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Congressional Testimony
May 16, 2000, Tuesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 5707 words
HEADLINE:
TESTIMONY May 16, 2000 CINDY MANN DIRECTOR HCFA CENTER FOR MEDICAID AND STATE
OPERATIONS HOUSE WAYS AND MEANS HUMAN RESOURCES HEALTH CARE FOR
THESE MOVING OFF WELFARE
BODY:
May 16, 2000 CINDY
MANN, DIRECTOR FAMILY AND CHILDREN'S HEALTH PROGRAMS HCFA
CENTER FOR MEDICAID & STATE OPERATIONS on HEALTH COVERAGE
FOR FAMILIES LEAVING WELFARE before the HOUSE WAYS & MEANS SUBCOMMITTEE ON
HUMAN RESOURCES Chairman Johnson, Congressman Cardin, distinguished Subcommittee
members, thank you for inviting me to discuss the impact of welfare reform on
Medicaid. President Clinton has continued to stress the importance of ensuring
that everyone who is eligible for Medicaid is enrolled, and we greatly
appreciate this opportunity to discuss our actions and concerns. The historic
welfare reform law, along with the new State Children's Health
Insurance Program created in 1997, has enabled States to greatly expand
health care coverage eligibility and help more low-income
people make the transition from welfare to work. It broke the link between cash
assistance programs and eligibility for Medicaid. It also explicitly guaranteed
that children and families who would have qualified for Medicaid through receipt
of cash assistance would continue to be eligible for Medicaid. Overall national
statistics on Medicaid enrollment are encouraging, but there is variation among
States. The most recent statistics from all States show that total Medicaid
enrollment is about the same now as it was before welfare reform. However, we
know that many eligible families are not enrolled; and we share your concern
about instances in which State practices have resulted in eligible individuals
losing health care coverage. We have taken a series of actions
to ensure that States comply with the welfare reform law and address its impact
on Medicaid enrollment. Most recently, we instructed all States to review
Medicaid terminations and re-enroll improperly terminated individuals. We also
asked States to ensure that their computer systems and eligibility processes
have been modified so that families eligible for Medicaid do not inappropriately
lose coverage when their eligibility for cash assistance ends. Last year we
worked with Congress to ensure the continued availability of the $500 million
fund created to help States afford needed changes. The President, in addition to
aggressively promoting SCHIP outreach efforts, has proposed several additional
steps to further expand health care coverage among low-income
families and strengthen programs that provide health care for
the uninsured. And we are committed to continuing to work with
States to ensure that no eligible individuals are denied Medicaid coverage.
BACKGROUND Congress and the President together kept the pledge to "end welfare
as we know it" through the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996. This historic law broke the link that made families
automatically eligible for Medicaid if they received cash assistance through the
Aid to Families with Dependent Children program, which was replaced with the
Temporary Assistance for Needy Families (TANF) program The link was broken
because we all knew that welfare programs were changing, and neither Congress
nor the Administration wanted those changes to result in the loss of
health care coverage. At the insistence of the President,
Chairman Johnson of this Subcommittee, and many other members of Congress, great
care was taken to assure that Federal law continued to guarantee Medicaid
eligibility for children and families who formerly qualified for Medicaid
through receipt of cash assistance. Health care coverage can be
critical in helping people make the transition from welfare to work and keeping
them healthy so that they can work. This is especially important in entry-level
jobs that may not provide employer-based health insurance.
Thus, the welfare reform law requires that States must still provide Medicaid to
all people who would be eligible for welfare under the State's Aid to Families
with Dependent Children plan that was in effect on July 16, 1996, prior to the
enactment of the welfare reform legislation. They also must provide Medicaid to
children who lost Supplemental Security Income cash assistance when disability
rules changed, as well as other statutorily defined groups, including low-income
elderly and disabled people. The 1996 law also gave States new options for
providing Medicaid coverage to low-income working families. This was followed by
a regulation issued by HCFA in 1998 allowing States to cover parents in
two-parent families. The Balanced Budget Act of 1997 (BBA) built upon the
welfare law changes and created the State Children's Health
Insurance Program (SCHIP), which gives States wide flexibility in providing
health care coverage to children in families that earn too much
to qualify for Medicaid but not enough to purchase private sector insurance. The
BBA also gave States two new Medicaid options -- presumptive eligibility for
children and 12-month continuous eligibility -- to improve coverage among poor
families. These changes have created important opportunities for States to
provide health care coverage to low-income families as they
move off welfare and into the workforce. States have responded with eligibility
expansions, simplified enrollment procedures, and creative outreach campaigns.
