Careless Cutoffs

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Child Health Plus has been a savior for Bonnie Ray since she signed up her 4-year-old son for state-run health insurance. Without it, she says, he would not be able to go to the doctor or take medication when he gets sick.

But in March, she received unexpected bad news: The city Human Resources Administration had cut her son off the plan. The agency claimed Ray had failed to send in the required renewal forms–but she knew she had spent hours filling them out and dropped them in the mailbox before the deadline months earlier.

“I was very frustrated,” she says.

Ray is one of thousands of low-income New Yorkers who have lost Medicaid or Child Health Plus insurance for months at a time because of foul-ups with the city’s renewal process.

In theory, the problem was taken care of last year. In January 2002, the state legislature passed a bill allowing Medicaid recipients to reregister by mail rather than requiring that they come in for an in-person meeting. The new law also scaled back the documents needed to renew, eliminating Social Security cards and certain financial statements.

The reason for the change: According to HRA, 50 percent of the 24,000 New Yorkers on Medicaid each month were falling off the rolls when the renewal period came around. Under state law, Medicaid recipients must reapply for benefits every year.

But more than six months after the city inaugurated the new system, the reenrollment rate has barely budged. In March, city officials announced that only half the city’s Medicaid recipients had reenrolled–no better than in prior years. By July, the response rate had inched up to 55 percent.

“It’s still not what it should be,” says Beth Ostheimer of the Children’s Defense Fund. “There’s still an awful lot of documentation that doesn’t need to be there.”

To help more than 100 of her clients who’ve lost coverage, Legal Aid Society attorney Elisabeth Benjamin has been taking their cases to HRA. While she says the agency has successfully resolved most of these cases–including Ray’s–she adds, “We’re very concerned that this doesn’t address the needs of the thousands of people who are just being cut off and don’t happen to get into Legal Aid.”

So she has asked the city to extend the grace period for processing renewal packets from five days to 10, to allow for delays in mail delivery. And she hopes the renewal process can be streamlined further to require even fewer documents and to shorten the 14-page application.

HRA’s response so far: It plans to work with a professional mailing house and to develop a voice-response system that will call consumers to remind them to recertify. Benjamin is waiting to see how that pans out. If the retention rates stay low for another six months, she warns, Legal Aid may file a lawsuit.

The city and state may also soon have to contend with managed-care companies. “Plans are extremely frustrated, and probably for the last three years their number-one priority… has been to address the problem of enrollment-churning,” says Deborah Bachrach, an attorney representing the New York State Coalition of Prepaid Health Services Plans.

HMOs invest heavily in enrolling new members. But the stakes are not just financial, says Kathryn Haslanger, director of policy analysis for United Hospital Fund. “Churning challenges the whole model of managed care, which is to invest in prevention to get benefits down the line,” says Haslanger.

For the last few months, Health Plus, an HMO, has been calling its clients to let them know their renewal dates are approaching. “The non-recertification rate had been extremely high,” says CEO Tom Early. “We thought it would be in everyone’s best interest to reach out.” Since then, he says, the company’s recertification rate for Child Health Plus A has reached about 70 percent.

Other companies have hired new staff to handle similar outreach efforts. Meanwhile, the HMOs are planning to lobby the state to come up with a way to make sure eligible Medicaid recipients can reenroll.

“Our hope would be by the fall we have enough data to demonstrate that there’s a continuing problem with enrollment-churning, which would put us in the position to go back to the legislature when they reconvene in January,” says Bachrach. “We would hope to be able to resolve it short of litigation.”

Ray hopes something will prevent a health care cut-off in the future. “The mail-in program is a good idea if it’s going to work, but they need to get a better system to support that idea.”

Emily Biuso is a Brooklyn-based freelance writer.