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Report: Many States Increasing Efforts to Cover Uninsured

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 9, 2007 -- A third of states have taken steps to cover more of their uninsured residents but a new federal law may be undercutting some of those efforts, according to a study released Tuesday by the Kaiser Commission on Medicaid and the Uninsured.

The sixth annual review of eligibility rules, enrollment and renewal procedures, and cost-sharing practices for Medicaid and the State Children's Health Insurance Program (SCHIP) found that one-third of states increased access to health coverage through both Medicaid and SCHIP. Hawaii, Illinois, and Massachusetts undertook significant expansions while several other states focused on more incremental expansions for children, parents, and pregnant women, according to the report, which was compiled by the Center on Budget and Policy Priorities and the Kaiser Commission. The review of programs between July 2005 and July 2006 covered all 50 states and the District of Columbia.

For the first time in four years, no state cut income eligibility requirements in Medicaid or SCHIP, but some states used other measures to restrict eligibility. South Carolina imposed asset tests; Florida instituted a waiting period during which children must be uninsured before they can apply for coverage; and Utah reinstated its SCHIP freeze, the only state in 2006 to do so, according to the report.

Regulations issued as part of the implementation of a federal law signed in early 2006 may be complicating states' efforts to enroll more uninsured in Medicaid and SCHIP, researchers found.

A provision of the budget-savings law (PL 109-171) requires U.S. citizens applying for Medicaid or seeking to renew their Medicaid coverage to present proof of their citizenship and identity. "This new federal requirement restricts state flexibility to establish simple and efficient procedures and appears to be compromising efforts to cover eligible individuals," the report concludes.

A growing number of states are reporting enrollment declines and large backlogs of applications since the requirement took effect in July 2006, according to Donna Cohen Ross, one of the report's authors, who spoke at a news conference.

Cindi Jones, chief deputy director of the Virginia Department of Medical Assistance Services, said the documentation requirements, imposed by the Centers for Medicare and Medicaid Services (CMS), are an unnecessary complication for states and beneficiaries.

"If there are hurdles in their way, many families give up" and do not return—if they return at all—until their children get sick. Since the new documentation requirement went into effect, the number of children covered by Virginia's Medicaid program has dropped by 12,000," she said.

CMS spokesman Jeff Nelligan said, "We believe we have given the states the tools they need to both implement the law and provide sufficient flexibility to assist individuals in establishing their citizenship. We continue to monitor state implementation and are not aware of any data that shows there are significant barriers to enrollment." If states are experiencing difficulties, they should report them to CMS, Nelligan said.

While the budget-savings law also gave states new power to impose cost-sharing on Medicaid beneficiaries, Kentucky was the only state to do so in 2006 and also imposed cost-sharing on as part of its SCHIP program as well.

The SCHIP program is up for reauthorization in 2007 and the amount of federal funding provided "will be critical" to determining if those who now have coverage will keep it and how many more states can expand coverage in the future.

Sustaining Medicaid funding levels also is important, the report notes, since most children who qualify for publicly financed health coverage are covered by Medicaid.

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