The result is that millions more low-income children and parents are now
eligible for coverage through Medicaid or the new SCHIP program. Meeting
Challenges The delinking of welfare and Medicaid has created challenges and
opportunities in ensuring that those who are eligible for Medicaid coverage get
and retain it. Acknowledging the new administrative burden on States that might
result from delinking, the welfare reform law included $500 million for enhanced
matching funds to help States cover the increased costs, such as outreach,
associated with delinking welfare and Medicaid. Since enactment of welfare
reform, we have worked with States and others to undertake substantial efforts
to improve Medicaid outreach and increase the participation o f eligible
children and families. Consistent national data on Medicaid and SCHIP coverage
for families leaving welfare does not yet exist, although this will continue to
be an important area of research being funded by the Department of
Health and Human Services (HHS). The most recent statistics
show that, overall, total Medicaid enrollment has fluctuated only slightly,
dropping in 1997, rising in 1998, and is now about the same -- 41.4 million --
as it was before welfare reform. Among low-income adults and children
nationally, Medicaid enrollment declined slightly by about 2.1 percent (620,000
individuals) during the three-year period from 1995 to 1998. Among children, it
peaked at 20.5 million in 1996, then remained relatively level in the following
two years at 20.1 million in 1998 for a total enrollment drop of 1.3 percent
(270,000). HHS-funded studies show significant state-to-state variation in
enrollment trends, with Medicaid enrollment rates for adults ranging from 24 to
76 percent three months after leaving cash assistance, and enrollment dropping
further by as much as 10 to 20 percent in the year after leaving. Improvements
in the economy, such as that we have enjoyed for the past six years, contribute
to rising incomes and falling welfare and Medicaid caseloads. It is also
important to note that overall, the number of people under the poverty level who
are uninsured has not increased since 1996 and the poverty rate
has declined. One particularly encouraging finding is that the number of
non-disabled adults enrolled in Medicaid (primarily parents and pregnant women
requiring TANF benefits) actually increased in 1998. And, at the same time, more
than 2 million children are now enrolled in SCHIP. As Marilyn Ellwood notes in
her testimony, people losing Medicaid when leaving cash assistance has always
been an issue, even before the passage of welfare reform. Other research, dating
back to the 1980s, has shown that people who leave welfare often return to the
cash assistance rolls. This "cycling" pattern of cash assistance usage has also
contributed to periodic losses of Medicaid coverage, both for the adults and for
their children. In this context, Ellwood's finding that in 1995 between 49
percent and 65 percent of adults who left cash assistance were not enrolled in
Medicaid after six months is not surprising, even if it is disappointing. In the
five states she studied, the turnover rate for adults ranged between 26 and 40
percent. Breaking Medicaid's link with cash assistance, along with the guarantee
of Medicaid for certain families with children regardless of cash assistance
status and Medicaid expansions, should help to reduce cycling on and off
Medicaid. This will help allow Medicaid to operate more effectively as a
health insurance program. By and large, thanks to Transitional
Medical Assistance, the 1996 eligibility guarantee, and recent eligibility
expansions, people leaving cash assistance are eligible for Medicaid. Our
challenge now is to ensure that the law is implemented properly and that
Medicaid 6ligibility is based on a family's income and assets, and not on their
status as welfare recipients. Working with States As mentioned above, there is
wide variation among States in enrollment trends. Some States have done an
excellent job of maintaining Medicaid coverage for individuals leaving cash
assistance rolls. Other States have done an excellent job of outreach to
individuals eligible for Medicaid or' SCI-HP. But in other States, there have
been problems that we are working hard to address. We are greatly concerned
about instances in which administrative inaction or improper procedures by
States have resulted in eligible individuals being denied access to Medicaid, or
in their losing Medicaid coverage or Transitional Medical Assistance that they
are guaranteed by law. For example: Some public assistance staff failed to
inform individuals applying for cash assistance and Medicaid that they could be
eligible for Medicaid even if they did not want to pursue or were not eligible
for cash assistance under TANF; Some States have used joint application forms
for both cash assistance and Medicaid and improperly denied
health care coverage to individuals who were eligible for
Medicaid but not eligible for cash assistance; and Computer systems in some
States improperly removed individuals from Medicaid rolls when closing their
cash assistance cases. We have taken and are continuing to take several steps to
help States adjust to the changes and address specific situations in which
eligible individuals were denied Medicaid coverage. And we are working with
States to find new ways to reach children and families outside, as well as
through, the welfare system. Our efforts to help States address these types of
concerns began shortly after the welfare reform law was enacted. In 1997 and
