent level of 90 percent in 2020.

CAGW’s prior concerns about Medicaid expansion include Medicaid Expansion: A Wolf in Sheep’s Clothing and Disturbing News on Medicaid in Oregon.  Medicaid is the gift that keeps on giving when it comes to demonstrating how badly government-controlled healthcare, including Obamacare, operates. 

A December 9, 2013 USA Today article describes how the federal exchange, HealthCare.gov, was incorrectly signing up people for Medicaid even though they were not eligible for the program.  Once in Medicaid, they became ineligible for premium subsidies that would have otherwise been available to them to purchase private insurance through an Obamacare exchange.  The only way they could get un-enrolled from Medicaid was to file an appeal with the Department of Health and Human Services (HHS).  Because of the time constraints, it is highly unlikely that most of those people were able to get un-enrolled from Medicaid and enrolled in a private plan by the December 23 deadline in order to be covered on January 1.  And HHS had not revealed how many people are still trying to get the problem corrected in time for the March 31 open-enrollment deadline.

USA Today explained, “When consumers applying for insurance put their income information into subsidy calculators on HealthCare.gov, the exchange handling insurance sales for 36 states, it tells them how much financial assistance they qualify for or that they are eligible for Medicaid.  If it's the latter, consumers aren't able to obtain subsidies toward the insurance, although they could buy full-priced plans.”

According to insurance brokers who were interviewed for the article, their clients are in “insurance limbo as they wait for the error to be corrected by HHS or their states so they can reapply.”

Being stuck in Obamacare purgatory is not pleasant; it’s downright aggravating and stressful.  The article cites the following story:

Jacob Hawkins of Plano, Texas, makes about $50,000 a year as a self-employed pool builder, yet his family of three was deemed eligible for Medicaid.  His wife, Holly, is due to have their second child in February and is worried she won't have insurance in time.  She filed an appeal of the Medicaid determination, but doubts it will be approved before the Dec. 23 deadline.  I'm frustrated, mad and there's no one to help, says Hawkins.

It is well-known that the backend of the HealthCare.gov website has not been functioning correctly since its October 1 rollout.  In fact, 40 percent of the website wasn’t built on “opening day.”  The website often sends incorrect enrollment and financial information to insurance companies and the states; four-and-a-half months later, HHS has not solved the problem.  The Medicaid quirk appears to be its own special issue and there are no good numbers on how many have fallen into the quandary but it’s big enough to be a problem.

National Association of Health Underwriters (NAHU) Senior Vice President of Government Affairs Jessica Waltman told CAGW that HHS is very much aware of the Medicaid enrollment problem.  She told USA Today, "I have heard on multiple occasions from brokers in various states over the past eight weeks that they have had wacky Medicaid determinations with people who clearly make way too much money for Medicaid.”

Certified insurance agents and brokers are the experts when it comes to dealing with insurance policies, types of available coverage, and regulations and have met the necessary privacy requirements.  They would like to help with enrollment in Obamacare and prevent mistakes before they occur, but technical barriers and HHS rules, such as the consumer must be in the presence of the agent to enroll, are cumbersome at best.  The NAHU wrote a letter to President Obama that offered many suggestions on how to improve the entire process.  For now, however, the only way to fix the Medicaid enrollment problem is to try to work through the broken bureaucracy appeals process.

As of February 4, the only figure available on the appeal process is that 22,000 requests have been submitted by snail mail for all enrollment problems, with none solved.  Furthermore, no computer and phone systems have been designed or launched to address the faulty enrollments.  Instead, the Centers for Medicare and Medicaid Services (CMS) is reaching out to people that had experienced errors during the sign-up process.

If this isn’t absurd enough, Obamacare is splitting up families, forcing them to utilize both private insurance and Medicaid.  According to a January 27, 2014 Associated Press (AP) article, “families shopping for health insurance through the new federal marketplace are running into trouble getting everyone covered when children are eligible for Medicaid but their parents are not.  Children who qualify for Medicaid, the safety-net program for the poor and disabled, can’t be included on subsidized family plans purchased through the federal marketplace, a fact that is taking many parents by surprise and leaving some kids stuck without coverage.”

The AP story goes on to describe how in New Hampshire some parents enrolled themselves into a private plan because they were told their children were eligible for Medicaid, which can be free to them.  They later found out the children were not eligible for the program and now the children cannot be included in the family plan, leaving them un-insured.   Maria Proulx of Anthem Blue Cross and Blue Shield of New Hampshire said, “The children are getting stuck in this spot where we’ve enrolled the parent, but we can’t bring the children back on the family plan.”

