Reminder: many or most of those who lost coverage in Medicaid purge were eligible beneficiaries | Arkansas Blog

Tuesday, August 11, 2015

Reminder: many or most of those who lost coverage in Medicaid purge were eligible beneficiaries

Posted By on Tue, Aug 11, 2015 at 7:43 PM

I’m going to keep beating this drum, because it is the key piece of context to understanding this Medicaid eligibility verification mess, from the 10-day deadline policy that rushed the state into chaos to the potential consequences that state officials and insurance companies are doing their best to manage now: Many, perhaps most, of those losing coverage are in fact eligible for Medicaid.

Here is what Department of Human Services Director John Selig told me on Friday, when he reached out to me to clarify information about how the verification system works: "I think it’s reasonable to assume that a significant number [of those whose coverage was terminated] are probably still Medicaid eligible."

Some beneficiaries were flagged for income verification because the wage data from the most recent quarter suggested that their incomes have gone up, over the Medicaid eligibility line (of course even some of this group are in fact eligible since some may have incomes that fluctuate throughout the year). But others — parents with very low incomes — had changes in income up or down that suggested that they were still eligible according to the very data that flagged them for letters in the first place. And still others — and this is likely the biggest group of all — showed no income at all according to the wage data. Of course, anyone who legitimately has no income is Medicaid eligible. 

DHS is not capturing the actual recent wage data of these beneficiaries, so it is impossible to know for sure who's who and how many of those whose coverage was terminated have wage data that seems to suggest they're eligible. However, we know that 40 percent of private option beneficiaries previously were verified as zero-income. It stands to reason that this pool of cancellations is heavily made up of people who don't show any income on the wage data. 

Selig declined to speculate on just how many but said of the terminations, "frankly a large number...a big chunk are zero [income according to wage services data]." He added, "A lot of these people are going to be people who were at zero before."

Now in some cases, folks with zero income via the wage data may in fact have income, via out-of-state wages or unreported cash income, etc. But again, DHS did due diligence previously and verified that big block of the program — around 40 percent — with no income. So presumably there is still a large group of folks who legitimately have no income. And tens of thousands of them are now facing termination of their health coverage. 

Regarding the DHS clarification, for the record, the agency's original statements about flagging all changes of 10 percent was not just a matter of miscommunication – I explicitly asked and re-asked detailed questions last week about this issue and was directly told that they were flagging all beneficiaries whose income went up or down by 10 percent. Mistakes happen; DHS is obviously swamped right now and they issued a correction in 48 hours.

What is troubling, however, is that until they responded to our reporting, DHS had never clearly explained that they were flagging beneficiaries because the wage data showed zero income. This isn’t just an “in the weeds” detail that we were pestering them about. This is a vital part of the story! It establishes that by design, the system was inevitably going to flag a large group of beneficiaries who were income eligible. Even the governor seemed unaware of this when he said last week that there was only "anecdotal evidence" that eligible beneficiaries were being terminated. That's just not so. 

A few media reports I've seen recently remain vague on this point. A recent blog post from John Brummett did a nice job of explaining one category of flagged beneficiary (those who appear to be making more money and phasing out of eligibility). The post featured a conversation with a DHS spokesperson but the folks with zero income never came up in Brummett's post. [UPDATE: An earlier version of this post wondered whether DHS was still eliding this point now, but that was unfair; it's just as likely that some media reports are just missing the new information. I've removed that language.]

The reason this is such a vital part of the story, of course, is that the governor continues to cling to policy choices that appear doomed to lead to cancellations of coverage. Under the circumstances, we should not forget the stakes: people are losing their health insurance who appear to be Medicaid eligible according to the state's own data. 

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