HealthCare.gov defects leave many Americans eligible for Medicaid, CHIP without coverage

More than 100,000 Americans who applied for insurance through HealthCare.gov and were told they are eligible for Medicaid or the Children’s Health Insurance Program (CHIP) remain unenrolled because of lingering software defects in the federal online marketplace, according to federal and state health officials.

To try to provide coverage to these people before they seek medical care, the Obama administration has launched a barrage of phone calls in recent days in 21 states, advising those who applied that the quickest route into the programs is to start over at their state’s Medicaid agency.

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State officials, meanwhile, are racing to cope in various ways — some enrolling people based on imperfect data files they received from Washington, others mailing letters urging eligible people to contact the state to sign up.

The chaos is likely to prove temporary because of the state and federal efforts that have just begun to help people enroll and because the coverage can be made retroactive to the first of the year.

Still, the fact that some consumers learned on HealthCare.gov that they could join the two programs but are not yet in them is creating a problem for states and confusion for the consumers. The situation also offers a glimpse of the technical problems that persist with the computer system underpinning the new federal online insurance marketplace more than a month after the Obama administration announced it had largely been fixed.

“It would be ideal if we didn’t have to go through this,” said Jeremiah Samples, assistant secretary of the West Virginia Department of Health and Human Resources. The department is mailing letters to 10,000 residents indicated by federal records as eligible for coverage under a Medicaid expansion, telling them to apply through a state Medicaid Web site. “For our consumers,” he said, “when the system doesn’t work for them, it just adds unease.”

The Idaho Department of Health and Welfare has assembled a team of five workers to send letters to 6,000 people identified through federal records, urging them to submit applications to the state, spokesman Thomas Shanahan said. Agency officials and their mail contractor worked on New Year’s Day to prepare the materials so they could be sent first thing Thursday morning, he added. The Centers for Medicare and Medicaid Services (CMS), the agency responsible for the federal health exchange, has been making calls to those same households.

“I think people are resigned to the fact that we have a tremendous amount of work ahead of us in the next few months. It is not going to be easy,” Shanahan said. “But we have to get this right from the beginning or the frustration will continue.”

White House senior communications adviser Tara McGuinness said the issue “impacts a small fraction of Americans who will have access to health care from Medicaid.”

McGuinness noted that 3.9 million people around the country were found to be eligible for Medicaid or CHIP on the state level during October and November, a figure that includes new registrants and renewals. The more than 100,000 people who have not made it into the programs are among nearly 270,000 who applied through HealthCare.gov during that period and a still-unreported number in December who were informed that they qualified for Medicaid or CHIP.

McGuinness predicted that everyone who qualifies for the coverage will be enrolled soon. “One hundred percent of those who are having issues are being contacted by us or the states,” she said. She also pointed out that some people might benefit from another part of the Affordable Care Act that has just taken effect, which expands hospitals’ latitude to enroll certain patients in Medicaid for three months while they apply for the program.

The Medicaid problem affects two groups of people who sought coverage through the new federal exchange and were steered, based on their income, toward the two public insurance programs instead of private health plans.

One group consists of consumers in the 26 states that have expanded their Medicaid programs and for whom new coverage should have begun Jan. 1. The other is low-income people around the country who decided to apply during the past few months because federal law now requires most Americans to have health insurance.

The problem is that a basic feature of HealthCare.gov is not yet working. In the federal insurance exchange, on which three dozen states rely, consumers who apply for coverage submit information about their income. The system then tells them whether they qualify for a federal subsidy to buy a private health plan or, alternatively, whether their income is low enough that they belong in Medicaid or CHIP, public insurance programs that are a shared responsibility of the federal government and states.

When people qualify for those programs, the system is supposed to transfer their application to a computer system in their state and enroll them automatically. Software defects are preventing that from happening.

As a result, those consumers have been told since the site’s Oct. 1 launch to contact their state Medicaid agencies. Neither federal health officials nor those in individual states have been tracking how many have done so.

In recent weeks, CMS has been working with 10 states — chosen because their computer systems were thought to be best able to receive the federal data — to test the automatic transfer and try to get it working.

Interviews with Medicaid officials in most of the 10 states indicate that the effort got off to a rocky start. The idea at first was for CMS to try sending records containing information on about 200 people eligible for Medicaid to each of the 10 states, but the goal was winnowed to 50 records and then to 10, and even fewer in some places. Some of the records sent did not arrive, and some that did contained errors, including people with addresses in other states, according to state Medicaid officials.

In Tennessee, for instance, only three of 10 records arrived the first time CMS tried sending them in mid-December, and the rest disappeared. Shortly before Christmas, CMS attempted to send 10 more and none arrived, according to Tracy Purcell, TennCare’s director of member services. Delaware, meanwhile, received five of the first 10 attempted transfers, according to Stephen Groff, the state’s director of Medicaid and Medical Assistance.

As it became clear by late fall that the automatic-transfer system might not be working in time, federal officials and states began to devise contingency plans. One was to let states use “flat files” that CMS would send, containing rudimentary information about people from the state, some of whom appeared to be eligible for Medicaid.

These files originally were not intended as a basis for enrollment but to give states a rough idea of what to expect when the automatic transfers began. By the end of November, however, CMS officials gave the 26 states expanding Medicaid the option of relying on these files to enroll people in Medicaid. Five states accepted that option and have been pouring everyone who appears eligible onto their Medicaid rolls; they are sending out letters informing people that they are in the program.

Other states, however, have found problems with the interim files. The New Mexico Human Services Department is contacting 15,361 people based on the records, spokesman Matt Kennicott said, but it first had to weed out 45 names of people with addresses outside the state.

In West Virginia, the Medicaid expansion requires some patients to pay for part of their care, depending on their income. But Samples said the files have not contained the income information needed to figure out who must make co-payments.

In Pennsylvania, Medicaid officials decided late last week that they could no longer hope that the automatic transfer would start in time. So on New Year’s Eve, spokeswoman Kait Gillis sent a consumer alert: “Thousands of low-income Pennsylvanians who applied through the federal government’s website and were determined eligible or potentially eligible for Medicaid or Children’s Health Insurance Program (CHIP) coverage may find out they were not enrolled as anticipated as of Jan. 1.”

The alert tells people they will get a phone call asking them to apply to the state’s Department of Public Welfare and “asks for patience from these customers, as [the agency works] to manually process the more than 25,000 applications affected by the file transfer issues.”

Other states, including Alabama and Nebraska, are relying entirely on CMS to encourage people eligible for Medicaid or CHIP who enrolled on the federal Web site to apply now through their state’s agency.

Federal officials are still working on the automatic transfers and have begun to make some headway with small samples of the many thousand pending records. New Mexico received 162 of the 200 accounts CMS sent electronically Friday, while technical problems plagued the rest. Delaware received all 200 accounts transferred the same day, which Groff called “a great first step.”

Andrea Maresca, director of federal policy for the National Association of Medicaid Directors, said CMS officials have not told states when the computer system can be expected to start working as it should. But given that federal officials were encouraging states as recently as Christmas week to use the interim files as a backup plan, Maresca said, “one could read it to say it’s going to be some time.”

In addition to the Medicaid troubles, insurance industry officials say the computer system continues to be unreliable in generating enrollment reports for health plans so that they know who their new customers are.

And now that the coverage has taken effect this past week, another defect in the federal exchange has come into focus: It cannot adjust coverage to reflect changes in people’s lives such as a new baby or a new address.

CMS spokesman Aaron Albright said agency officials “are currently working with insurers to find ways to make changing coverage easier while we develop an automated way for consumers to update their coverage directly” through the federal system.

 
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