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The Hidden Failure of Obama’s Health Care Overhaul

At least 2.9 million Americans who signed up for Medicaid coverage as part of the health care overhaul have not had their applications processed, with some paperwork sitting in queues since last fall, according to a 50-state survey by CQ Roll Call.

Those delays — due to technological snags with enrollment websites, bureaucratic tangles at state Medicaid programs and a surge of applicants — betray Barack Obama’s promise to expand access to health care for some of the nation’s most vulnerable citizens.

As a result, some low-income people are being prevented from accessing benefits they are legally entitled to receive. Those who face delays may instead put off doctors appointments and lose access to their medicines, complicating their medical conditions and increasing the eventual cost to U.S. taxpayers.

Democratic lawmakers who have promoted the law’s historic coverage expansion are wary of acknowledging problems that hand opponents of the Affordable Care Act another rhetorical weapon, said Robert Blendon, a professor at Harvard University School of Public Health and Kennedy School of Government.

“Any problem plays against the Democrats,” Blendon said.

Meanwhile, Republicans usually eager to criticize the Obama administration or states for implementation problems risk looking hypocritical by showcasing the Medicaid waits. Many oppose expanding the program to people with incomes as high as 138 percent of the federal poverty line, as the law allows states to do, and are loath to demand more efficient enrollment to achieve that goal.

“It’s a total contradiction in terms to spend your public time castigating Medicaid as something that never should have been expanded for poor people and as a broken, problem-riddled system, and then turn around and complain about the length of time to enroll people,” said Sara Rosenbaum, a member of the Medicaid and CHIP Payment and Access Commission, which advises Congress.

Medicaid is a joint federal-state health program for the poor seen as a linchpin to expanding health coverage under the 2010 law (PL 111-148, PL 111-152).

Eligibility for the program is determined by federal and state guidelines, with the administration of the program left to the states. People enroll for Medicaid through federal or state websites or use other avenues, such as filing paper applications.

Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, said the government tried to help states anticipate the workload from the coverage expansion through steps such as weekly data releases showing how many residents appeared to qualify for Medicaid. He said the agency is busy transferring data to those states equipped to process the information.

“CMS is actively transferring accounts to all states that are ready to receive them,” Albright said in an email. “In the meantime, every state not receiving transfers can be enrolling people through alternative options CMS has made available.”


Variety of Problems

Forty-one states as of May 29 responded to requests from CQ Roll Call about the number of pending Medicaid applications, the number of individuals covered in the applications and processing times. The remainder, including Missouri and New Mexico, didn’t respond to CQ Roll Call’s emails and phone calls for enrollment data.

The problems are most acute in three states — California, Illinois and North Carolina — where almost 1.5 million Medicaid applicants remain in limbo. Though all three are experiencing high volumes of enrollment, problems vary from California’s balky electronic sign-up system to Illinois’ inability to predict a surge of applications.

The waits are linked in part to the troubled rollout of the federal insurance website healthcare.gov last fall. Alaska, Kansas, Maine and Michigan still are unable to receive applications their residents completed through the federal website. Others such as Georgia received applications submitted last fall in May.

“These people were encouraged to seek help, and they didn’t get it,” Blendon said.

Beyond the individuals, the delays have left doctors, hospitals and other health providers unsure whether they will be reimbursed for care they provide to people who appear eligible for Medicaid but haven’t received benefit cards.

“It’s a huge systemic issue right now,” said Rosenbaum.

The delays are caused by a mix of technical problems and a surge of applications, especially in states that cajoled their residents to sign up for newly expanded benefits. More than 900,000 Californians are waiting for their benefit cards or denial letters, say state officials. In Illinois, another 330,000 people are in limbo. In North Carolina, it’s 285,884, plus another 12,956 applications that may include more than one person.

Norman Williams, a spokesman for the California Medicaid system, said the situation is “not something we are satisfied with.”

He said people still waiting for coverage decisions could go to local hospitals that can expedite their enrollments and, in many cases, provide temporary benefit cards.

“It’s not an easy situation for them,” he said. “We certainly understand that. That’s why we have this sense of urgency to get this done and get them into coverage.”


Retroactive Benefits

Supporters of the law note that Medicaid benefits are retroactive. If an eligible person received care while waiting to be enrolled, the program would pay for services dating back 90 days before the person applied, although some states make applicants specifically request retroactive coverage. But people with applications in the queue may not be aware of that requirement and have no guarantee that states will agree they qualify for Medicaid.

States are supposed to process Medicaid applications within 45 days. Several reported that they are largely meeting those guidelines. Some, including Colorado, Iowa and New York, significantly sped up processing this year.

Others expect federal exemptions for “unusual circumstances.” In Virginia, which first got a trickle of applications from healthcare.gov in late February, 45 percent of applications are past the 45-day limit.

Many states that relied on healthcare.gov to handle applications as well as states that built their own websites are wrestling with backlogs.

In the 36 states whose residents signed up through healthcare.gov, at least 1.4 million people faced delays because the website was unable for months to transmit the information to states. Once it did, states complained they weren’t receiving all of the applications and that data was incomplete or riddled with errors.

The logjams were so bad that officials asked applicants to re-apply directly through the states, where workers often sorted the information by hand. That created duplicate applications for as many as half of prospective Medicaid enrollees in Idaho and Louisiana. Other states disagreed with federal eligibility decisions: Indiana approved only 5 percent of the healthcare.gov applications, Texas approved 17 percent and North Carolina approved 19 percent.

States that ran their own websites, including California and Illinois, also experienced troubles. The new California computer system has technical glitches, including difficulty sending information to counties that help process applications. Because California had a massive campaign urging people to enroll, workers were swamped.

“It’s a very big deal because millions of people are waiting for health care, and these people can’t afford health care,” said Rosenbaum.

Cynthia Carmona, the director of government and external affairs at the Community Clinic Association of Los Angeles County, said that the group has “been having a hard time getting good answers from the state.” She said that some people who applied in October still haven’t heard whether they are enrolled.

“We’re disappointed,” Carmona said. “We’re trying to give them room to fix the issue but this can’t go on forever. We need resolution.”

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