For the first time, the state Medicaid program is requiring most members to respond to renewal notices or risk losing their health insurance coverage.

The state has begun sending out forms to at least 200,000 of the 320,000 Hawaii residents who are insured through Quest, Hawaii’s version of Medicaid, which provides health insurance to those with low incomes.

Until now, Quest members were automatically renewed each year, leaving open the possibility that the state was paying for health insurance for people who no longer lived in Hawaii, no longer qualified based on income, or had obtained insurance from another source.

The state pays insurance companies more than $1,500 a year per beneficiary. The Hawaii Medicaid program costs taxpayers roughly $2 billion a year with about half coming from the state and half from the federal government.

"The passive renewal policy resulted in a number of people being enrolled who were not eligible," said Kayla Rosenfeld, spokeswoman for the state Department of Human Services, which administers the Medicaid program. Medicaid quality control reports show that 7 to 10 percent of the members sampled were found to be ineligible, Rosenfeld said.

The mailing of renewal notices in Hawaii was prompted by the federal Affordable Care Act, which requires Medicaid programs in all states to collect additional information on income and tax status. In Hawaii, eligibility for adults is limited to those earning no more than 138 percent of the federal poverty level, or $18,257 for individuals and $37,384 for a family of four.

The renewal forms ask for income and members could be terminated if their income exceeds the set limits. The form does not ask for information on the assets owned by the member.

The Affordable Care Act got rid of the asset or resource test that used to bar some people from getting Medicaid.

The Hawaii DHS sent about 17,000 renewal letters last month and will send 17,000 each month until all Quest participants — except those who are aged, blind or disabled — have received notices.

"Those who do not return their forms will have their eligibility terminated, except for households with children," Rosenfeld said.

The state has used "passive renewal," where all those covered by Medicaid were automatically renewed each year, since 2004 because officials wanted "to eliminate barriers to continued coverage and to promote access to medical coverage for families with children," Rosenfeld said.

The state will require renewal forms be sent in only this year and then will return to passive renewals.

"After this catch-up period is completed, the (Medicaid program) will return to its previous process of passive renewal," Rosenfeld said.

The Hawaii Medical Service Association, the state’s dominant health insurer, said it is difficult to estimate how much less the insurer may get from the state as a result of this change since it is "highly dependent on exactly how Med-QUEST administers this and how responsive members are."

"We’re working with the state and our providers to help HMSA QUEST members meet their renewal deadlines and keep any negative impact to a minimum," Elisa Yadao, HMSA’s senior vice president of consumer experience, said in a statement. "Having health coverage is extremely important for everyone so we’re doing all we can to make sure our members understand what’s required of them. If necessary, we also have customer service representatives who can help them contact the state and get their eligibility reinstated."

The state agency is mailing renewal forms from April to September and giving recipients at least a month to update their information and return the forms.

DHS is anticipating that beginning in October it will be able to verify eligibility based on information it has or can access from existing data sources.

The department launched a $95 million online information technology system late last year and hopes to connect that with both state and federal data hubs to verify Medicaid eligibility.