Attorneys seek injunction to stop Medicaid eligibility changes

Attorneys representing Medicaid recipients are seeking an injunction to stop the state from moving forward with plans that could cause up to 13,000 poor adults to lose health care coverage. They argue that the changes the state is pursuing could worsen delays in processing paperwork for all Medicaid recipients and applicants.

The motion, filed in federal court in Hartford Thursday, is the latest attempt to fight changes in Medicaid eligibility intended to save $50 million in this year’s state budget.

It was filed by attorneys with the New Haven Legal Assistance Association, who are suing the state Department of Social Services over delays in processing Medicaid applications. They say people have been left without coverage and needed health care, including medications and surgeries, because DSS has not processed their paperwork within federally required time frames.

Adding a new scheme of eligibility requirements to an understaffed department will make the backlogs worse, they argued, diverting the efforts of workers and delaying plans to modernize the technology they use to handle applications.

Sheldon Toubman, an attorney for the New Haven Legal Assistance Association who prepared the request for injunction, said the eligibility changes are not likely to eliminate many people, but that looking for those who won’t meet the new criteria will “gum up the entire works.”

“In trying to find the needle in the haystack, requiring every single applicant and current enrollee for [the program] to produce and then have reviewed their asset information — it’s just going to set this further back,” he said.

The filing also takes issue with the idea that the eligibility changes are needed to save $50 million, citing an internal administration e-mail that the savings estimate was reached “without any detailed analysis to support that figure.”

“The concern is mistaken because either way, there’s going to be a substantial hole in the budget,” whether the changes take place or not, Toubman said.

DSS spokesman David Dearborn called the legal action “disappointing,” and said the department is required to make changes to the program under legislation passed this year.

“That’s the current public policy of the state,” he said.

The proposed changes, which require federal approval, would affect a program known as Medicaid for Low-Income Adults, or LIA. It serves about 78,000 adults without minor children who earn less than 56 percent of the poverty level. Since the state created the program in 2010, it has consistently gone over budget, drawing more enrollees than expected.

State officials are seeking to narrow eligibility in the program in two ways.

One is to require enrollees to have fewer than $10,000 in assets. There currently is no asset limit, and officials in Gov. Dannel P. Malloy’s administration have said that allows wealthy people with low incomes to receive free state coverage.

The other change would affect applicants under 26 who live with a parent or could be declared a dependent for tax purposes. For them, the parent’s income and assets could be taken into account in determining eligibility.

Administration officials have called LIA financially unsustainable, but critics of the plan to scale it back say doing so will increase the number of uninsured, and that the state’s fiscal challenges are temporary. Beginning in 2014, the federal government will pay the full cost of coverage for LIA enrollees as part of the health reform law. Currently, the federal government pays half.

The request for injunction filed Thursday focuses on the potential impact the changes to LIA — also known as HUSKY D — could have on the social services department’s ability to process Medicaid applications.

It says the new eligibility tests would be “immensely complicated and time-intensive for workers,” particularly in cases where parental income and assets must be verified for an applicant.

“These new eligibility criteria will have dire consequences not only for HUSKY D applicants and recipients but for the entire population of Connecticut Medicaid enrollees and applicants,” the attorneys wrote.

The filing also cites acknowledgments by DSS officials that the new eligibility requirements would be problematic. DSS is in the process of “modernizing” its technology, which officials say will help improve application processing. But implementing eligibility changes for LIA would “drain” resources from the modernization effort, the filing says, citing the words of the department’s IT director.

It also cites the view by DSS, summarized in notes of an analyst in Malloy’s budget office, that adding the asset test and counting family income would be problematic to implement, “given staffing shortages, the lawsuits already filed due to DSS’ in ability to process applications in a timely manner, and the required [eligibility management system] changes that would take away from the departments’ modernization efforts.”

Dearborn said social services Commissioner Roderick L. Bremby has assured legislators that the department will take special measures when implementing changes to LIA, including hiring a contractor to help get the needed information. Most current LIA enrollees will be allowed to declare their assets and, when necessary, parents’ information, providing verification only when their cases are up for renewal. New applicants would have to provide verification. 

In addition, Bremby said the department is working to get more applications and redeterminations processed on time, including hiring staff to process Medicaid cases and designating staff to immediately initiate redeterminations when clients submit information, ensuring they don’t lose coverage.