Medicaid Enrollment Plummets Under New Rule

Enrollment in Medicaid has plummeted as a result of new federal requirements that low-income patients must show proof of citizenship before they can qualify for Medicaid, according to a study published Feb. 2 by the Center on Budget and Policy Priorities, or CBPP. Washington, D.C.-based CBPP is a policy organization that works at the national and state levels on fiscal policy and public programs that affect low- and moderate-income families and individuals.

The new requirements are part of the Deficit Reduction Act of 2005, which stipulates that all new applicants for Medicaid, as well as those who previously had been eligible based on their income status, must prove their U.S. citizenship and identity before getting coverage.

The study reviewed Medicaid enrollment in Wisconsin, Kansas, Iowa, Louisiana, Virginia and New Hampshire. It found that, since implementation of the new requirement, two types of problems have surfaced:

The CBPP study confirms what several state officials have observed since July 1, 2006, when the Deficit Reduction Act of 2005 provisions took effect. The Kansas Health Policy Authority, or KHPA, reported a drop of between 18,000 and 20,000 applicants and previous beneficiaries since the provisions were implemented. In Wisconsin, officials said 14,034 patients considered Medicaid-eligible based on income either were denied Medicaid enrollment or lost coverage between August and December 2006. Virginia saw a net decline of nearly 12,000 children by the end of November 2006. The other states in the study also reported dramatic decreases in Medicaid enrollment between July and December 2006.

Family physicians may see some fallout as patients who qualify for Medicaid based on income are denied coverage when they apply for first-time or renewed eligibility, said Diana Ewert, AAFP senior manager of state government relations.

"It's possible some may present to their physician's office and say they've applied for Medicaid," said Ewert. But if that application is denied after care is provided, "it's possible that physicians will be treating people and not be compensated for that care."

The KHPA agrees. "We anticipate hospital emergency rooms and other health care providers will bear some of the costs associated with uninsured applicants -- especially for pregnant women who have been unable to enroll in Medicaid," says a KHPA fact sheet (PDF file: 3 pages / 56 KB. More about PDFs.) on the effects of the new requirement.