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Problems with federal health portal also stymie Medicaid enrollment

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WASHINGTON » Problems with the federal health insurance website have prevented tens of thousands of low-income people from signing up for Medicaid even though they are eligible, federal and state officials say, undermining one of the chief goals of the 2010 health care law.

The website,, is primarily seen as a place to buy private insurance with federal subsidies, but it is also a gateway to Medicaid, which generally provides more benefits at less cost to consumers.

That door has been closed for the last six weeks, with the federal government unable to transfer its files to state Medicaid programs as it is supposed to do.

The delays are affecting people in 36 states that rely on the federal exchange, regardless of whether those states are expanding eligibility for Medicaid as authorized by the health care law. About half of all states have chosen to do so.

Obama administration officials once envisioned a seamless application process in which consumers would use a single form to apply for Medicaid, tax credits and the Children’s Health Insurance Program, and most eligibility decisions would be made instantaneously. Under rules issued last year by Kathleen Sebelius, the secretary of health and human services, an exchange must transfer information to Medicaid "promptly and without undue delay," using a "secure electronic interface."

The administration is not meeting its own standards.

Marilyn B. Tavenner, the administrator of the Centers for Medicare and Medicaid Services, who oversaw the creation of the troubled federal website, said she decided in September to delay the Medicaid transfers so technicians could "spend more time concentrating on the application process" and other priorities.

The White House has not released enrollment data, but some states running their own exchanges, like Kentucky, Minnesota and Washington, say more people have signed up for Medicaid than for private insurance.

The Obama administration has adopted what it calls a "no wrong door" policy: If a person files an application with the exchange for private insurance but appears to be eligible for Medicaid, the exchange will automatically transfer the full application to the state Medicaid agency, and vice versa.

"We have not seen much progress on the flow of data from the federal marketplace to the state," said Monica H. Coury, assistant director of the Medicaid program in Arizona. "After a person is assessed as potentially eligible for Medicaid, the application just sits there in the federal marketplace. If you need insurance because you have a serious medical condition, that delay could be harmful."

People going to an exchange do not necessarily know if they are eligible for Medicaid or for tax credits to subsidize the purchase of private insurance on the exchange. Sebelius has said repeatedly that "the marketplace will provide consumers and small businesses one-stop shopping for health insurance."

In fact, many consumers will need to make more than one stop. If the exchange finds them potentially eligible for Medicaid, it may be faster for them to file separate applications with a state Medicaid office than to wait for the federal government to transfer their files to the state.

Gov. Dave Heineman of Nebraska, a Republican, said the delay was "further evidence that Obamacare is not ready for implementation."

Matt D. Salo, the executive director of the National Association of Medicaid Directors, which represents state officials, said, "This is not a catastrophe, but it sends a confusing message to consumers."

"You go to and spend 45 minutes or more to set up an account," Salo said. "Then you’re told that you’re eligible for Medicaid but can’t get it. You have to start all over again with the state Medicaid agency."

Some people seeking insurance on the exchanges are already eligible for Medicaid but are not enrolled. They may be shopping for insurance because they have heard about the exchanges through news reports or because they are aware of the requirement that most Americans carry insurance starting next year.

Coverage through the exchanges begins on Jan. 1, but people eligible for Medicaid under current rules could get coverage now if the federal government transferred their applications to state Medicaid programs.

State officials predict that millions of people will apply and be found eligible for Medicaid under existing rules. Some call this a "coming out of the woodwork" effect; others call it the welcome-mat effect of the health care law.

The number of new Medicaid beneficiaries has financial implications for states, which administer Medicaid and share the costs.

For newly eligible beneficiaries, the federal government will pay the full cost of benefits from 2014 to 2016. States will then begin to pay a share, rising gradually to 10 percent in 2020, and the federal government will pay the remaining 90 percent.

However, for those who are already eligible, states will pay their customary share, ranging from 27 percent to 50 percent of costs.

In Ohio, Greg Moody, director of the governor’s Office of Health Transformation, said that the state had begun using a new online Medicaid eligibility system Oct. 1 to coincide with the opening of the federal website. But, he said, the federal exchange cannot send application files to or accept them from the state.

"This has caused some measure of frustration," Moody said. "Our system is ready and waiting to accomplish those transfers when the federal system is ready."

Stephanie A. Goodman, a spokeswoman for the Texas Health and Human Services Commission, said the transfers were supposed to start Oct. 1. "That date slipped to Nov. 1 because of all the technical glitches" with the federal exchange, she said, and state officials believe it may be postponed again to Jan. 1.

In addition, Goodman said, the federal exchange has not tested its links to the state, so "we do not know if we will get the information we need" to determine eligibility.

Kelly Gunderson, a spokeswoman for the Tennessee Medicaid program, said: "We are not getting files from the federal government. Those handoffs are just not occurring."

Sen. Kay Hagan, D-N.C., who is up for re-election next year, drafted a letter Monday to the Government Accountability Office and the inspector general of the Health and Human Services Department calling for thorough investigations of the website’s opening.


Robert Pear, New York Times

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