Center for Public Policy Priorities 1 Impact of Texas’ Eligibility System Changes on CHIP and Medicaid 80 th Texas Legislature Impact of Texas’ Eligibility System Changes on CHIP and Medicaid 80 th Texas Legislature House Committee on Human Services February 23, 2007 Anne Dunkelberg, Associate Director ) 900 Lydia Street - Austin, Texas Phone (512) – fax (512)

Center for Public Policy Priorities 2 CHIP and Medicaid: Helping Texas Kids As of February 2007: 1.77 million Texas children (under age 19) were enrolled in Medicaid about 100,700 of these children get Medicaid because of a serious disability About 122,000 in TANF cash assistance families (7% of the kids) About 12,700 pregnant teens (less than 1% of the children) Other 1.53 MILLION predominantly in WORKING poor families 325,479 Texas children were enrolled in CHIP. “CHIP stands on the broad shoulders of Medicaid” That’s 2.09 million Texas children – nearly one-third of all our kids.

Center for Public Policy Priorities 3 Income Caps for Texas Medicaid and CHIP, 2006 $22,078/yr $30,710/yr 185% 133% $16, % $2,256$3, %22.3% 74% $7, % $21,708 $33, % Income Limit as Percentage of Federal Poverty Income Annual Income is for a family of 3, except Individual Incomes shown for SSI and Long Term Care

Center for Public Policy Priorities 4 Texas Kids’ Uninsured Rate Drops, Thanks to CHIP and Medicaid BEFORE CHIP and streamlined Children’s Medicaid In 1997, When Congress created the CHIP Block Grant, U.S. Census estimated that: 24%-25% of Texas children were uninsured (about 1.4 million children), –and over three quarters (76%) of these were in families at or below 200% FPL. There were about 5.95 million Texas children (under age 19). SINCE CHIP and Streamlined Children’s Medicaid: 20.4% of Texas children under age 19 (1.37 million) are uninsured –just over two-thirds (68%) are in families below 200% FPL. There are about 6.6 million Texas children (under age 19). Texas CHIP and streamlined children’s Medicaid have provided health coverage for about 1 million more Texas children. Uninsured Texas children below 200% FPL have dropped from 35% to 29% (kids potentially served by children's Medicaid and CHIP).

Center for Public Policy Priorities : Tough Year for Children’s Medicaid and CHIP CHIP CHIP rolls had declined every month since September 2003, but in 2006 the rate of monthly decline more than tripled, compared to CHIP enrollment in February 2007 is just above December 2005, with no growth trend established yet. Children’s Medicaid Children’s Medicaid had grown steadily since 1999, though recent growth was slow & steady -- reflective of population growth. Medicaid had not experienced more than 2 consecutive months of declining child enrollment since the days of welfare reform, when parents leaving welfare were not told that their children could still receive Medicaid coverage. In 2006, children’s Medicaid rolls have declined for 7 out of 12 months. Drop of over 118,000 children statewide from December 2005 to October 2006 caused alarm. Children in Medicaid as of February 2006 remains more than 68,995 below the December 2005 caseload, a decline of 3.8%.

Center for Public Policy Priorities 6 Texas Child Medicaid Enrollment (February 2001-February 2007) Source: Texas Health and Human Services Commission Simplified Enrollment begins High: 1,838,239

Center for Public Policy Priorities 7 Average Monthly Enrollment Growth for Texas Children in Medicaid, FY 2001 – FY 2007* Source: CPPP analysis of Texas Health and Human Services Commission data 68,189 Change in Enrollment: 285,584280,594122,402 Rolled back some simplification measures Simplification of application and renewals 67,084 *FY 2007 YTD; Avg. annual TX child population growth rate 1.2% ( ) -35,679-15,058

Center for Public Policy Priorities 8 Texas CHIP Enrollment (May 2000-February 2007) Source: All figures from Texas Health and Human Services Commission; Compares most recent month with September 2003 Highest, 5/02: 529,271 9/03: 507,259 2/07: 325,479

Center for Public Policy Priorities 9 Texas Child Medicaid and CHIP Enrollment Sources: Enrollment from Texas Health and Human Services Commission; Texas State Demographer's 0-17 Population Estimates Sept. ’03: 2,150,543 Feb. ’07: 2,094,723 Estimated child population growth of almost 70,000 per year Combined CHIP/Child Medicaid Enrollment

