By Nic Horton, Jonathan Ingram, and Josh Archambault
Arkansas’ Obamacare expansion has been a policy disaster and a political landmine, but supporters may have to add violating federal law to their list of problems. Internal e-mails from the Arkansas Department of Human Services reveal that the state has not bothered to verify that individuals enrolled in Obamacare’s Medicaid expansion are still eligible for benefits. This revelation comes with several legal and policy implications and should serve as a wakeup call to state legislators across the country.
Arkansas Hasn’t Verified Eligibility Of Obamacare Expansion Enrollees
Internal e-mails from the Arkansas Department of Human Services reveal that Arkansas has yet to begin verifying whether individuals enrolled in Obamacare’s Medicaid expansion are still eligible for benefits.
Federal law requires states to verify Medicaid enrollees’ eligibility at least once per year, and more frequently if the state receives information indicating they may no longer be eligible. But John Selig, director of the Arkansas Department of Human Services, recently admitted that not a single redetermination had ever been done for those enrolled in the Medicaid expansion.
Selig explained that he hopes to begin eligibility verification later this month, but the state began enrolling individuals in the expansion in October 2013 – more than 18 months ago. Really, the state should have already begun checking eligibility.
We spoke with the former Chair of the Legislative Joint Auditing Committee Senator Bryan King about the situation:
As someone who is very concerned about protecting taxpayers and the truly needy, I’m outraged. I think this whole development raises questions about the integrity of our entire welfare system in Arkansas. Honestly, I think it calls in to question the competence of those leading DHS. They’re violating federal law, but I guess it doesn’t matter to them because it’s not their money. I hope the governor will get serious about cleaning up DHS and protecting taxpayers. This is simply unacceptable.
Arkansas officials contend that they don’t have to comply with these rules, because the Obama administration provided them with a temporary waiver. Regardless of whether that non-compliance is legal as a technical matter, there’s no reason for the state to have delayed eligibility verification this long. The fact that the Obama administration was complicit in allowing Arkansas to ignore eligibility verification rules is unlikely to comfort taxpayers responsible for those costs.
Just About Anyone Could Be Enrolled In ObamaCare Expansion
This means that more than 155,000 able-bodied adults – nearly two-thirds of all Medicaid expansion enrollees – were overdue for their annual Medicaid redetermination, as of March 2015. Selig admits that as many as 40,000 of these adults are likely to be removed once the state begins checking eligibility. But it’s possible that number could be even higher.
Without any redetermination of eligibility, it’s possible that just about anyone of any income level could be enrolled in Arkansas’ Medicaid expansion. It’s even possible that millionaires and lottery winners are receiving benefits, as other states have found in their own Medicaid, food stamps and other welfare programs in the past.
It’s also possible that some enrollees were eligible in October 2013, when they applied for the program, but left eligibility before they even received a single benefit in January 2014. Enrollees are required to notify the state if their income changes, but past audits reveal that rarely happens. With state officials not bothering to monitor eligibility changes, taxpayers are relying on able-bodied adults to voluntarily disenroll themselves from the Medicaid welfare program.
Ultimately, this means that taxpayers’ limited resources are being siphoned away from the truly needy to provide welfare to able-bodied adults who aren’t even eligible for benefits.
A Troubled History Of Eligibility Verification
The likelihood of fraudulent enrollment could be even greater, considering Arkansas’ recent eligibility verification struggles. Just a few months into the state’s Medicaid expansion, Arkansas officials removed nearly 5,000 enrollees after learning they were ineligible for benefits. As it turns out, the state had not bothered to verify their eligibility at all before enrolling them in the expansion program. This carelessness resulted in some enrollees receiving both Medicaidand Obamacare subsidies for coverage on the Obamacare exchange.
An earlier audit found more than 12 percent of individuals in higher-cost Medicaid cases were ineligible for the program. Another 24 percent of the enrollees lacked proper documentation to establish eligibility, but they were enrolled nonetheless.
Arkansas and Other States Should Stop the Scam
With the recent end to its legislative session, Arkansas missed an important opportunity to implement new fraud prevention measures in its welfare programs. States like Illinois and Pennsylvania have implemented major reforms to make sure only those individuals actually eligible for welfare are receiving benefits. Those reforms start by providing better screening at the front door to ensure those applying for welfare are actually eligible before they are enrolled. But they also provide more frequent checkups to monitor eligibility for those already enrolled in the program so individuals do not stay on welfare longer than they should. More than a dozen states are now considering similar initiatives.
At the earliest opportunity, Arkansas should adopt these protections for both patients and taxpayers. Every dollar wasted on providing welfare to ineligible individuals is a dollar that can’t go towards providing services to the most vulnerable or spent on other core priorities including education, public safety, or infrastructure.
Lawmakers in other states should follow suit and begin asking questions of their own Medicaid agencies. This recent discovery in Arkansas may only be the tip of the iceberg.
This piece originally appeared at Forbes on April 16, 2015.