State frets cost, impact of new Medicaid rule

OLYMPIA — Come Monday, the state will require an estimated 1 million Medicaid recipients to prove they are United States citizens in order to receive the government-funded health benefits for the poor.

Under a new federal rule, all new and returning Medicaid recipients must show passports, birth certificates or some other proof of citizenship.

Certain non-citizens in the country legally also are eligible for Medicaid.

State officials say the rule will be a costly nightmare to enforce and likely drive thousands of eligible poor people off the program, which covers hospital and doctor visits, and nursing-home care.

The state is preparing to bring on dozens of extra workers to help people track down the necessary documents.

The rule was pushed by Republicans in Congress who say states should be more diligent about denying coverage for illegal immigrants — especially at a time when they are having to cut Medicaid benefits for legal citizens. They predict the change will save state and federal governments hundreds of millions of dollars over the next decade.

Medicaid is funded jointly by the states and the federal government.

State auditors here in recent years have accused the state Medicaid agency of improperly spending tens of millions of dollars on undocumented immigrants.

But state officials dispute those findings and say there is scant evidence that non-citizens are a significant drain on the program.

"Congress just went off on its own, fixing a problem that doesn't exist," said Doug Porter, the state's Medicaid director.

While a few states have embraced the new rule, most are raising concerns. In a letter this week to Health and Human Services Secretary Michael Leavitt, Gov. Christine Gregoire called the new requirements "intolerable" and asked for leeway in enforcing them.

But unlike a few states that have indicated they plan to delay enforcing the new rule, state officials here say they intend to comply. States that do not enforce the requirements could risk losing federal Medicaid dollars.

"We've been dealt this hand of cards; we have to play it," said Robin Arnold-Williams, secretary of the state Department of Social and Health Services (DSHS).

Michael Marchand, regional spokesman for the Centers for Medicare and Medicaid Services, said the federal agency is trying to give states as much flexibility as possible to comply with the new rule.

But he also downplayed the concerns raised by critics, pointing out that four states, including New York, already require Medicaid recipients to show proof of citizenship.

"It's obviously something that those states have been able to work with," Marchand said.

There is a push in Congress to give states more time to comply with the new rule. A vote could come as soon as Thursday.

Washington's Medicaid caseload has been averaging nearly 1 million people — primarily children and elderly residents in low-income families. Nationwide, there are more than 50 million low-income people on Medicaid.

Like 46 other states, Washington requires applicants to simply sign a declaration that they are U.S. citizens. If the state suspects someone isn't a citizen, it can require the person to show proof.

But under the new rule, which takes effect Saturday, everyone will have to prove citizenship by showing a passport, birth certificate or other documents.

The Bush administration this month sent out a 13-page letter giving states detailed instructions on how to comply with the new rule.

People already enrolled in the program will have to prove citizenship when they come up for renewal. The state redetermines eligibility every six months for adults and every 12 months for children.

Existing applicants will be allowed to remain on the program as long as they are making a "good faith effort" to produce documentation.

State officials are still trying to figure out what that means.

New applicants, however, must prove citizenship before they can receive benefits. The state gets about 55,000 new applications per month.

Critics warn the new rule could deny health coverage for legal citizens who are unable to come up with the necessary documents.

They are especially concerned about how it will impact the elderly, people less likely to have a passport or birth certificate and who might have been born in a farmhouse instead of a hospital.

In recent weeks, Gregoire and others have painted a scenario of having to refuse coverage to an elderly person who suffers from dementia and has no immediate family to help track down the required documents.

"It's a huge problem for seniors," said local AARP lobbyist Lauren Moughon.

Porter, the state Medicaid director, also predicted the new requirements will push off thousands of eligible recipients — especially children whose families don't want to bother with the added hassle.

He said that's what happened three years ago when the state began requiring families to renew eligibility for children every six months. Medicaid enrollment declined by more than 40,000, and Gregoire has since ordered the state to go back to the 12-month eligibility period for kids.

"We're very concerned that this is going to create tens of thousands of new uninsured people," said Rebecca Kavoussi, public-policy director for Community Health Network of Washington.

Kavoussi said hospitals and clinics will still have to care for those people, driving up costs for everyone else.

The federal guidelines don't require states to track down the required documentation. But Porter said Washington — not new applicants or returning clients — will bear that burden. For instance, if a person was born in another state, Washington will order and pay for a copy of their birth certificate.

Once a person has proved citizenship, they won't have to do it again. So most of the costs of enforcing the new rule will fall in the first year.

The state estimates it will need to hire at least 68 new employees and possibly as many as 250. Cost estimates range from nearly $6 million to $17 million over the next year.

Arnold-Williams, the DSHS secretary, said the state recently pulled a sample of 400 Medicaid recipients and didn't find a single non-citizen getting services.

State officials also point to a recent report by the federal Office of Inspector General that said states have found little evidence that many non-citizens are receiving Medicaid.

"I haven't seen anyone who has shown [the new rule] is going to produce a lot of savings," Arnold-Williams said.

"What we do know is it's going to cost us more."

Ralph Thomas: 360-943-9882 or rthomas@seattletimes.com