Center for Public Policy Priorities 10 Why Children’s Medicaid & CHIP Dropped in ‘06 Fall 2005: State staffing shortages in HHSC eligibility offices hit critical levels, due to worker anticipation of Integrated Eligibility job losses and the October 2005 announcement of positions to be eliminated (~100 workers leave per month from 10/05 to 7/06); November 2005: Transition from original private CHIP eligibility contractor to the new contractor which was in charge of the entire Integrated Eligibility project; November 2005-January 2006: HHSC imposed a range of CHIP policy and processing changes which –complicated the contractor transition, –materially changed the process for parents, –were implemented without prior outreach or education for CHIP families, and without advance consultation with CHIP health plans or contracted CBOs; and………

Center for Public Policy Priorities 11 Why Children’s Medicaid & CHIP Dropped in ‘06 December 2005: Operations by the new CHIP/Integrated Eligibility contractor marked by errors due to multiple problems & failures of various contractor computer systems, and heavy reliance on untrained entry-level private workers. January 2006: The same problems with the new contractor also created problems for Medicaid clients of all ages in Travis and Hays counties, where Integrated Eligibility is first piloted. These problems were compounded by continued problems with TIERS, the computer system the state has been developing for years to replace SAVERR and support Integrated Eligibility. Multi-layered sources of these troubles naturally suggests that fixing the current woes will also require a multi-faceted approach.

Center for Public Policy Priorities 12 Focus on Children’s Medicaid Decline Medicaid drop caused by factors in both the Public and the Private components of the eligibility system: Inadequate state staffing levels resulted in long delays in processing new applications as well as renewals, –resulting in automated closures of cases up for renewal, despite parents having returned all required information. –These problems persist, with state “timeliness” ratings well below the minimum standards required under federal law. Confusion: HHSC originally announced that all new children’s Medicaid applications would be processed by the contractor. –Even though HHSC reversed that decision early in the year, for several months workers in some parts of the state continued to instruct parents to send their applications to the contractor, causing many to be delayed or even lost entirely. Finally, even if Medicaid applications had not been misdirected to the contractor, the CHIP (and Integrated Eligibility) contractor would still have had a major impact on children’s Medicaid enrollment, because it: 1.processes a major stream of new Medicaid applications, and 2.is responsible for moving children from CHIP to Medicaid every month. HHSC CHIP statistics show the average number of children on CHIP moving directly to Medicaid every month was 6,800 in fiscal year 2003 and 7,800 in 2004.

Center for Public Policy Priorities 13 Focus on CHIP Process Problems CHIP Contractor had multiple Computer & Training Woes: Contractor staff did not understand CHIP or Medicaid program rules, thus: –Did not understand when they had a complete application; and –Asked thousands of parents for “missing information” that was irrelevant to their child’s case; – Delayed or closed renewal cases, and “timed out” applications, over information that never should have been requested. Parents submitted the same “missing information” multiple times, yet the data never got linked to their child’s record. Parents submitted enrollment fees, checks cleared, but their child’s case was not credited and their coverage was dropped. CHIP HMOs received inaccurate and incomplete electronic enrollment files from contractor. Results: Renewal rates plummeted. –Renewal rates 9/03 to 11/05 averaged 78%, but for 5 months from 1/06 to5/06 averaged just 54% –Rates understate the decline somewhat: the actual NUMBER of CHILDREN renewing successfully every month in calendar 2005 was over 33,000 per month; from January 2006 to present dropped to under 25,000 per month –Last 5 months have seen improved renewal rates and numbers, but upward trend not yet established.

Center for Public Policy Priorities 14 Focus on CHIP Process Parents received nonsensical letters demanding payments and documents by deadlines months in the past. Contractor staff were (are still?) unable to locate missing information that families have provided – even though received and scanned into their system -- causing delays and case closures for “failure” to submit info. Applications are not transferred from Medicaid to CHIP (and vice versa) in a timely manner, causing serious delays in renewals and applications, even though children’s Medicaid and CHIP have used a joint application since 2001; Children with serious and chronic health care conditions – whose parents are extraordinarily conscientious and attentive to details – have been being wrongfully cut from CHIP and Medicaid coverage through no fault of their own.

Center for Public Policy Priorities 15 Devante Johnson, age 13 Diagnosis: Advanced Cancer of the Kidneys Mother submitted renewal 2 months before Medicaid expiration. Medicaid renewal sat for 6 weeks without processing. Devante determined eligible for CHIP - application transferred to CHIP Contractor. Paperwork was lost in the system and despite numerous calls and faxes, Devante’s mother was unable to track the application. State Representative intervened to restore coverage.

Center for Public Policy Priorities 16 Devante is now being treated at MD Anderson in Houston. When he lost coverage, he could not receive regular treatment and relied on clinical trials for care. Eligible child was uninsured for 4 months while tumors grew.

