The Obama administration has made 24 unilateral changes to the signature health care law, bungled the rollout, has not yet completed the payment mechanism on the $840 million healthcare.gov website and, according to a government audit, has allowed 92 percent of phony applicants to obtain coverage.
Now the administration is going after a handful of states for not enacting certain provisions of the Affordable Care Act in a timely manner.
The state of Tennessee recently received what some have described as an Obama administration ultimatum. The Center for Medicaid and Children’s Health Insurance Program Services’ letter to Tennessee state officials focuses on the state’s failure to integrate their computer information system with the federal Medicaid application and enrollment system.
This letter, as well as a recent class-action lawsuit against the state, claims that Tennessee is facing an enrollment backlog.
According to the lawsuit, the delay in obtaining approval coverage illegally denies benefits. But Tennessee officials point out that individuals can apply directly to the state’s TennCare program in all of the state’s 95 counties, just as they were able to do pre-Obamacare. In fact, the state has added more than 125,000 new enrollees since January 1.
Tennessee officials also point out that the problems revolve around the healthcare.gov website and the administration’s last-minute directives. That’s why the federal government should shoulder a large part of the blame for these shortcomings, according to Lindsay Boyd, director of policy for The Beacon Center of Tennessee:
“Tennessee’s delay at the state level is due in no small part to the Obama administration’s almost constantly moving targets. The administration is conveniently disregarding their role in this boondoggle and essentially telling Tennessee officials that regardless of who made the mess, it is their job to mop it up or else. It is the height of hypocrisy that the administration fails to abide by the same standards to which it would hold the states.”
According to Tennessee officials, the problems lie with the changes in Medicaid eligibility rules and the short amount of time that states were given to comply with the federal government’s Obamacare requirements. As the administration should understand all too well, building and overhauling information-technology systems to comply with program changes while maintaining integration with the healthcare.gov system is a complex undertaking.
Five other states – Kansas, Alaska, California, Michigan and Missouri – are also in the administration’s sights and received similar letters. While the hypocrisy of this issue is obvious and outrageous, there could be serious consequences for states that fail to meet the federal requirements.
In testimony before the Senate Finance Committee this past spring, then-Health and Human Services Secretary Kathleen Sebelius was asked about what steps would be taken in response to backlogs in Medicaid applications. She replied:
“We are actually kind of ramping up the pressure on states and will look at potentially some administrative reductions in payment if people don’t pick up this pace…”
In response, top-ranking Republicans sent a formal request on May 21 for more information on which states might face a sanction, as well as how severe the sanctions might be. Despite the formal letter, as well as additional repeated requests for a response, members have not received any additional information, according to a senior committee staffer.
This photo of part of the HealthCare.gov website is photographed in Washington, in this Nov. 29, 2013 file photo. Newly released federal figures, as of Nov. 30, 2013, show more people are picking private insurance plans or being routed to Medicaid programs in states with Democratic leaders who have fully embraced the federal health care law than in states where Republican elected officials have derisively rejected what they call "Obamacare." (AP Photo/Jon Elswick, File)
These potential sanctions could be devastating to a state budget.
Allowable administrative expenses under Medicaid average 5.5 percent. But this expense is on top of benefit spending. For example, for every $100 a state spends in benefits, there will be about $5.50 in administrative costs. On average, the federal government pays about $3 of that cost.
For months, the U.S House Committee on Energy and Commerce has been attempting to find out whether the Obama administration intends to sanction states for the Medicaid enrollment backlogs.
Given the administration’s letters to these six states, the committee should go a step further and expand that inquiry into an investigation regarding the origin of those backlogs and the extent to which the healthcare.gov website is directly responsible.
Not only has the administration been dodging the committee’s question for months, but it now seems poised to take further action. There should be little doubt that the administration is more than willing to shift blame elsewhere.
The only question is whether that sort of buck-passing will be accompanied with a hefty financial penalty for states.
Naomi Lopez Bauman is the director of health policy at the Illinois Policy Institute (www.illinoispolicy.org). You can follow her on Twitter at @LopezBauman.
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