1998, we sent a series of letters to States that provided guidance on how to
comply with the new rules and ensure health care coverage for
those eligible for Medicaid. We also revised our Medicaid manual for States to
update guidance on the new law. In June 1998 we sent a letter specifically
reminding States of the new rules. Since TANF agencies often administer
eligibility determinations for the Medicaid program, we wrote this letter with
the Administration for Children and Families and sent it to both TANF and
Medicaid agencies. In February 1999, we and the National Governors' Association
launched the Insure Kids Now campaign, with a national toll-free number,
1-877-KIDS NOW, that links callers to their own State SCRIP and Medicaid
programs, and a www.insurekidsnow.gov web site. In March 1999, we and the
Administration for Children and Families issued a 28-page Supporting Families in
Transition guidebook for States with information on getting and keeping people
enrolled in Medicaid when they are leaving or are diverted from welfare. Last
August, we began conducting site visits to all 50 States to review Medicaid
enrollment policies and systems. We are sharing results with States to help them
identify best practices and resolve any identified problems. Last Fall, we
worked with Congress to lift the expiration date for States to spend the $500
million set aside to help them change systems and conduct outreach to address
concerns related to delinking of Medicaid and welfare, and in January we sent a
letter urging States to take advantage of this extension. Last December, HHS
published proposed regulations that would take Medicaid and SCHIP enrollment
figures into consideration when awarding bonuses to States for success in
welfare reform efforts and issued guidance that States would not qualify for
performance bonuses unless they certified they were in compliance with Medicaid
(and Food Stamp) requirements. Last month, we sent a letter to all State
Medicaid Directors with additional guidance on what they must do to review
Medicaid terminations and re-enroll individuals who were improperly terminated.
For example, they must review computer systems and eligibility processes to
ensure that they do not improperly deny Medicaid benefits to eligible people.
They also must review records to be sure children losing SSI benefits because of
the new disability definition did not lose benefits guaranteed them by the BBA,
and reinstate anyone improperly terminated from Medicaid. The letter also
included guidance on streamlining processes for reviewing whether individuals
are eligible to continue receiving Medicaid and ensuring that computer systems
do not result in improper terminations. Several States are already reinstating
coverage for improperly terminated individuals, and we have received a generally
receptive response to the April letter from other States. On June 9, we will
hold a conference with the National Governors' Association and the American
Public Human Services Association on best practices for ensuring that eligible
individuals are not denied Medicaid coverage. Next Steps To build on these
efforts, the President's fiscal 2001 budget invests $5.6 billion over the next
ten years to reach and enroll millions of children who are-eligible for, but not
enrolled in, Medicaid or SCHILP. It would: provide new options to States to find
and enroll uninsured children through schools; expand
presumptive eligibility for children by allowing additional sites, such as child
care referral centers, to immediately enroll low-income
uninsured children in these programs while their applications
are being processed; and, require States to make the Medicaid enrollment process
for children as simple as it is in SCHIP. The Administration has also proposed
investing $85 billion over 10 years to improve health insurance
access and affordability. This would directly impact the very population
affected by welfare reform and expand coverage to at least 5 million additional
uninsured Americans by: providing a new, affordable
health insurance option for families through the SCHIP;
accelerating enrollment of uninsured children in Medicaid and
SCI- HP; expanding health insurance options for Americans
facing unique barriers to coverage; strengthening programs that provide
health care directly to the uninsured;
expanding Medicaid and SCHIP to include an option to cover children through age
20; and expanding Medicaid and SCHIP so there is a single, simple eligibility
standard for low- income families may be the best way to overcome the complexity
and stigma that have limited enrollment. CONCLUSION Helping States ensure that
all eligible individuals are enrolled in Medicaid and SCHIP is an integral part
of making welfare reform work. Health care coverage can be
critical in helping families work towards self-sufficiency. Most States are
addressing the challenges associated with changing eligibility rules and
systems, and many have developed promising new strategies for ensuring that
children and families who are not receiving cash assistance are properly
evaluated for Medicaid eligibility. We will continue to work with States as they
work to reinstate individuals who have been improperly terminated, and revise
computer systems and enrollment procedures to ensure that eligible individuals
are not denied coverage. And we look forward to working with this Congress to
enact the President's proposals to further expand coverage and
health care for low-income and uninsured
Americans. I thank you again for holding this hearing, and I am happy to answer
your questions.
LOAD-DATE: May 19, 2000, Friday