Center for Public Policy Priorities 17 Rohrer Family Tried for 5 months to apply for CHIP without success. CDF intervened to get the children covered in September Matt suffers from manic depression and ADHD and his sister Tasha suffers repeated fractures due to a brittle bone condition. Paid $50 premium in September, more than the $35 required. On October 25 th, received a letter requesting they pay their premium by July 17 th or the children would lose coverage.

Center for Public Policy Priorities 18 The Insure Texas Kids Campaign and the Texas CHIP Coalition urge the following plan of action for the 80th Texas Legislature: Cut the number of uninsured Texas kids in half by enrolling every eligible child in CHIP and Medicaid Implement 12 months continuous eligibility for CHIP and Children’s Medicaid Eliminate bureaucratic roadblocks to encourage personal responsibility and help low income families achieve self- sufficiency: –Fix problems with the Integrated Eligibility System to prevent eligible kids from losing CHIP and Medicaid coverage –Eliminate the CHIP asset test –Eliminate the CHIP 90 day delay of coverage for uninsured children –Deduct childcare and child support expenses when calculating income for CHIP Provide adequate reimbursement for Medicaid and CHIP providers Invest in outreach and education to ensure that all eligible children get the care that they need

Center for Public Policy Priorities 19 We CAN fix problems with the Integrated Eligibility System to prevent eligible kids from losing CHIP and Medicaid coverage Adequate numbers of state eligibility workers to process applications, renewals within federal law timeframes –and preferably faster than that! Zero tolerance for gaps in coverage when kids move from Medicaid to CHIP, or CHIP to Medicaid. More improvement needed in CHIP contractor performance: prompt processing, eliminate staff policy errors, fix ongoing computer problems. Set high performance standards in both the public and private systems to try to minimize “missing info” requests, eliminate “procedural” denials, and raise renewal rates. In Louisiana: –children’s Medicaid/CHIP cases closed for failure to return renewal forms dropped from 17% to 2%, –renewal rates increased to 92%, and –children with gaps in Medicaid-CHIP coverage reduced from 18% to 6% over 2 years.

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Center for Public Policy Priorities 21 Additonal Texas Medicaid & CHIP Background Information

Center for Public Policy Priorities 22 Adult Medicaid Trends - Statewide Dec-05Feb-07Dec 05 to Feb. 07 Change Aged and Disabled 687,177721,06233,8854.9% Cash Assistance 31,87624,288-7, % Maternity93,61793, % Other Parents 64,65655,901-8, % Total893,470895,3711, % CAVEAT: Travis and Hays Medicaid enrollment DECLINED for adults, including aged and disabled (-2.2% Travis; -6.9% Hays) from December 2005 to February (Numbers may be flawed.) Points to problems with the IE&E pilot and TIERS

Center for Public Policy Priorities 23 Most Kids who lose Medicaid or CHIP are Uninsured Afterwards The 12/2004 independent ICHP disenrollment report found: –52% of kids leaving CHIP remained uninsured. –of the 47% who got coverage later, 31% went to Medicaid and only 11% got employer-sponsored insurance (ESI) New ICHP studies of children losing CHIP or children’s Medicaid in 2006 found: –only 28% of kids who lost CHIP (and 24% of kids losing Medicaid) had any kind of health coverage afterwards, and –only 19% (i.e., about two-thirds of the 28%) moved to Medicaid.

Center for Public Policy Priorities 24 HHSC Eligibility Division is responsible for Contracts with Community Based Organizations to do outreach and education Responsible parents need help understanding the complexity of the health care system--what care is available for children, and what the parents’ responsibilities are in enrolling and accessing that care. Ongoing outreach and assistance programs are vital to connecting children with a medical home and keeping them healthy. The Coalition applauds HHSC’s recent marketing and public education efforts to inform families about the availability of children’s Medicaid and CHIP. These initiatives also educate families about the importance of keeping their children enrolled, and inform them about how to effectively and appropriately use health care services.

Center for Public Policy Priorities 25 Invest in outreach and education to ensure that all eligible children get the care that they need Texas should leverage this marketing spending by preserving and expanding the role of Community-Based Organizations in outreach and education, proven effective in the CHIP-building years. In , community-based organization (CBOs) outreach was funded at $6.1 million, and direct marketing at $3.8 million. April 2006 HHSC announced $3 million in marketing of CHIP/children’s Medicaid. HHSC has announced $3.5 million contract, but this will expand CBOs’ responsibilities for outreach to approximately 2 million adults, in addition to the 2 million+ children already targeted. We must ensure that funding for children’s insurance programs continues at or above 2002 levels, and provide additional funding to support the new CBO responsibilities. Special resources are needed to remedy the higher lost CHIP enrollment among preschool children, and rural Texas children.