Budget chairwoman threatens to scuttle new restrictions on health care for poor

The House chairwoman of the legislature’s budget panel threatened Tuesday to scuttle new restrictions on health care for the poor sought by Gov. Dannel P. Malloy’s administration after learning patients were warned of changes before they had been enacted.

Rep. Toni Walker, D-New Haven, who not only co-chairs the Appropriations Committee, but also an advisory panel conducting a hearing Tuesday on the changes, charged the Department of Social Services with overstepping its bounds.

“Do not assume that we will not overturn this,” Walker told DSS Deputy Commissioner Kathleen Brennan during a hearing held by the Council on Medical Assistance Program Oversight. “And I say this sincerely. It really angers us.”

The New Haven lawmaker balked at a letter dated June 8 and sent to the nearly 78,000 residents currently served by the Medicaid for Low Income Adults program, commonly referred to as LIA.

“We are writing to advise you that the recently passed Connecticut state budget includes less funding for the Medicaid for Low Income Adults (LIA) program,” the letter states. “Changes in the program require approval by the federal government and would take effect no sooner than Oct. 1, 2012.”

The letter advises patients to prepare for potential loss of coverage.

The bill appropriating $20.5 billion for the entire state budget for the fiscal year beginning July 1 received final legislative approval May 8. But the legislature didn’t reconvene in special session to adopt the policy language needed to implement that appropriations measure until June 12 — four days after the letter was released.

“The fact that this was sent out before we passed the legislation is a problem,” Walker said, adding that she and other council members also heard complaints that patients couldn’t even reach DSS to pose questions because of insufficient outreach staff and jammed voice mailboxes.

“That we have created a panic in a population that is already fragile is a major problem,” Walker said. “It is important that we let the commissioner know that all of those reactions were not appreciated.”

Walker added that sending the letter “negates us as being part of the conversation and it negates the community … and the agency does not have the right to determine things without going through the process.”

“I appreciate your comments and I will take them back to the agency,” DSS Deputy Commissioner Kathleen Brennan said, adding that the agency is working to improve its call-handling capability.

Brennan also said the intent of the letter was to give LIA clients the most time possible to prepare for potential changes.

But Rep. Susan Johnson, D-Windham, the council’s other co-chairwoman, argued that if DSS had wanted to keep clients informed, its letter shouldn’t have failed to mention Tuesday’s public hearing at the Legislative Office Building.

Brennan said a link on the department’s website does list public hearing dates, but Johnson responded: “Do you think that many of the people who need this kind of coverage have access to the Internet in their houses?”

LIA currently serves single adults without minor children and who have incomes at or below 56 percent of the federal poverty level.

The proposed changes include: setting an asset limit of $10,000; counting the income and assets of a parent if a LIA applicant is between ages 19 and 26 and living with a parent or can be declared as a dependent for income tax purposes; and limiting nursing home coverage to 90 days per admission.

Because Medicaid is a federally administered health care program, states seeking to make changes to programs under that umbrella must apply to the U.S. Centers for Medicare and Medicaid Services for approval.

But under state law, even if the legislature has authorized the administration to apply to the centers, the final application must be reviewed by related state legislative panels: the Appropriations and Human Services committees. Should they reject the application, it cannot be filed with the federal government.

A panel of legislators, Medicaid consumers and health care advocates, the council advises the General Assembly on Medicaid waivers and related health care issues.

And several health care advocates who testified Tuesday, including some council members, argued that the application should be scrapped.

“It is hard to swallow the potential of this proposal to terminate coverage for thousands of people at a time when many, if not most of them, will be unable to afford or to find other coverage,” Victoria Veltri, the state’s healthcare advocate, testified. She said 15,000 to 20,000 people would lose coverage through all of the proposed changes.

Veltri also warned against assuming that most young adults still living with their parents come from households that could afford to buy coverage for them if state assistance is removed.

“We don’t even know if any of these parents even have access to coverage” or if they can afford it, Veltri said, charging there is no hard data to support the administration’s plan.

“I don’t think there’s anyone in this room who thinks this is about anything other than saving money,” said Sheldon Toubman, a staff attorney with the New Haven Legal Assistance Association.

The nonprofit has taken legal action on behalf of DSS clients, charging that the agency has failed to process applications for Medicaid and food stamp assistance in a timely fashion. And Toubman said that requests to renew assistance have been improperly terminated by DSS — even though clients submitted the correct paperwork on time — because the agency lacks staff to process applications.

Citing a 2002 report from the legislature’s Program Review and Investigations Committee, Toubman said the department had 845 staffers to process applications in 2002, compared with fewer than 720 now. And over the same period, the Medicaid caseload has grown 70 percent.

“This is an agency that can’t do the basics, that can’t direct the traffic,” he said, adding that, given these challenges, there’s no reason to support changes “that have no legitimate basis on sound health care policy.”

But DSS officials testified that the move is essential to make the LIA program sustainable over the long term.

When the 2010 legislature and then-Gov. M. Jodi Rell converted the former State Administered General Assistance Program into LIA, the caseload was 47,000. It has since grown by about two-thirds and has an annual budget of more than $460 million.

“It’s got to remain,” Malloy said Tuesday of the proposed package of new LIA limits. The legislature’s nonpartisan Office of Fiscal Analysis estimated these changes would save $50 million next fiscal year.

The governor didn’t testify at the council meeting but took reporters’ questions after his monthly meeting with department commissioners. “We have greatly exceeded enrollment” in LIA, he said.

Malloy added that the goal of the proposed restriction for young adults living with their parents is to target families who can afford to send their children to college but are taking advantage of public aid for the poor so they don’t have to buy more costly health insurance through a college or university.