Another example is a California father who was assured by officials in Covered California, the state’s exchange, that his children could be included in the private plan he picked for his wife and himself.  Later, he got notices from both Covered California and Medi-Cal, the state’s Medicaid program, and discovered his children were on Medicaid while he and his wife are in private subsidized insurance.  When he contacted Covered California, he was told that the previous information given to him was wrong and the children had to be enrolled in Medicaid.  Unfortunately, the physicians his children have seen from birth do not take Medicaid.  He is now spending lots of time on the phone and dealing with the website to see if he can enroll everyone in an unsubsidized plan through Covered California.

Another issue popping up, as reported in the January 23 Washington Post, is that people are trying to avoid Medicaid altogether, even though they may qualify for the program.  They want nothing to do with it because they fear their estates could be seized by their state.

The article cited a 1993 law mandating that states try to recover money from people’s estates that had utilized the program’s long-term care coverage.  They also allowed states to go after the estates of people over the age of 55 that used Medicaid for routine healthcare. 

When the law was passed, having health insurance was voluntary.  Now, as people apply for health insurance through HealthCare.gov, they may find they qualify for the expanded Medicaid option.  If so, they are not eligible to purchase private insurance with a tax subsidy through the exchange.  As a result, they are concerned about assets they have and could lose.  The Post described a 54 year-old woman and former lawyer from New York who is currently unemployed but looking for a job.  While Medicaid would provide her free insurance coverage in the meantime, she will not sign up because she owns an $850,000 apartment she hopes to give to a family member upon her death.   She says, “I don’t want my assets to be raided after my death.  The idea that someone can come after my house after I die…I just can’t do it.”

The Post reported that many states take different approaches to estate recovery, particularly with poor people whose only asset may be the family farm.  Oregon, which had targeted estates between July 2011 and June 2013 and recovered $41 million from about 8,900 people, changed their estate recovery rule last year.  Now estate recovery will only apply to those individuals who are using Medicaid for long-term care as opposed to health insurance.

CMS officials say they realize there is a problem and plan to issue guidance soon to the states regarding asset recovery for people who utilize Medicaid expansion only for health insurance.

While many proponents of Medicaid say there is nothing to worry about and a state will not seize the assets of people who enroll in the program, there is a lack of trust.  Too many people remember the promise, “If you like your health plan, you can keep it.  Period.”

But wait, there’s more!  The Washington Post’s blog “Fact Checker” declared that the Medicaid enrollment number of 3.2 million being touted in news reports “tells you almost nothing about how the Affordable Care Act is affecting Medicaid enrollment.  Reporters need to stop using it.”

There have been a lot of statistics about Obamacare enrollment issued by Organizing for Action, the president’s former campaign organization turned advocacy group, claiming “6 million Americans have gotten covered.”  The Post blog stated the 6 million number comes from combining the 2.1 million of people who have selected a private healthcare plan through an exchange and the 3.9 million from a CMS report on the number of people who have been found to be eligible for Medicaid.  But looking more closely at the CMS figure, one sees that the qualifier is “total individuals determined eligible for Medicaid and CHIP by state agencies (includes those newly eligible under the Affordable Care Act and those eligible under prior law.)”

While the Post goes into some detail about teasing out numbers and gives credit to Sean Trende at Real Clear Politics, who had earlier called out CMS on the figures, the bottom line is that no one knows at this time how many people who had previously been uninsured joined Medicaid due to its expansion under the Affordable Care Act.  People sign up for Medicaid all the time, and new enrollees could be people who were always eligible for Medicaid but never bothered to utilize it until after all the Affordable Care Act hoopla.  Furthermore, it will not be known until after March 31 how many people have taken advantage of Medicaid expansion.  That is when the states will begin to send their enrollment information to CMS because they want their 100 percent reimbursement.  This amount would only be given to cover the individuals in the expanded portion of Medicaid.

The Post ended up giving Three Pinocchios to everyone who used the 3.9 million number incorrectly and without due diligence.

Eventually, all the Obamacare enrollment numbers will be sorted out.  For example, the January 17, 2014 Wall Street Journal cited a survey that only “11 percent of consumers who bought new coverage under the law were previously uninsured.”  If the percentage holds, that’s a pretty low return on investment considering the billions of dollars the nation has spent and the frightful churn Obamacare has caused to one-sixth of our economy in what will end up being a futile and wasteful effort to get the nation’s uninsured covered.