Obamacare’s Medicaid Trap

The White House’s “tech surge” fixed many of the Affordable Care Act’s high-profile problems, but glitches continue to hurt some of the nation’s poorest patients.

National Journal
Sophie Novack
April 10, 2014, 1 a.m.

The tech­no­logy be­hind a huge part of Obama­care’s ef­forts to ex­pand in­sur­ance cov­er­age — the part aimed at low-in­come Amer­ic­ans — re­mains far from fixed, and the glitches are keep­ing some of the na­tion’s most vul­ner­able pa­tients from get­ting in­sured.

The ad­min­is­tra­tion launched a “tech surge” to im­prove the Health­Care.gov ex­per­i­ence for those shop­ping for private in­sur­ance, but the web­site’s pro­cess for en­rolling in Medi­caid re­mained mired in glitches. And for Pres­id­ent Obama’s ef­forts to ex­pand health cov­er­age that’s a ma­jor prob­lem.

To reach would-be Medi­caid re­cip­i­ents, the Af­ford­able Care Act re­lies on po­ten­tial en­rollees be­ing able to ef­fect­ively nav­ig­ate the law’s web­site to en­roll. And there, just as with the early days of Health­Care.gov, tech­nic­al fail­ures have cre­ated a high hurdle for those look­ing to join the ranks of the newly in­sured.

Some ap­plic­a­tions sent from the ex­changes nev­er make it to the state Medi­caid of­fices. Of those that do, jumbled or miss­ing data can make the ap­plic­a­tions im­possible to pro­cess in any kind of auto­mated way. In the mean­time, these in­di­vidu­als are without cov­er­age as they wait for their ap­plic­a­tions to be re­viewed, and their pro­spects for get­ting in­sured soon are dim­ming as back­logs build.

And then there’s the ex­treme ex­ample, where some ap­plic­ants — typ­ic­ally those whose in­comes put them on the cusp of Medi­caid eli­gib­il­ity — have been trapped in a cir­cu­lar pur­gat­ory. Con­sumers are in­cor­rectly deemed eli­gible for Medi­caid by the ex­changes, then re­jec­ted by the Medi­caid of­fices. Their ap­plic­a­tions then need to be sent back over to the mar­ket­places, but they don’t al­ways make it there.

The size of the prob­lem is dif­fi­cult to pin­point, as ex­per­i­ences vary by state and in­form­a­tion is largely an­ec­dot­al. But back­logs of Medi­caid ap­plic­a­tions stretch­ing to the hun­dreds of thou­sands have been re­por­ted in states in­clud­ing Texas, Illinois, Cali­for­nia, and New Jer­sey.

All of this is the op­pos­ite of what the White House in­ten­ded: The fed­er­al and state ex­change web­sites were meant to serve as a one-stop shop for in­sur­ance, where con­sumers could im­me­di­ately find out wheth­er they were eli­gible for sub­sid­ized private cov­er­age or Medi­caid. The law’s Medi­caid ef­forts are aimed at clos­ing a gap in the so­cial safety net that left out people with in­comes that were high enough to miss their home state’s Medi­caid qual­i­fic­a­tions but not high enough to af­ford in­sur­ance.

And through the law, the hope was that if people were eli­gible for Medi­caid, the site would for­ward their ap­plic­a­tion to their state’s Medi­caid of­fice and they would be en­rolled right away.

But from day one, that wasn’t the real­ity for many Medi­caid en­rollees.

“Right out of the gate, we knew the trans­fer wasn’t ready and wasn’t hap­pen­ing,” says Matt Salo, ex­ec­ut­ive dir­ect­or of the Na­tion­al As­so­ci­ation of Medi­caid Dir­ect­ors. “Every­one was hope­ful it would get fixed quickly; it turns out some of the prob­lems with Health­Care.gov con­nect­ing to Medi­caid were big­ger than an­ti­cip­ated.”

But while the ad­min­is­tra­tion went all-in to fix the high-pro­file prob­lems with the en­roll­ment pro­cess for private in­sur­ance, work on Medi­caid has moved more slowly.

“Medi­caid is al­ways the for­got­ten stepchild,” Salo says. “[The mar­ket­place] has open en­roll­ment com­ing to an end; people eli­gible for the ex­changes will have pen­al­ties [if they don’t en­roll]; there are le­git­im­ate con­cerns from a so­cial in­sur­ance mod­el if we don’t get enough people — and enough re­l­at­ively healthy people — signed up. None of that really mat­ters to Medi­caid.”

