Threat of lawsuits over welfare law clouds efforts by states to implement changes in Medicaid
Welfare Lawsuit / Medicaid
Seven weeks after President Clinton signed the new welfare law, the impact on state Medicaid programs and public health systems—particularly in states with large immigrant populations—remains the subject of volatile debate and much confusion.
Expected legal challenges to the law, especially to the restriction on medical services for legal immigrants, are likely to make it even harder to predict the impact because the courts could delay implementation of some provisions of the bill. Advocacy groups for immigrants and the poor reportedly are preparing a flurry of lawsuits over the law, which replaces the Aid to Families With Dependent Children (AFDC) program with a block grant to the states called Temporary Assistance to Needy Families (TANF).
In California, the legal and political picture is clouded further by pending litigation over California’s Proposition 187, a state law that also bans services to immigrants. It would take a "courthouse of lawyers to explain the dynamics and the sequence of events," according to Robert Melton, MD, director of health services for Monterey County.
The California Association of Public Hospitals and Health Systems (CAPH) has estimated that if California exercises its option not to cover 500,000 legal immigrants currently eligible for Medi-Cal, the state’s health-care system could lose as much as $900 million a year in state and federal dollars.
In the future, CAPH estimates about 49,000 new legal immigrants per year, who would have been eligible for Medi-Cal, will be denied coverage under the new mandate. These legal immigrants would seek care at hospital emergency rooms and city and county public health programs, but would receive no state and federal Medicaid dollars, unless for a true emergency. The association projects a cumulative six-year impact of at least $2.7 billion on California’s health-care system.
One of the central legal questions is whether the welfare law unconstitutionally discriminates against a class of people by eliminating Supplemental Security Income (SSI) and food stamps for immigrants and giving states the option of cutting current legal immigrants out of the Medicaid program.
"States clearly do not have the right to discriminate under the Equal Protection Amendment," says Karen Narasaki, executive director of the National Asian Pacific American Legal Consortium, Washington, D.C.
Legal experts say the law also may be challenged as a violation of states’ rights since the federal government is seeking to prohibit states from spending their own money on benefits to undocumented aliens even in violation of state law. New York’s constitution states that the legislature "shall" provide for "care and support of the needy" regardless of whether they are immigrants.
Meanwhile, Medicaid officials and providers in the Medicaid program are grappling with implementing other provisions in the law.
Judith D. Moore, acting director of the Health Care Financing Administration’s Medicaid Bureau, told State Health Watch the agency is using three guiding principles during this confusing period of interpreting and implementing a complex new federal law:
• maintain eligibility of the Medicaid population as much as possible;
• provide as much flexibility to the states as possible; and
• strive for simplifying Medicaid
eligibility.
Here are some major issues state and federal health officials are facing:
Loss of SSI by elderly and disabled immigrants. Of the 785,000 elderly and disabled legal immigrants currently receiving SSI, approximately 500,000 will lose eligibility under the new law. State and federal officials are concerned about finding ways to maintain Medicaid eligibility for this group since they will no longer qualify through SSI. Some may be able to qualify through medically needy programs, which exist in about two-thirds of states.
The Immigration Naturalization Service (INS) will be sending notices to immigrants on SSI, explaining that they will lose benefits unless they naturalize to U.S. citizenship. For those with physical or mental impairments who may not be able to meet the naturalization examination requirements, a proposed rule from the INS allows individuals to obtain exemptions from these requirements. The proposed rule spells out the standards
examiners are to use in determining whether applicants are eligible for the exemptions.
The CAPH believes that states may have some latitude in implementing the bar on services to aliens. For example, "a state may be able to choose to cover only long-term care services for elderly aliens already here," a CAPH analysis says.
New definitions of disability for SSI for children. An immediate concern for state Medicaid directors are the tighter restrictions on SSI eligibility for disabled children. The criteria will use a medical definition rather than a functional definition, which is expected to disqualify an estimated 300,000 children.
Ms. Moore says HCFA believes that about 80% of children who lose SSI because of the new definition of disability "will be picked up under other categories." Many will be covered under the current expansion of Medicaid coverage to children. Currently, children through the age of 13 with household incomes under the poverty level are covered and children up to the age of 18 will be covered by 2002. Ms. Moore says HCFA will encourage states "to make every attempt to do [Medicaid eligibility determinations] in an expeditious way."
Delinking of Medicaid and welfare. According to Cindy Mann, of the Center on Budget Policy and Priorities, Congress’ intent in de-linking the programs was to protect Medicaid eligibility for those who lose cash welfare, either because they do not qualify, they reach the 60-month limit on benefits, or they are sanctioned. If a teenage mother, for instance, does not live with an adult or continue her schooling, under new requirements of the law, she would lose her welfare payments but not her Medicaid.
Ms. Moore says HCFA is "very concerned" about the delinking of the two programs, because it will be harder to reach Medicaid-eligibles. Many Medicaid recipients get into the program by qualifying for the now defunct Aid to Families With Dependent Children (AFDC) program. Ms. Moore says HCFA will "encourage, cajole and hope states will take positive steps to maintain eligibility" of children, women and others who qualify for Medicaid.
Using a single application process is considered the most effective antidote to this problem and will be possible for states that do not make major changes in their welfare standards. Texas and Michigan, have already indicated that they plan to keep the standards for the two programs consistent. Jack Tweedie, welfare policy specialist for the National Conference of State Legislatures, says that so far, "states that have submitted plans (to the Department of Health and Human Services) do not seem to be changing eligibility standards for cash welfare very much." However, states that do make changes should strive to keep their eligibility standards as simple as possible, officials say.
In general, more outreach efforts will be needed, according to Ms. Mann. Medicaid applications should be made readily available in the community. Health centers and hospitals should get involved in enrolling eligibles into the program, as should child care centers, head start agencies and schools. The Center on Budget Policy and Priorities has a research project called "Start Healthy, Stay Healthy," which links early childhood centers with Medicaid agencies.
While there are concerns about the loss of Medicaid enrollment, Ms. Mann pointed out during a program sponsored by the Center for Law and Social Policy that changes in the welfare law will also make it possible for states to expand their Medicaid populations.
Distribution of administrative funds to states. An additional $500 million is being allocated to the states to defray administrative expenses as a result of the welfare law. The problem is developing a formula for how to distribute this money among the states. Ms. Moore says HCFA is now taking input on developing a formula and will publish a notice in the Federal Register.
Contact the CAPH at 510-649-7650; the Center for Law and Social Policy at 202-328-5140; or Mr. Tweedie at 303-830-2200.
Threat of lawsuits over welfare law clouds efforts by states to implement changes in Medicaid
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