Malloy gets implied OK to pursue restrictions on health benefits for the poor

Two state legislative panels will give Gov. Dannel P. Malloy the green light to eliminate Medicaid benefits for more than 13,000 of Connecticut’s poorest residents — but they will do so without a vote.

Sen. Toni Harp, D-New Haven, co-chairwoman of the Appropriations Committee, said Monday that neither her panel nor the Human Services Committee will meet again before Aug. 18. That’s the deadline they face to block an administration application for federal approval to tighten eligibility in the Medicaid for Low-Income Adults program, known as LIA.

“There are certainly some that are unhappy that some people will be dropped (from coverage),” Harp said. “But we really needed to find the [budget] savings.”

Harp, from New Haven, was one of several Democrats from Connecticut’s urban centers who expressed dismay with the plan, which would drop nearly 13,400 LIA recipients from the program in January by setting new eligibility standards for young adults and through a new assets test.

Rather than embarrass the Democratic governor publicly by rejecting his plan, majority Democrats on the two committees adjourned their joint meeting July 24 when it became clear there weren’t enough votes to endorse the cutbacks.

But Harp added Monday that legislators also aren’t eager to punch a $50 million hole in the state budget that began just five weeks ago. That’s the savings the administration says the eligibility changes will yield this fiscal year — a savings that legislators already assumed in the $20.5 billion state budget they adopted last May.

“It’s not the best, but that’s the tough decision we had to make,” she said.

Still, the new Medicaid restrictions are particularly difficult for Democrats from the state’s poorest cities in a legislative election year. Many of those expected to be lose LIA coverage are their constituents.

LIA serves single adults who have no minor children and whose incomes are at or below 55 percent of the federal poverty level.

To control costs, the administration has proposed two eligibility restrictions:

  • If a LIA applicant is between ages 19 and 26 and lives with a parent or can be declared as a dependent for income tax purposes, then the parent’s income and assets can be factored in when determining if the applicant is eligible.
  • An assets limit of $10,000.

Health care advocates say there is no evidence that most of these recipients will be able to buy private health insurance.

Sheldon Toubman, a staff attorney with the New Haven Legal Assistance Association and one of the most vocal critics of the proposed changes, said he fears that because of longstanding staffing shortages at the state Department of Social Services, the numbers who lose coverage may be greater than projected.

Toubman’s group has sued the state on behalf of DSS clients, charging that the agency has failed to process applications for Medicaid and food stamp assistance in a timely fashion.

But Harp noted that Social Services Commissioner Roderick L. Bremby testified that the department has taken several steps to ensure the new eligibility rules are administered promptly and correctly.

  • The department added about 120 new staffers in March and recently got permission to add another 100.
  • The department also will work with a private contractor to notify all LIA recipients and gather income and assets information to help reassess their eligibility.
  • And certain staff in each agency branch office have been told that processing the new eligibility information is a priority.

“We were satisfied with their answers,” Harp said, adding that legislators will closely watch the program.

“As the commissioner assured committee members at the public hearing and subsequent meeting, the department is preparing the various measures needed to implement the eligibility changes, pending federal approval,” department spokesman David Dearborn said Monday.

“We appreciate the concerns Senator Harp and others have been expressing regarding this issue,” added Brian Durand, a spokesman for Malloy’s chief budget and policy agency, the Office of Policy and Management. “These are difficult choices and we are committed to managing them carefully.”

But, “Even with the new hiring the agency is woefully understaffed,” Toubman said Monday, adding that the department has been staffed insufficiently for more than a decade.

And while a private contractor can help the department collect data on LIA clients, according to federal Medicaid rules, only state social service employees can process the clients’ information and determine which ones remain eligible for benefits.

Toubman added that the new LIA restrictions still are not assured. Because they involve a program under the federal Medicaid umbrella, the Malloy administration must seek approval from the U.S. Centers for Medicare and Medicaid Services. A final ruling on the state’s application is expected by October.

“It’s definitely not a sure thing,” he said, adding that the federal government generally approves Medicaid waivers if they serve a research purpose, such as identifying a better way to serve clients, improve access to health care, or enhance efficiency. “This is about cutting people off to save money,” he said.

Malloy, who is dealing with a state economy recovering at a slow pace, is trying to keep the budget in balance and avoid having to consider tax hikes. But there aren’t many places left to cut the budget outside of social services.

The 2011 concession deal with state employee unions bars the governor from imposing layoffs on most bargaining units. That deal also calls for most workers to get a 3 percent wage increase starting in 2013-14.

The governor also committed last spring to increase spending on labor, particularly to expand contributions to the long-neglected, cash-starved state employee pension fund.

Municipal aid, another big section of the state budget, is politically off-limits for the most part, with both parties opposed to deep cuts in this area.