Executive Summary
Until the nation adopts a comprehensive national strategy on health insurance coverage, it is imperative that current public health insurance programs provide low-income Americans with stable and effective coverage options. For beneficiaries of public programs like Medicaid, stable health coverage is associated with better access to appropriate cost-effective care; for states, health plans, and providers, it is associated with lower administrative costs. Yet some public program features can undermine these objectives—for example, by requiring individuals to provide proof of citizenship and identity when applying for or renewing benefits, as federal Medicaid rules adopted in mid-2006 specify.
This report examines the impacts that citizenship documentation rules have had on coverage stability in seven states' public programs for children and families. It finds these rules have made it harder for many people to obtain and keep public health insurance coverage. The requirements have increased the complexity, administrative burden, and costs of enrollment and renewal in each state—in some cases curtailing ongoing efforts to simplify processes, as resources were diverted for citizenship documentation purposes. The rules' specific effects on applicants and enrollees, however, differed in each state, depending on the state's circumstances, the approach it took in implementing the rules, and its organizational and technological capacity.
In Alaska, the human impact of the rules has been clearly evident. Enrollment among Alaska Native children, all of whom are citizens, declined by more than 10 percent in the six months following the policy change. The need to present original documents complicated not only applications but also renewals; the latter are processed primarily by mail, but families have been reluctant to send original documents in this manner. The state estimates that processing costs increased by $8.25 for each application and $7.00 for each renewal, reflecting additional time spent by eligibility workers and clerks as well as increased copying and postage costs. There was more stress on the Alaskan eligibility system in the early months of the new policy than in most other states, because eligibility certifications for children are conducted in Alaska twice as often (every six months, as opposed to annually). As many as 54 percent of cases were closed at renewal in the six months following the policy change, and extra administrative costs were incurred for cases that were closed and then reopened.
Arizona is one of a handful of states whose legislature provided funds for implementing the citizenship documentation rules. An allocation of $10.4 million was used to help procure documents, place staff in Medicaid office lobbies to copy documents, train eligibility workers, and establish a troubleshooting unit to solve problems related to citizenship documentation. The state saw little change in enrollment. By the fall of 2006, however, less than half of Arizona KidsCare applications were processed in a timely manner, down from 70 percent at the beginning of the year. This was likely the result not only of citizenship documentation requirements but also of other factors: conversion to a new eligibility system, high staff turnover, implementation of a new family premium structure, and a community outreach campaign. To process applications more efficiently, the state piloted the use of electronic applications and a "virtual office" program that allows some eligibility workers to work from their homes.
Kansas reported a substantial decline in enrollment for HealthWave, which includes both the Medicaid and SCHIP programs, after the citizenship documentation rules were implemented. The decline was much greater for non-Hispanic than Hispanic enrollees. Hispanic citizens may recognize, as a practical matter, that it is useful to have citizenship documents available. In the months after the policy change, the state had to establish backlog policies for the first time; the proportion of applications pending had held steady at one or two percent for the first half of 2006, but by four months after the change it had climbed to 46 percent. The backlog eased somewhat when the state stopped requiring citizenship documentation for SCHIP applicants, and it was later reduced considerably when $1.2 million provided by the legislature was used to add 13 new staff for processing applications and renewals.
Over the past several years Louisiana made the stability of coverage for Medicaid enrollees a high priority even as the state was struggling to recover from Hurricane Katrina. But the citizenship documentation rules posed new challenges. Whereas the state had made steady progress in reducing coverage gaps for children, the proportion of children with gaps now increased. Before the new policy went into effect, only about a third of renewals required the use of paper forms—the state routinely conducts simpler and less costly telephone or "ex parte" renewals, which use existing and readily available information—but after the documentation requirements took hold (in July 2006) forms were required for 43 percent of renewals. Changes to simplify the renewal process had kept the closure rate at renewal close to 10 percent throughout 2005 and early in 2006, but the rate reached a high of 23 percent in October 2006. Louisiana was better prepared than many other states when citizenship documentation rules came into play because it already used an electronic case record system. Eligibility workers had real-time access to vital records, and they were already scanning and saving documents electronically. The state could review procedural closings, sorted by eligibility worker, to determine where additional training and technical assistance could be most useful; after such interventions, the proportion of procedural closings at renewal decreased substantially. Officials in Louisiana also note that the electronic system has reduced administrative costs.
After the citizenship documentation rules took effect in Ohio, monthly enrollment reports showed both a decrease in the number of new members approved for coverage and an increase in the number of enrollees leaving the program at renewal. Moreover, the proportion of pending applications and renewals grew. Officials estimate that in the state's Child and Family Coverage Medicaid program, administrative costs associated with the first year of the new rules exceeded $8.5 million. Because no additional funds were appropriated, implementation of the rules entailed resources that had been intended for other activities.
Medicaid enrollment in Virginia increased every year from 2003 through 2007, with the exception of 2006, when citizenship documentation rules were implemented. The data also show that—again, with the exception of 2006—enrollment grew in the fall, when outreach campaigns coincided with the start of school. As elsewhere, Hispanics were less affected by the new rules than others in Virginia. In focus groups conducted shortly after the rules' implementation, eligibility workers reported that parents had more questions than usual regarding the application process as well as the options available should their children need health care services while waiting to be enrolled. In response to a telephone survey, 40 percent of parents whose children needed health care during these periods reported that the kids did not get all the care they needed. Parents who did seek care for their children at such times said they were more likely to go to emergency departments, drop-in facilities, and health centers or clinics and less likely to use a private doctor's office than when their children are covered. These findings suggest that continuity of care may have been compromised and that at least some young patients received care in costlier-than-usual settings.
Several factors likely contributed to the relatively stable enrollment in Washington following implementation of the citizenship documentation rules. Some $2.6 million in state and federal matching funds had been allocated to the process; a Citizenship Central Unit was established to help current and potential program participants document citizenship; and the state conducted electronic "batch" matches, four times in the first year, to find birth certificates for applicants and enrollees. Batch matches accounted for more than three-quarters of verifications. This approach not only promoted coverage stability but also saved a great deal of time for workers in the field and at the Central Unit. Eligibility workers continue to have access to information online for in-state birth certificates.
This study primarily focuses on the consequences, in seven states, of implementing the citizenship documentation rules. But the research is also pertinent to any policy that increases the complexity of the enrollment and renewal processes, thereby making it more difficult for individuals to obtain and keep public coverage.