New Survey Shows Rare Enrollment Drop In Medicaid

Wednesday, October 10th 2007, 6:44 pm

By: News On 6

WASHINGTON (AP) _ For the first time in nearly a decade, enrollment in the nation's health insurance program for the poor fell during the fiscal year ending June 30, says a new survey of state Medicaid directors.

In turn, that drop led to the second smallest increase in Medicaid spending during the past decade _ 2.9 percent.

Medicaid directors attributed the 0.5 percent enrollment decline to a solid economy and to new documentation checks that require beneficiaries to prove their citizenship or that they are qualified legal immigrants.

Before July 1, 2006, beneficiaries could attest to their citizenship by checking a box on their application. Now, they have to provide documentation, such as a birth certificate and driver's license.

Three-quarters of states singled out the documentation requirements as contributing to lower Medicaid enrollment. Forty-five states said the requirements increased administrative costs because they had to train workers and set up computer systems to check the validity of the records that beneficiaries presented.

Andrew Allison, the Medicaid director for Kansas, said the documentation requirements led to an enrollment decline of about 20,000 children in his state. He said the requirements had the largest impact on black children.

``It was a tremendous administrative burden on us, and it was certainly a burden on consumers,'' Allison said.

At the same time, directors said they believe the new documentation requirements had little affect on the number of illegal immigrants in Medicaid.

``There's a lot of effort to slow what I think has been a pretty small problem,'' said David Parrella, director of Connecticut's Medicaid program.

A federal Medicaid official disputed the finding that the new documentation requirements led to an enrollment decline over the past year. The Centers for Medicare and Medicaid Services actually noted an enrollment decline before the documentation requirements kicked in, and attributed it to a strong economy.

``As far as we can see through reviews with the states, the documentation requirement has had no impact,'' said Dennis Smith, director of the Center for Medicaid and State Operations.

Medicaid is the federal-state partnership that provides health coverage to about 58 million people. About half of enrollees are children, but it's the elderly who generate about 70 percent of the program's spending. The elderly rely on Medicaid to pay for their nursing home care.

On average, Medicaid is the second largest program in states' budgets, following spending for education.

The Kaiser Commission on Medicaid and the Uninsured commissioned and helped analyze data from the survey, which took place in July and August, just after most states finished their 2007 fiscal years. The commission conducts research and provides analysis on health issues.

While the states reported a slight enrollment decline, the spending increase of 2.9 percent occurred, in large measure, because states decided to increase reimbursement rates for some of their health care providers, such as doctors, hospitals and nursing homes, said Vernon Smith of Health Management Associates, which conducted the survey.

In 2000 through 2002, Medicaid spending grew at double-digit rates. As is usually the case, enrollment soared as the economy struggled. States responded by freezing payments to health care providers and by removing certain populations from the program altogether.

States are now making up for those cost-cutting steps. Forty-two states plan to expand health insurance coverage to more of their residents, or have already done so, and almost all rely on Medicaid to finance those plans, Vernon Smith said.

Parrella said Connecticut raised its reimbursement rates after conducting surveys that showed high levels of health care providers who would not accept new Medicaid patients. He described the move to increase reimbursement rates as unprecedented: ``In 21 years, I haven't seen anything like it,'' he said.

In the latest year for which spending figures are available, the federal government and states spent about $314 billion on Medicaid during fiscal year 2006. The federal government picked up about 57 percent of that total.

For the current fiscal year, states legislators authorized spending that, on average, would amount to a 6.3 percent spending increase.