Abusing Citizens and Wasting Money: Are You Ready for This? Feds Issue Guidance on the Citizenship Documentation Requirement for Medicaid

The Centers for Medicare and Medicaid Services, or CMS, the federal agency in charge of the Medicaid program, last week issued guidance to all state Medicaid directors on how they are to administer the new requirement that all Medicaid applicants and recipients who are U.S. citizens must document their U.S. citizenship. The new requirement was enacted last February as part of the Deficit Reduction Act of 2005, the comprehensive bill that contained the federal budget for the 2006 federal fiscal year  (which began on October 1, 2005). The CMS guidance clarifies and in many ways softens the potential harmful impact of the law, but the new law nevertheless persecutes citizens and wastes tax dollars.

No change for noncitizens

This is about citizens. The Medicaid eligibility and documentation requirements for noncitizens have not changed at all under the new law. “Qualifying aliens” are still eligible for Medicaid and have the same documentation requirements to prove their status as before. 

The unfounded fear that unauthorized aliens might be impersonating citizens in order to obtain Medicaid prompted the new law. However, the Office of the Inspector General with oversight of Medicaid investigated exactly this issue less than a year ago and concluded that this is not a significant problem in the Medicaid program. Members of Congress led by Reps. Nathan Deal (R-GA) and Charlie Norwood (R-GA) ignored this evidence and pushed for inclusion of the new provision in the budget law. The rest of the congressional majority went along with it on an almost entirely party-line vote.

The old law on proof of citizenship

The law prior to the enactment of the new law provided that a person must be a citizen or qualifying alien to be eligible for Medicaid. To prove citizenship, the old law allowed applicants to state, under penalty of perjury, that they are citizens. It did not require documentation of citizenship, although it allowed and expected the states to demand documentation in any case where there was some question that the assertion of citizenship might not be correct. While there are numerous ways to become a citizen, almost all citizens gained that status simply by being born in the United States. Thus the assertion of citizenship for Medicaid eligibility most often amounted to an assertion of birth in the United States.

In most cases, simply judging from personal characteristics and statistical likelihood, there is no reasonable doubt about most peoples’ assertion of citizenship, and to require everyone, and require the state Medicaid agencies, to spend time and money tracking down the documentation of native birth makes little sense. To limit the requests for documentation to cases in which there is some legitimate reason to think the assertion of native birth is questionable makes the most sense and is the best use of public dollars. This is exactly the balance that the old law struck, and the Office of the Inspector General’s conclusions proved it to be an effective approach. 

The new law and the CMS guidance

The new law presumes that Medicaid applicants and recipients who swear under oath to a native birth cannot be believed. Instead the law demands documentary proof of citizenship in each case. It demands this of new applicants for Medicaid effective July 1, 2006. And, in spite of the fact that they have already been found to be citizens, the new law reopens the issue and demands documentary proof of current Medicaid recipients in their next annual eligibility review after July 1.

The new law demands very specific types of proof to establish both the citizenship and the identity of the person. A passport is the prime example of a document that establishes both citizenship and identity. A birth certificate is the prime example of a document that establishes citizenship but not identity. And an official picture ID (such as a driver’s license) is the prime example of a document that establishes identity. So, according to the statute, in most cases, to get or retain Medicaid a person has to produce a passport or, if there’s no passport, both a birth certificate and a picture ID. The statute lists a few other examples of documents that will suffice, and it allows CMS to publish a regulation further fleshing out the requirements.

The CMS guidance published on June 9, 2006, fleshes out the requirements, and it will be turned into a formal emergency and proposed regulation (published in the Federal Register) before the end of the month. The guidance will help many people who cannot comply with the statute’s rigid documentary specifications to prove their citizenship and identity with other documents. And, as a last resort, it allows people who cannot produce any of the allowed documents to prove their citizenship and identity by affidavits from people who know where they were born and who they are. The guidance allows current recipients of Medicaid as much time as they need to produce the documentation, so long as they can demonstrate ongoing good-faith efforts to do so. And it instructs states to help recipients and applicants who are having trouble producing the documentation. In a general sense, the guidance should help the states administer the new requirement in a way that theoretically should not deprive many people of Medicaid.

The new law still needlessly persecutes citizens and wastes tax dollars

The most immediate danger to people who need Medicaid is if they live in a state that decides not to administer the documentation requirement in the most helpful way but instead either bungles it or treats it as a way to save money by eliminating eligible people from the program. Such states are definitely out there. Even well-intentioned states have plenty of motivation under the statute and the guidance to deny or terminate Medicaid rather than risk loss of federal matching funds. The guidance makes clear that states will be audited on the documentation requirement and that states are expected to give it teeth. States have plenty of room under the guidance to avoid depriving most citizens of Medicaid coverage, but some states may not have the necessary willpower and will be tempted to deprive citizens of coverage rather than “risk” loss of any federal matching funds.

Even in the most mission-oriented states (the mission being to provide health care to those who need it and are eligible), the entire population receiving or applying for Medicaid is about to be put through a difficult, frightening, and potentially disastrous process. The process is both unnecessary and insulting because it starts with the presumption that the Medicaid recipients and applicants have lied or surely will lie about their citizenship. They must respond to notices, gather documents, ask for help, try to obtain affidavits if they do not have documents, convince the state authorities that they are making their best efforts, navigate difficult bureaucratic processes. They will have to pay for documents. Anyone with experience of caseloadwide “dragnets” like this knows that there are always a significant number of casualties, as high as 10 percent to 20 percent, attributable simply to mistakes, administrative rigmarole, and falling through the cracks. This will be more pronounced among the Medicaid population: elderly, people with disabilities, children, disaster victims, and residents of institutional settings.

Even those who will ultimately succeed in documenting their citizenship are facing irreparable losses: being put through this process, having to expend the time and resources, undergoing an emotion-filled exposure to the loss of their all-important health coverage. Recipients who have already proven their citizenship under the prior law must undergo the sudden “reversal” of that determination of their citizenship for no reason other than that politicians in far-off Washington, D.C., had a phobia and a political agenda.

And what about the states? Virtually all of them face budget crises and very important demands on their resources, demands such as schools, public safety, and, yes, health care. Now, courtesy of Representatives Deal and Norwood and their companions who passed this law, the states face millions and millions of unnecessary administrative tasks. Even the most routine cases will demand fresh work involving the acceptance, processing, and care of documents. More complex cases will involve more time and personnel and cost. States are also exposed to liability for the questionable constitutionality of the new requirement, a liability that Congress forced on them.

The majority in Congress thought, perhaps, that this was just an incident in this year’s larger debate over immigration and a way to score a debating point. Not so. There are large costs here to citizens and the states, and there will be scant impact on any aspect of the nation’s immigration situation. There should be a line item in the ledger of wasted taxpayer dollars called “Deal/Norwood costs” to record the fiscal drain. How to keep the tally of the huge human costs visited on American citizens under this law is less clear.

The Shriver Center is examining litigation options regarding the new citizenship documentation requirement and welcomes those who know of people who may be injured by it to contact John Bouman or Margaret Stapleton.