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Federal Website Glitches Hinder Medicaid Applicants from Gaining Coverage

By Rebecca Adams, CQ HealthBeat Associate Editor

March 25, 2014 -- More than 400,000 people who appear to qualify for Medicaid or the Children's Health Insurance Program (CHIP) are still waiting for their applications to be sent from the federal insurance exchange website to states for processing, according to state officials. Hundreds of thousands more whose applications have been sent to the states are in limbo as officials sift through duplicate applications and try to fix errors.

The consumers are among the approximately 1.3 million people nationwide whose applications were delayed since Oct. 1 because of technical glitches with the federal website, The site was supposed to seamlessly exchange information with states when it was launched six months ago. But despite administration assurances it would be ready in November, the start date was delayed months longer.

Most of the technical problems with were fixed by late November, to the relief of a White House trying to boost sign-ups during an open enrollment period. But the function that sends states any applications from people who appear to qualify for Medicaid or CHIP took months longer to fix.

As a result, applicants with the lowest incomes—including people unable to work because of chronic medical conditions, adults in low-wage jobs and poor families with children—either had to reapply with state agencies or wait for coverage confirmation that in some cases, never came. Some who didn't resubmit applications to states have waited to get their Medicaid coverage cards since October, the state Medicaid officials said.

States such as Georgia and Michigan still have not gotten any applications from the federal marketplace, nearly six months after people started applying, said state officials. The wait became so long that federal and state officials urged people to start the application process over with state agencies, a workaround that created duplicative applications and administrative headaches for local officials.

"Without a doubt, it's created a hardship for consumers," said Jeremiah Samples, assistant secretary for the West Virginia Department of Health and Human Resource. "We wish it didn't happen. We have done all we can to assist our consumers."

CQ HealthBeat contacted 24 of the 36 states connected to the federal site who are affected by the technical problem, focusing on those with at least 10,000 people whose income appeared to qualify for Medicaid, as federal officials reported in March. The states that discussed the data were Arizona, Arkansas, Florida, Georgia, Iowa, Illinois, Indiana, Michigan, New Mexico, Nebraska, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Utah, Virginia, and West Virginia.

Three of the 24 states—New Jersey, Tennessee, and Wisconsin—reported the number of applications received and processed but didn't have estimates of the people who were waiting. Kansas and Missouri officials did not respond.

Estimates of how many applications have not been sent to states are probably conservative. They do not include all the affected states and several only discussed the number of files they are expecting, not the number of individuals covered by the application.

In states that provided data for both applications and individuals, the average number of people represented by an application ranged from 1.5 individuals to 2.3 individuals.

The health care law offers expands medical coverage for low-income people and took steps to educate the public about benefits that existed before the law was enacted. But the technical problems and the resulting backlogs have slowed some consumers' ability to confirm enrollment.

The delay also affects state officials trying to administer health services, medical providers who expect to be paid for services provided and policymakers trying to understand the effects of the health law (PL 111-148, PL 111-152).

Federal officials envisioned a "no wrong door" approach that would enable people to apply for coverage at the federal or state level without having to worry whether they were eligible for subsidized plans in the health exchanges or Medicaid. But at least initially, the federal portal became the wrong door.

After it became apparent that the problems with the federal marketplace would not be fixed quickly, individuals were urged to reapply for coverage through state Medicaid programs, despite the extra administrative burden. The federal Centers for Medicare and Medicaid Services (CMS) officials offered to have a call center representative contact every person affected and use a script to encourage people to reapply through the state. Twenty-one states took the agency up on the offer, said a CMS spokeswoman, an acknowledgement that waiting to get enrolled through would likely take too long.

Some states that track the number of duplicate applications, such as Utah, said that about 20 percent of the applications that they are getting from are from people who are already enrolled in Medicaid. In Virginia, 35 percent are duplicates. In South Carolina and Texas, about 40 percent of the people are already enrolled or applied again at the state.

The data underscore how difficult it is to know how many people are actually enrolling in Medicaid or CHIP for the first time under the health care law.

Consumers who did not reapply through their state agencies could have seen their medical problems worsen during the months spent waiting. And though Medicaid coverage can be made retroactive as long as 90 days prior to when an individual applies, many eligible people are unaware of the feature. Some may also not want to seek out treatment, fearing high out-of-pocket costs. And doctors are generally wary of providing care to people who can't show a Medicaid card.

Most states started getting access to a backlog of applications in mid-January, after the technical glitches with the federal site were worked out. CMS officials in January notified states of 10 technical errors in the applications that had affected people who appear to qualify for Medicaid. Those errors have been fixed.

Though states were unable to access applications made with from the federal marketplace, local officials say they were able to send federal officials applications they received from people who appeared to qualify for marketplace plans.

Even now, some applications are hard to use. Some state officials say that the data contains extraneous information that's hard for their data systems to process, or that the transferred applications will not flow into the state data networks because of technical errors. Almost all the states said some applications contain errors or lack information that is needed to complete the application process, such as complete names and addresses.

Working through all of the backlogged files can take some time.

"It's been a problem," said Stephanie Goodman, the spokeswoman for the Texas Health and Human Services Commission. "The delay meant that a huge backlog of cases hit the state system all at once. Even worse, people have had to wait too long to get a decision and some families received bad information from the federal government. There were families applying for help through the marketplace who were mistakenly told they could get Medicaid even though they knew their incomes were too high to qualify."

Some states are trying to clean up the files and remove applications of people who are already enrolled. That is the case in Ohio, which is working on 106,624 applications from

In Arizona, more than 60,000 cases are in limbo as state officials work on converting and grouping the applications into a format they can use. Monica Coury, assistant director of intergovernmental relations at the Arizona Health Care Cost Containment System, which runs the state's Medicaid program, compares the process to one in which files are placed into a virtual "parking lot" until the state can upload them without technical errors.

"There is no end to the complexity of this project," said Coury. "But ultimately, this will all get worked out. It is just a slower process than anyone would have liked."

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