California Medicaid Beneficiaries Experience Gaps, Are Being Hospitalized

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California Medicaid beneficiaries who faced gaps in coverage were more than three times as likely as those with continuous coverage to be hospitalized for chronic illnesses, according to a five-year retrospective study published in the Annals of Internal Medicine, the New York Times reports (Rabin, New York Times, 12/17). For the study, funded by the Commonwealth Fund, researchers examined use of health services by Medicaid beneficiaries from 1998 to 2002. During that period, beneficiaries were required to verify their eligibility every three months. The policy was changed in 2001, and the state now requires proof every six months (Wallbank, CQ HealthBeat, 12/16).

The study found that about 62% of Medicaid beneficiaries had a gap in coverage during the study period, and those beneficiaries were 3.6 times more likely to be hospitalized for chronic conditions such as diabetes, asthma and high blood pressure. According to the Times, heart failure, diabetes and chronic obstructive pulmonary disease were the leading causes of hospitalizations among the beneficiaries. The study found that most beneficiaries were admitted to the hospital within three months of losing coverage and that most qualified again for Medicaid once they were in the hospital.

According to the Times, the study "calls into question the practice" of having Medicaid beneficiaries frequently verify their eligibility and suggests that gaps in coverage can cost states more in the long run. Alan Bindman, lead author of the study and professor of medicine at the University of California-San Francisco, said that Medicaid requires eligibility checks to prevent waste and fraud in the program, but the study "brings home the fact that in many ways Medicaid ends up paying for these patients in the long run, and doing it in a more expensive setting than would have been the case if they had maintained the coverage." He added, "What we find is that many patients, faced with financial barriers to getting care, wait and wait, hoping it's going to go away, and by the time they come to the emergency department, the game is over and the only recourse is hospitalization."

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CMS spokesperson Mary Kahn said recertification requirements are set by states and the federal government requires recertification once per year. She said, "It certainly does not come as a surprise that people who routinely lose access to medical care would suffer health consequences," adding, "This is not strictly a situation with Medicaid -- people who lose private health insurance when they lose a job or age out of coverage often don't seek care until their illness is critical" (New York Times, 12/17).

Cutting Costs

The study comes as California prepares to require children enrolled in Medi-Cal, the state's Medicaid program, to prove eligibility every six months, rather than annually as is currently the case. Tony Cava, a spokesperson for the state Department of Healthcare Services, said the decision is based on budget shortfalls. Cava estimated 34,000 of California's 3.3 million children enrolled in Medicaid will leave the program in 2009. According to CQ HealthBeat, the hope is that the projected $193 million in savings from the drop in coverage will help offset the state's budget deficit, which state leaders project could reach $41.8 billion over the next 18 months.

CQ HealthBeat reports that the "pressures to reduce Medicaid costs aren't confined to the Golden State" and that Medicaid spending for states is expected to double to $673.7 billion by 2017, according to an October report by CMS. The number of people enrolled in Medicaid is expected to rise throughout the economic downturn. An average of 49.1 million people were enrolled in Medicaid in 2007, and that number is expected to climb above 50 million this year and to more than 55 million by 2017, according to CQ HealthBeat (CQ HealthBeat, 12/16).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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