States May Get to Opt Out of Medicaid During Citizenship Checks

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By Victoria Pelham

Hospitals could see a decrease in Medicaid usage and reimbursement under changes the Trump administration wants to make to the health-care safety net.

The White House, in a recent fiscal 2019 budget proposal, suggests scrapping mandatory benefits for people while their immigration status is being verified during “reasonable opportunity” periods. The policy idea would allow states to opt out of the coverage and end federal reimbursement for care provided in that time.

A full rewrite would likely require congressional action, but the Department of Health and Human Services projects it would save the Medicaid program $2.2 billion over the next decade. The push underscores a larger conversation around how the GOP is looking to tighten both the safety net’s scope and immigration restrictions—and could be an indicator of more overhauls to come.

“It’s part of a larger agenda to move immigrants off of welfare or other public benefits,” David Bier, a policy analyst for the libertarian Cato Institute, told Bloomberg Law.

And it’s likely to come to fruition, leading fewer people to seek care and ultimately less payouts from the Medicaid program to providers, he said.

Immigrants on Medicaid

Medicaid covers nearly 8.5 million immigrants, compared with about 62.3 million native-born Americans, according to the 2016 Census Bureau Current Population Survey.

Most become eligible for the benefits after five years of legal residency, though undocumented immigrants are barred from the federal program outside of emergency services. Refugees qualify immediately. Some states including California have their own more lenient provisions extending coverage within the five-year wait time.

State Medicaid programs would be able to choose whether they want to cover medical services during the eligibility verification process under the Trump administration wish list.

The Trump administration could take action via regulations on when in the process eligibility needs to proved, according to Bier. But that would need to be an interpretation of the “reasonable opportunity” period, not a full repeal.

Tanya Broder, a senior staff attorney with the National Immigration Law Center in Oakland, Calif., told Bloomberg Law the change would need congressional action because of the underlying statute. Republican lawmakers in recent years have made failed bids to implement it.

And they’ve also proposed a slew of overhauls to curb Medicaid’s size and spend. The program covers nearly 75 million people at a federal and state price tag of about $550 billion, and congressional Republicans have warned of its long-term sustainability.

The White House’s budget proposal says requiring documentation upfront would ensure eligibility “funded by scarce Federal resources.”

Barriers to Care

But Broder said the proposal is “taking us in the wrong direction.”

She warned that the coverage provision was set up to make sure eligible beneficiaries weren’t hurt by errors and delays in processing, and getting rid of it would make health care harder for the poor, immigrants, newborn children, the homeless, and domestic violence victims who have a harder time accessing documentation.“It’s one more barrier that’s going to delay the provision of essential health care for citizens and immigrants ... and could result in more complicated health conditions or costly emergencies in the longer term,” Broder said.

Medicaid applicants claim immigration status eligibility under penalty of perjury already, she added. This proposal would affect legal citizens and residents who are eligible but have a harder time pulling together paperwork—for example, seniors who weren’t born in a hospital, those fleeing natural disasters like hurricanes, or domestic violence survivors, who often have their records stored manually rather than electronically to protect privacy.

They’d likely then have to delay care, she said.

If it goes forward, the policy would be “exacerbating the disparities between high- and low-income citizens and immigrants,” Broder told Bloomberg Law.

Benefit Limitations

A crackdown on reasonable opportunity periods could mean fewer immigrants seeking care, even if they’re eligible, experts said.

It also could mean repercussions for the health-care industry, which would prefer the guarantee of Medicaid reimbursement to the uncertainty of individual payments for care, Bier said.

But it could also mean “positive benefits for taxpayers,” according to Bier.

The Government Accountability Office has deemed the federal Medicaid program high risk for fraud, waste, and abuse since 2003.

And an August 2017 HHS Office of the Inspector General report found that Kentucky “did not always perform Medicaid eligibility determinations for non-newly eligible beneficiaries in accordance with federal and state requirements.” The audit found that the state didn’t meet standards for eligibility determinations for seven out of a sample of 120 beneficiaries, noting that the sample showed documentation proving electronic or manual citizenship verification to be inconsistent.

The six-month audit found about 8 percent of non-newly eligible beneficiaries may have not qualified for Medicaid, amounting to nearly 70,000 people and about $72.8 million.

A change in coverage during verification could likely also parlay into other overhauls, analysts said, pointing specifically to reports that have circulated that the Trump administration may be looking to change the boundaries of who is considered a “public charge,” which could bar an immigrant from naturalizing and full legal inclusion.

Effects from that and from the larger debate are already being felt among immigrant communities who are afraid to access health-care benefits, Broder said.

She said health-care benefits are an “investment in our community and in our future, and policies that chip away at those services will threaten the health and well-being of all our communities.”

Marielena Hincapié, executive director of the National Immigration Law Center, said in a statement proposals like the “public charge” would “redefine who is ‘worthy’ of being an American, along with what we look like as a country.”“This rule could have the effect of forcing low-income immigrant families—including U.S. citizen children—to make impossible choices between having the resources they need to thrive and reuniting with loved ones,” she said.“If we want our communities to thrive, all families must be able to receive the critical care and services they need,” Hincapié said.

To contact the reporter on this story: Victoria Pelham in Washington at vpelham@bloomberglaw.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bloomberglaw.com

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