Millions To Ensure Health Coverage For Poor Go Unspent

 

Even as hundreds of thousands of poor children were losing their health insurance as a result of welfare reform, the states failed to spend money set aside specifically to prevent that from happening.

While enrollment in Medicaid -- the national health insurance program for the poor -- was falling, hundreds of millions of dollars in a federal Medicaid transition fund went unused.

Congress had allocated the money so that states would not accidentally cut poor families, particularly children, from the health insurance rolls as they overhauled their welfare systems. Advocates for the uninsured have estimated that, of the 418,000 poor children who lost their health coverage in 1997 alone, most were still eligible.

Congress created the $500 million transition fund in the 1996 welfare law. As of December, less than 25 percent, or $119.5 million, had been spent.

"The states argued for this program in the first place," said Joan Alker, a lobbyist for Families USA, a health-care advocacy group. "Then, they didn't even use it."

According to an accounting provided by the federal Health Care Financing Administration (HCFA), seven states and the District of Columbia had used none of their funds as of December 1999, the most recent date for which figures are available. Those states were Connecticut, Georgia, Hawaii, Louisiana, Nebraska, Tennessee and Texas.

Only New Jersey and Nevada have spent all of their money.

The Commerce Department puts the number of Americans lacking health care insurance at 44 million, compared with 38 million in 1994.

Four years ago, Congress severed the longstanding link between welfare and Medicaid. Previously, a family that applied for and received cash assistance would automatically qualify for health insurance

Although the 1996 law transformed welfare from an open-ended entitlement to a temporary benefit, it retained the guarantee of health insurance for poor families. The states then demanded extra funds to separate their administration of the two programs. States can tap the transition fund to alert poor families who do not know their children still qualify for health insurance, to train workers about the new rules and to rewrite and simplify applications and recode computers.

The eligibility rules of the Medicaid program vary from state to state, but all of them cover children who live at or below the federal poverty level -- $14,150 annually for a family of three. The benefit is important because many of the mothers who have left welfare have taken low-wage jobs that do not offer health insurance.

According to lobbyists for the states, the fact that the money went unspent for so long does not mean the states were failing to meet their obligation to extend health coverage to the poor.

The federal government, specifically HCFA, gave the states inconsistent guidance on exactly how the money could be used, says Matt Salo, an expert on health care policy at the National Governors' Association. That led many of them to tap other funds to de-link their Medicaid and welfare systems.

"Some states were told they did not qualify for the money, others were told that their intended uses were too broad," Salo said. In January, HCFA issued a letter to the states clarifying the purpose of the fund.

"I'm convinced that if you look at expenditures of this fund after January 2000, you are going to see a huge, huge increase," Salo said.

"I think it is disappointing that they didn't use it off the bat," said Alker of Families USA. "I think the real reason for a lot of them is that if they use this money, their enrollment will increase."

The states have been slow to reverse the decline in Medicaid patients that followed welfare reform, saving themselves millions of dollars in the process. The federal government funds 57 percent of the cost of Medicaid, with the remaining 43 percent provided by the states. In 1996 and 1997, more than 1.1 million people left the rolls.

Over the past year, HCFA has repeatedly urged states to fix their systems so that they do not cut off families. In April, it ordered states to go back through their files and reinstate families whose cases were terminated improperly.

A recent report from the Kaiser Commission on Medicaid and the Uninsured found that many states have responded. Researchers looked at enrollment in 21 states and found that by June 1999 more than half had increased their enrollment, although they had not yet compensated for declines since 1997.

The Kaiser report also noted that, as of June 1999, two of the largest states, New York and Texas, were still losing people from the Medicaid rolls.

New York has spent $6.8 million of the $30.2 million it was awarded and advocates there say the Medicaid rolls are starting to inch up again.

But, Texas reports its rolls have now leveled off at about 1.7 million people, 200,000 fewer than in 1997. Officials there say they have spent $1 million of their $27.5 million fund, a figure not reflected in the HCFA data, and that they are beginning initiatives that will bring more families into the program.

Anne Dunkelberg, a health care analyst with the liberal Center on Public Policy Priorities in Austin, attributes the lag in Texas to a "deeply engrained resistance to entitlement programs.

"Our leadership and our policy makers are divided in their commitment to increasing enrollment in programs like Medicaid," she said.

Dunkelberg too expects the rolls in Texas will soon inch up. But the state will live with the legacy of responding even more slowly than its poorer neighbors, Louisiana and Mississippi.

"It used to be 'Thank God for Mississippi.' I don't think we can say that anymore," Dunkelberg said.

 

Medicaid Transition Fund Expenditures:

  

STATE ALLOCATION REMAINING

AK

3,039,335

91.11%

AL

6,504,897

60%

AR

5,095,513

68.45%

AZ

7,961,603

95.62%

CA

83,719,457

91.71%

CO

5,166,316

93.79%

CT

5,756,737

99.58%

DC

3,259,072

100%

DE

2,801,757

97.06%

FL

22,262,238

77.34%

GA

11,591,548

100%

HI

3,435,742

100%

IA

4,782,362

21.70%

ID

3,288,535

80.25%

IL

19,363,893

87.14%

IN

7,545,162

76.90%

KS

4,496,386

2.57%

KY

7,269,014

92.13%

LA

9,029,185

100%

MA

9,463,490

38.25%

MD

7,595,943

87.98%

ME

3,569,238

68.19%

MI

15,975,444

33.60%

MN

7,708,769

15.99

MO

8,561,965

42.68%

MS

6,617,604

80.39%

MT

2,764,134

98.85%

NC

11,550,703

99.40%

ND

2,537,922

64.92%

NE

3,308,247

100%

NH

2,875,952

75.12%

NJ

11,012,253

-0.81%

NM

4,860,333

99.5%

NV

3,258,808

0%

NY

37,034,555

81.63%

OH

16,909,160

59.57%

OK

5,938,082

62.77%

OR

5,740,656

73.91%

PA

17,553,338

32.45%

RI

3,459,771

93%

SC

6,221,783

87.22%

SD

2,642,597

47.92%

TN

9,250,889

100%

TX

27,523,805

100%

UT

4,006,172

88.33%

VA

8,531,522

73.49%

VT

2,891,672

94.34%

WA

10,443,170

36.55%

WI

7,023,766

99.3%

WV

5,420,593

96.06%

WY

2,475,344

97.90%

 
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