Medicaid enrollment drops in Pa., rises in N.J.

Pennsylvania dropped more than 9 percent of children, families, and pregnant women from Medicaid last year, nearly triple the rate of any other state, according to a new national report.

Most states added people. New Jersey came in 10th from the top, with nearly 5 percent growth - and No. 2 when counting all Medicaid enrollees in all categories. Pennsylvania was last on both measures.

The period covered by the report, June 2011 through June 2012, coincides with Corbett administration directives for state workers to conduct expedited reviews of hundreds of thousands of backlogged cases, resulting in a decline of more than 80,000 insured children over several months.

The Kaiser Family Foundation report suggests that the losses may have been even larger and compares them for the first time with experiences in other states that year.

A separate Kaiser report found that enrollment in Pennsylvania's much smaller Children's Health Insurance Program (CHIP) fell slightly over the same period. Commercial health insurance for all ages was flat statewide, according to HealthLeaders-InterStudy, a health-care data analysis company.

"It is utterly disappointing to see Pennsylvania at the bottom of the heap when it comes to kids and parents," said Colleen McCauley, health policy director for Public Citizens for Children and Youth, a Philadelphia advocacy group. "Where does the governor think that these children are going to get health insurance coverage and get health care?"

Advocates are particularly concerned about what will happen if Gov. Corbett sticks to his position of not accepting an expansion of the Medicaid program, as envisioned in the Affordable Care Act. Gov. Christie is going ahead with expansion.

Carey Miller, a spokeswoman for the Pennsylvania Department of Public Welfare, wrote in an e-mail Tuesday evening: "Throughout the Kaiser report, it does point out that during economic downturns there is an increase in demand for Medicaid coverage. However, as the economy bounces back, there is less demand or slower growth in the Medicaid program." The state's unemployment rate dropped from 8 percent to 7.4 percent during the period covered, she wrote, and 20,000 jobs were added statewide.

Miller did not address the precipitous enrollment drop indicated in the report. "At this time we are unable to verify the data in the Kaiser report," she said.

Kaiser said its numbers were based on states' data. Noting that Pennsylvania was an outlier, the report said that the state "did not change existing enrollment policies, but did report that they were more rigorously applying existing policies, which the state indicated could result in more cases being closed for failure to submit documentation."

That appears to be a reference to DPW's attempts to quickly complete renewal reviews, mandated by state law, that had become backlogged early in the Corbett administration. Cases that were closed - insurance terminated - because of lack of documentation spiked in mid-2011.

"What they did was try to force too much work through caseworkers that didn't have enough time to process it," said George Hoover, who directed Medicaid eligibility policy during the Republican administrations of Tom Ridge and Mark Schweiker and the Democratic administration of Ed Rendell. "Cases were closed for failure to have the paper processed."

Hoover, now the health policy director of the Harrisburg-based advocacy group Pennsylvania Partnerships for Children, said that Medicaid enrollment for children had rebounded slightly, up 6,000 through July, one year after the 80,000 drop.

Community Legal Services of Philadelphia had filed a complaint over the disenrollments with the federal Department of Health and Human Services and threatened to sue the state, resulting in an agreement that required Harrisburg to send follow up letters to more than 100,000 Medicaid recipients who had been cut off for lack of documentation.

The state also agreed to look at eligibility information it already had from other sources, such as Social Security, rather than wait for new renewal paperwork from clients, said Richard Weishaupt, a legal services lawyer. "They are doing somewhat better at looking that stuff up," he said.

The surge in state caseworkers' workload that preceded the precipitous drop in enrollment raised suspicions among advocacy groups that the Corbett administration was using a backhanded way to cut the Medicaid rolls because it lacked the authority to make major changes in the program, which is the single biggest state budget item.

Congress for several years has prohibited states from attempting to save money by making major eligibility changes or imposing enrollment restrictions in their Medicaid programs. Few states have since cut enrollment.

Pennsylvania's total Medicaid enrollment dropped 117,200 (5.3 percent) between June 2011 and June 2012, by far the sharpest of any state in the past five years by both number and percentage. The decline for children, families and pregnant women was so large, 131,900 (9.2 percent), that it apparently wiped out small gains in other categories.

"It seems like the drops were concentrated among families," said Laura Snyder, a policy analyst at the Kaiser Commission for Medicaid and the Uninsured and a coauthor of the report.

New Jersey, meanwhile, expanded Medicaid by 82,700 people (9.7 percent), including 27,800 children, families and pregnant women (4.5 percent).

The state has eased the application process in recent years by, for instance, using already available tax returns to verify income, eliminating a layer of paperwork, and determining "presumptive" eligibility for uninsured children receiving services in clinics and emergency rooms.

New Jersey is an example of states that are streamlining the application system to ensure that eligible people are covered, said Genevieve Kenney, an economist and codirector of the Urban Institute's health policy center. At the other end are states such as Pennsylvania that have focused on rooting out abuse, causing some eligible people to lose coverage, she said.

"There is very little evidence that we have a very serious problem with kids getting Medicaid or CHIP who are ineligible for it," Kenney said.

On the flip side, she said, when coverage lapses, "there is absolutely a cost that the children are experiencing and their families are experiencing and there is probably a societal cost, too."