Al Gore thinks George W. Bush has a lousy record on health care. And Exhibit A is the way the Texas governor has administered Medicaid. On September 5, the Democratic National Committee unveiled an ad spotlighting a federal judge's recent ruling that Texas violated a 1996 agreement to make major improvements—including stepping up outreach and offering transportation to medical appointments—to its Medicaid program. "The Bush record," the ad's narrator intones. "It's becoming an issue." That same week, Gore's running mate, Joe Lieberman, traveled to Houston to denounce the bureaucratic hurdles that prevent many Texans from enrolling their children in Medicaid. Declared Lieberman: "Texas actually ranks forty-ninth of fifty states in providing health insurance for kids."
But whose fault is that? While it's true that Bush has responded pitifully to the plight of his state's 1.4 million uninsured children, what's going on in Texas is merely an extreme example of what's happening in other states. All over the country, the needy are discouraged from getting the health care benefits to which they're entitled. And for that the Clinton-Gore administration—which anticipated the problem but has been appallingly slow to address it—is also to blame.
It used to be that families who received cash assistance from the government automatically received Medicaid as well. But that changed in 1996, when welfare reform "delinked" the two forms of aid. The poor, Congress decided, were not entitled to welfare. But they were still entitled to health coverage, and losing the former should not mean losing the latter.
Since then, welfare caseloads have dropped all over the country, leaving state budgets swollen with unspent federal welfare dollars. Caseload declines are the kind of statistic politicians love to crow about. What they tend not to mention is that Medicaid enrollment, which the 1996 law vowed to protect and even expand, has also plummeted, and not just because fewer people need coverage. As health care analyst Marilyn Ellwood concludes in "The Medicaid Eligibility Maze"—a 1999 study jointly funded by the Urban Institute and the Kaiser Commission on Medicaid and the Uninsured—"Medicaid priorities to maintain and even expand enrollment seem to be in direct conflict with welfare reform efforts to substantially reduce enrollment."
Part of the problem is that delinking has made getting Medicaid a bigger bureaucratic hassle. Now, in addition to the headaches that applicants for the huge government program already face—complicated eligibility guidelines, inconvenient office hours, language barriers for non–English speakers—there are administrative hurdles specifically related to its delinking from welfare. In several states, for instance, computer systems have dropped people from Medicaid when their welfare cases were closed, necessitating a cumbersome process of outreach and reinstatement.
The delinking has also caused public misconceptions. Aware of newly stringent welfare rules, many poor Americans simply don't realize Medicaid may still be available to them. Even worse, local caseworkers, often seeing it as their job to divert applicants from all forms of public assistance, haven't always told them otherwise. In 1998, for instance, seven poor New Yorkers filed a class-action suit claiming that workers at the city's "job centers" (converted welfare offices where aid is contingent upon tough job-search requirements) had improperly delayed applications for Medicaid and food stamps, both of which are federal entitlements not subject to work requirements. A federal judge imposed an injunction against the expansion of New York's job centers until the delays had been corrected; in July, the injunction was upheld.
Congress anticipated this kind of thing. Its 1996 law even set aside $500 million in matching funds to help states address the problems delinking would create. In May 1997, the Clinton administration's Health Care Financing Administration (HCFA) sent a letter to state Medicaid directors reminding them of the funds' availability and uses.
But states haven't availed themselves of the funds: as of March 2000 only 30 percent of the money had been spent, and five states had not claimed a single dollar of their allocations. The reason? Because the feds, in their less-than-crystal-clear instructions to local officials, seemed to narrowly prescribe the ways the money could be spent. Maryland Medicaid officials, for instance, didn't believe their state was eligible for the money since it had kept its welfare and Medicaid programs running side by side in the same office. Even in Pennsylvania—which had spent 70 percent of its allotment by the end of fiscal year 1999–2000—state Medicaid officials were wary of using the money to run TV spots advertising Medicaid. According to George Hoover, director of the division of health services at the Pennsylvania Department of Public Welfare, state officials thought that for the spots to qualify for matching funds, they'd have to specifically mention the delinking of welfare and Medicaid, which would continue the very association—and stigma—of the two programs that delinking itself was supposed to eliminate. "Even though [HCFA] provided a framework, there were still some questions that states had," says Hoover. "There was not a real good mechanism for getting those issues clear."
On top of their vague directions, the feds placed a three-year window on states' access to the $500 million fund. Ned Wollman, a Maryland Medicaid official, notes that states were reluctant to initiate costly and time-intensive administrative changes (like overhauling computer systems) when the federal matching funds might expire before the overhauls were completed.
Last fall HCFA convinced Congress to lift the deadline. And in January the agency sent another letter to state Medicaid directors about the fund, addressing confusions and emphasizing the "wide range" of ways to spend the money. On April 7, HCFA went further, urging states to "explore and exhaust all possible avenues of eligibility." This new flexibility and clarity, along with the removal of the deadline, has finally encouraged states to start spending their allotments.
But, while the Clinton administration—and, to be fair, the states—have dithered, scores of low-income Americans have lost their health care as a result of welfare reform; a study by Families USA put the number at 675,000 in the first year alone. Of these, 62 percent were children, most still eligible for coverage. And only a fraction of them will ever get it back. "In retrospect, given the problems identified, would we have liked to come out with the April 7 letter earlier? Yeah," concedes Cindy Mann, director of Family and Children's Health Programs at HCFA's Center for Medicaid and State Operations. "I regret that we're where we are right now."
