After advocates for mentally ill and disabled residents warned that a new plan to limit the number of people receiving state Medicaid benefits would hurt that population in particular, the state has somewhat modified its plan.

DSS spokesman David Dearborn said the agency would revise its planned application to the U.S. Centers for Medicare and Medicaid Services regarding the Medicaid for Low Income Adults program, known as LIA.

The first draft of the application would have made adults ages 19-26 who live with their parents ineligible, provided that their income and their parents’ income exceeded 55 percent of the federal poverty level. Advocates said that would effectively remove virtually all recipients in that age category still living with their parents.

But the department is revising the application it will submit later this month. It no longer will count any parental income unless it’s more than 185 percent of the federal poverty level. Any portion above that would be added to the young adult’s earnings to see if the sum exceeds 55 percent of the poverty level.

A family of three would need to earn more than $35,316 to exceed 185 percent of the federal poverty level. And 55 percent of the poverty level represents just $6,143 per year for an individual.

In addition, the department would not count any parental income if the household can show it could cost more than 10 percent of its total income to buy private insurance for members ages 19 to 26, Dearborn said.

Even with these changes, health care advocates say they remain wary of a plan expected to cancel eligibility for more than 13,000 LIA recipients.

“Many of the people we’re worried about are not working, or are one step away from homelessness,” Kate Mattias, executive director of the National Alliance on Mental Illness’s Connecticut chapter, said last week.

Mattias said one of the dangerous assumptions that state officials are making is that adults ages 19-26 who live with their parents aren’t at great risk since the restrictions apply only until January 2014. At that point, national health care reform rules increase funding for Connecticut’s LIA program.

When it comes to mental illnesses, “these are not people who can go without medication in many instances, even for a few months, and still function,” she said. “You stop the medication and that person’s health is at risk.”

There are typically between 5,000 and 7,000 adults ages 19-26 at any given time receiving services through the state Department of Mental Health and Addiction Services, Mattias said, adding that many live with parents who struggle with poverty as well.

And anti-psychotics, mood stabilizers, or medications to treat schizophrenia or depression, can cost several hundred dollars, or even more than $1,000, each month, she said.

“Anybody who has a chronic illness has a delicate, delicate balance,” said Molly Cole, director of the state’s Council on Developmental Disabilities.

People who need medications to control epilepsy or glaucoma can’t afford to lose their treatment even for a few months, she said. “Even an accidental drop for a short period in their medication would have a big impact,” Cole said.

LIA provides health benefits to single adults who are without grown children and who earn less than 56 percent of the federal poverty level. Enrollment has shot up in Connecticut over the past two years from about 47,000 to nearly 78,000.

To control costs, the administration has proposed two eligibility restrictions. Besides the revised income guidelines for young adults living with their parents, it also wants to set a household assets limit of $10,000.

If the federal centers approve these changes, the state would work between October and December to identify the newly ineligible.

Administration officials also say the changes should save the state about $50 million before the fiscal year ends on June 30.

But some health care advocates have said they fear 15,000 or more LIA recipients could lose coverage, for several different reasons.

Parents whose earnings barely exceed 185 percent of the federal poverty level still might not be able to afford private coverage for their adult children, advocates argued.

A health care advocacy group is also suing the state, charging that the Department of Social Services has failed to process Medicaid assistance applications on time. 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 record this paperwork in its data processing system.

And despite assurances from DSS Commisisoner Roderick Bremby that more than 120 new staffers were added in March — and permission to add another 100 was just granted — some fear the proposed new income limit and assets test will create another wave of paperwork that will swamp the department.

The result, critics say, could be more clients improperly removed from the LIA rolls for months before errors are discovered and corrected.

And even though the restrictions would be lifted by January 2014, Sharon Langer, a senior policy fellow with the New Haven-based Connecticut Voices for Children, said past research shows the damage they cause in the interim could linger more than state officials expect.

A 2006 study by Connecticut Voices found that enrollment in HUSKY, the state-subsidized health coverage program for poor families, dropped by 25,000 people in 2005 — including 18,000 kids — despite census data showing the number of Connecticut residents needing health insurance was climbing.

Keith has spent most of his 31 years as a reporter specializing in state government finances, analyzing such topics as income tax equity, waste in government and the complex funding systems behind Connecticut’s transportation and social services networks. He has been the state finances reporter at CT Mirror since it launched in 2010. Prior to joining CT Mirror Keith was State Capitol bureau chief for The Journal Inquirer of Manchester, a reporter for the Day of New London, and a former contributing writer to The New York Times. Keith is a graduate of and a former journalism instructor at the University of Connecticut.

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