Counties Debate Effects of Medicaid Citizenship Law

In a classic example of trickle-down politics, county governments all over the country are retooling to get ready for new, tighter eligibility rules for federally funded health care for the poor. The federal government, hoping to save money by weeding undocumented immigrants out of the Medicaid system, delivered new regulations to states this month and state governments, in turn, handed the issue to counties.

In California, county health agencies are scrambling to meet an Aug.1 deadline to enact new Medi-Cal rules which call for stricter, in-person verification of citizenship before granting benefits. The federal government’s final document spelling out considerable minutiae in the sweeping new regulations was delivered July 7, leaving three weeks for states and counties to figure out how to put it all into practice.

“It’s quite the moving target,” said Frances Culp, senior health program planner who is tracking and interpreting the new legislation for San Francisco County. “We’re still not sure how a lot of things are going to play out, but I think it’s pretty clear that these new rules will have a lot of ripples. We’re not sure where they’ll go and how big they’ll be, but we know there will be some.”

Proponents say the new rules will save millions of dollars by eliminating undocumented immigrants from the system. Health officials predict costs will shift but they won’t go away.

The Congressional Budget Office estimates 30,000 to 35,000 people nationwide are falsely claiming citizenship to receive Medicaid benefits. California, with about 10% of the nation’s population, has at least 10% of that estimate. The numbers could very well be higher in California, which has a disproportionate share of immigrants. For argument’s sake and easy mathematics, let’s estimate 4,000 individuals falsely claiming citizenship among California’s 6.7 million Medi-Cal beneficiaries.

In California, Medi-Cal is a 50-50 deal between federal and state governments. (The ratio differs from state to state.) Using the industry standard of $2,000 a head per year in total expenses for Medicaid recipients, the federal government stands to save about $4 million a year in California by not paying its half of the deal for those 4,000 undocumented Medi-Cal recipients, about $1,000 per head.

If the state also refused to pay its half of the deal, it would mean another $4 million saved, bringing the total savings in California to about $8 million. But most health officials agree, such savings are unlikely.

Not only will state and county governments have to make new expenditures implementing the new regulations, they will no longer get federal help covering health care costs for a certain portion of the state’s poor population. Neither the people nor the cost of their health care will go away because of the new federal regulations, most health experts predict. Instead, when a sick or injured uninsured noncitizen ends up in emergency care or a hospital room, state and county governments will have to pay the tab alone.

Questions Remain for County Officials, Advocates

“These new regulations have the potential to cause a huge cost shift and we’re worried that public hospitals and public clinics may have to bear even bigger burdens than they already do,” said Judith Reigel, executive officer of the County Health Executives Association of California. “All the safety nets already face extreme challenges, and this adds yet another.”

Approved as part of the Deficit Reduction Act by President Bush in February, the new regulations require Medi-Cal recipients to show an original birth certificate, passport, driver’s license or other documentation to prove citizenship.

“Because the new rules say eligibility workers must physically see original documentation, we expect we’re going to have to change a lot of the ways we do things,” said Eileen Kelly, division chief in charge of Medi-Cal for Los Angeles County Department of Public Social Services. At the state’s urging, most counties in California have tried to streamline the Medi-Cal process by relying on mail, but that may not work much longer.

“I don’t think too many people are going to want to mail an original birth certificate or their driver’s license,” Kelly said. “For current beneficiaries, there is a grace period, and it doesn’t become an issue until it’s time for their annual redetermination,” Kelly said. “But for new applicants, there’s no time and it starts Aug. 1.”

For Los Angeles County, which handles the paperwork for about 1.5 million Medi-Cal beneficiaries, the changes will be significant. In an average month, Los Angeles processes 28,000 new Medi-Cal applications, Kelly said. In March, the most recent month for which data is available, Los Angeles County handled 1.4 million Medi-Cal beneficiaries — 920,000 of them citizens, 408,000 of them documented immigrants and about 54,000 undocumented.

“We really don’t have a handle on what the impacts of these new rules will be but there will definitely be some,” Kelly said.

Some state and county officials are pinning hopes on the recently passed budget, as well as on AB 1807, a budget trailer bill that includes funding provisions that might allow for more Medi-Cal expenses in some circumstances.

“There’s still a lot of uncertainty, but there is hope that there might be money in the budget to handle some of the impacts,” said Bruce Wagstaff, director of the Sacramento County Department of Human Assistance. Sacramento County has about 55,000 residents receiving Medi-Cal benefits.

The new rules won’t mean undocumented immigrants won’t get medical treatment. The new legislation does not alter federal law requiring hospitals to provide emergency care for all, regardless of citizenship documentation, insurance status or income. Although the funding mechanism may change, most health officials agree all sick and injured people and pregnant women will continue to receive emergency medical treatment in this country.

“I sure hope that’s the case,” said Cathy Senderling, senior legislative advocate for the County Welfare Directors Association of California. “There are definitely some concerns about whether these new rules will cause some people to stay away from preventive care, and that can give rise to a whole other set of problems,” Senderling said.

Some Looking to Exceptions

State and county health officials are pleased the final federal guidelines make allowances for certain Medi-Cal subpopulations that could have been adversely affected by the new regulations. Some Medi-Cal beneficiaries, such as women eligible for emergency care after delivering an infant, will not be required to provide documentation. The final guidelines also say people who are making a “good faith effort” to prove their citizenship would not lose coverage.

In what many say was federal officials’ biggest concession, the final guidelines exempt about 8 million elderly and disabled people who are enrolled in Medicare or receiving Supplemental Security Income through Social Security.

Consumer and patient advocates “welcomed” the exemptions but said the new regulations still threaten to force millions of people into the ranks of the uninsured.

“The new requirements still are likely to force significant numbers of U.S. citizens who are fully eligible for Medicaid — primarily poor children and parents — to go without health care because they are waiting for paperwork from a government bureaucracy or are unable to get the paperwork,” said Robert Greenstein, executive director of the Center on Budget and Policy Priorities.

Ron Pollack executive director of Families USA, estimates 40 million low-income people are at risk of losing Medicaid coverage.

Families USA is helping plaintiffs who filed a class-action lawsuit in Chicago allege the new federal regulations are unconstitutional.

Federal officials amended the rules in response to critics who predicted poor seniors would be among the hardest pressed to document citizenship.

“That was a big step for the federal government, and we’re grateful,” said Kelly from Los Angeles. “But there are still plenty of questions. What’s going to happen to kids in foster homes who have no documentation? What’s going to happen to seniors in long-term care who aren’t getting SSI and who may never have had a birth certificate? What’s going to happen to homeless people?”

It may take months or even a full year to fully assess the impacts of the new regulations, state health officials said.

“I think we’ll see emergency care rise because of this,” said Reigel of the County Health Executives Association. “I think nursing homes, public hospitals, clinics will all be affected but nobody knows how much.

“There are still a lot more questions than answers,” Reigel said.

Related Topics

Health Care Costs Insight Insurance Medi-Cal