The pro­gram’s year-round en­roll­ment and ret­ro­act­ive cov­er­age meant less pres­sure to fix the Medi­caid prob­lems im­me­di­ately.

But the need for cov­er­age has still been there, des­pite the in­ab­il­ity to handle the de­mand. The ad­min­is­tra­tion re­por­ted last week that Medi­caid en­roll­ment has jumped by 3 mil­lion since Oc­to­ber, largely as a res­ult of the health care law.

From the be­gin­ning, dif­fer­ences in tech­nic­al cap­ab­il­it­ies left the state and fed­er­al sys­tems out of sync, so ap­plic­a­tions could not be trans­ferred suc­cess­fully. The IT prob­lems spiraled more out of con­trol with the volume of ap­plic­a­tions and lim­ited re­sources to pro­cess them by hand. States were not pre­pared for the in­flux of ap­plic­a­tions, and it turns out pre­par­a­tion for Medi­caid staff was also side­lined, even be­fore en­roll­ment began.

“There was so much en­ergy in ad­vance of open en­roll­ment to make sure nav­ig­at­ors and ex­change staff were fully trained — but not as much on the train­ing of Medi­caid agen­cies. Even in states that didn’t ex­pand Medi­caid, they still had to change the way they did eli­gib­il­ity, which could cause some con­fu­sion,” says an en­roll­ment ex­pert from a pro­gress­ive or­gan­iz­a­tion who asked not to be named.

States have since in­creased staff­ing, but re­sources are still lim­ited and manu­al en­roll­ment is slow, so ap­plic­a­tion back­logs have con­tin­ued to grow.

With those set­backs long bey­ond its con­trol, however, the ad­min­is­tra­tion is now tasked with mak­ing Medi­caid work as well as pos­sible, now that open en­roll­ment for private in­sur­ance has (mostly) ended.

The Cen­ters for Medi­care and Medi­caid Ser­vices is still test­ing the sys­tems as ap­plic­a­tions con­tin­ue to be trans­ferred. “As part of our dis­tri­bu­tion pro­cess to states, we are work­ing with them to share files in waves in or­der to help them man­age volume and handle pro­cessing,” a spokes­man wrote in an email.

Since the launch in Oc­to­ber, CMS has been provid­ing all states with weekly sum­mar­ies of the people whose ap­plic­a­tions the Medi­caid of­fices should be re­ceiv­ing. Be­gin­ning in Novem­ber, states had the op­tion to simply take the fed­er­al agency’s de­term­in­a­tions of eli­gib­il­ity and en­roll those res­id­ents im­me­di­ately, as a tem­por­ary emer­gency work-around. Only five states are cur­rently us­ing that op­tion.

But no quick fix has made it­self ap­par­ent, and ad­voc­ates and ap­plic­ants alike are wor­ried about when re­lief will come. The race is on to find solu­tions be­fore the next open-en­roll­ment peri­od be­gins in just a mat­ter of months and at­ten­tion is again pulled else­where.

In the mean­time, states may opt to use the sum­mary re­ports to con­firm they have re­ceived all ap­plic­a­tions. In states that don’t, however, there is no way of know­ing if an ap­plic­a­tion didn’t make it, and in­di­vidu­als may be stuck wait­ing for an an­swer that isn’t com­ing.

People who have not re­ceived con­firm­a­tion or been giv­en an in­sur­ance card are likely to forgo care or rely on clin­ics and the emer­gency room in the mean­time. If they do seek any private care while in limbo, those who are ul­ti­mately de­term­ined Medi­caid eli­gible will re­ceive ret­ro­act­ive com­pens­a­tion. But those who end up be­ing de­term­ined in­eligible and sent back to the ex­changes could end up stuck with high med­ic­al bills they may have ex­pec­ted to get covered.

With some states re­port­ing back­logs near­ing a mil­lion, it could be a long while be­fore they’re in­sured, or even hear back at all.

As these is­sues con­tin­ue to be worked through, gov­ern­ment of­fi­cials and en­roll­ment groups are en­cour­aging Medi­caid-eli­gible in­di­vidu­als to en­roll dir­ectly with their state agen­cies.

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