Legislators raise doubts about need for Medicaid restrictions

Key legislators have cast doubt on an effort by the state Department of Social Services to restrict eligibility and benefits in a Medicaid program that had been growing at higher-than-expected levels.

In an October “concept paper” sent to federal authorities, DSS officials outlined ways to limit eligibility and scale back benefits in the Medicaid Low-Income Adults program, which serves those earning up to 56 percent of the poverty level. State officials argued that the program, known as LIA, had drawn so many enrollees it was becoming financially unsustainable, and sought input on the possibility of getting a waiver to make changes.

But in recent months, enrollment in the program has declined, and during a meeting of the council that oversees Medicaid Friday, Sen. Toni N. Harp and Rep. Toni Walker suggested that DSS might not need to make any changes.

Harp and Walker, both Democrats from New Haven, co-chair the legislature’s Appropriations Committee, which would have to approve any proposed Medicaid waiver.

Harp said she and Walker had been concerned last year when LIA appeared to be growing significantly, potentially costing more than budgeted. Between June 2010 and August 2011, enrollment in LIA grew by more than 60 percent. But enrollment has since declined, and Harp said that DSS does not appear to be on pace to overspend its budget.

“I would hate to think … that this vulnerable population’s benefits will be reduced or their access to benefits will be reduced based upon problems that exist outside of DSS,” she said.

LIA began in 2010, replacing a program called State Administered General Assistance, or SAGA, which had more restrictive eligibility rules. At the time, state officials expected the move to save money because the state gets federal reimbursement for a portion of its Medicaid costs, while SAGA was fully state-funded. But enrollment grew faster than expected, leading to budget concerns.

In the concept paper sent to the federal Centers for Medicare and Medicaid Services, DSS described several potential changes to limit growth in LIA, including taking a person’s assets into account when determining eligibility, counting family income for 19- and 20-year-olds, limiting the length of nursing home admissions and limiting enrollment if funding does not permit it.

DSS already has legislative approval to change the benefits offered in LIA, but officials have said it’s unclear whether doing so would lead to significant savings. Federal rules prohibit the state from cutting benefits to people considered medically frail.

The concept paper drew criticism from advocates for Medicaid recipients, who argued that it would increase the number of uninsured people in the state.

Advocates have also said that the leveling off of enrollment in recent months suggests that the program addressed a previously unmet need that has now largely been met.

Some also noted that any budget problems are short-term because beginning in 2014, the federal government will pay the entire cost of the program as part of health reform; the federal reimbursement levels will fall beginning in 2017, but won’t dip below 90 percent.

Harp said two years seemed like a short time to wait for the program to generate significantly more federal funds, and said that there did not appear to be a problem to solve anymore.

Mark Schaefer, DSS’ director of medical care administration, said Friday that DSS officials had begun discussions with the federal government, but that they were preliminary.

He added that Connecticut has other options for people who are uninsured, including the state-run Charter Oak Health Plan and an insurance program for people with pre-existing conditions. Both require members to pay premiums, unlike Medicaid.

“It’s not as though we don’t have programs to provide coverage for persons who are uninsured,” he said.