Perspective: 8 Million Spared, 40 Million Still at Risk

A class action lawsuit filed on June 28 in federal district court in Chicago challenges a new law requiring 50 million Medicaid beneficiaries to prove their U.S. citizenship with passports, birth certificates, and other documentation. In what some are calling an attempt to preempt a ruling in a scheduled hearing a few days later, the Bush administration issued regulations to exempt some eight million citizens from the harm caused by the law. U.S. citizens who are still in harm’s way and need health coverage under the Medicaid program filed on July 21 new papers refocusing their lawsuit against a new federal requirement that they document their citizenship in order to be eligible for health coverage.

The citizenship documentation requirements of the Deficit Reduction Act

The new requirement was part of the Deficit Reduction Act of 2005, passed in February 2006. It makes no changes in the requirements for eligibility for Medicaid for the categories of noncitizens previously eligible. The changes affect only citizens, who had been able to establish eligibility by declaring their citizenship under penalty of perjury. If states had reason to believe they were not citizens, the states were free to demand further documentation. A study of this system last year indicated that there was no problem with it and no evidence that noncitizens were fraudulently obtaining Medicaid by claiming to be citizens.

Nevertheless, Congress passed the new documentation law. It is a side battle in the ongoing immigration policy debate and part of the effort to make immigration an election issue. But it will have negative consequences for millions of American citizens if it is not implemented carefully. Millions of low-income Americans need health care but are unable to produce the required documents (passport, birth certificate, identity papers). Such Americans include the mentally ill or infirm, homeless, disaster victims, foster children, and many others who do not or cannot walk around with formal papers.

Congress appears to have written the law in a way that gives federal Medicaid officials enough flexibility to avoid the harm. However, the Bush administration’s original plans for implementing the requirement would not have spared anyone from harm.

The Bush administration’s implementation plan and the lawsuit

After sitting on its implementation plans for four months, the Bush administration released on June 9 a letter to all state Medicaid directors outlining how they were to implement the law. This “guidance” applied the full documentation burden to every single Medicaid applicant and recipient—all 50 million. It established a limited list of allowable documents and arranged them in a hierarchy, insisting that everyone attempt to get the best, most formal documentation before any other, less formal documentation. And it imposed unrealistic time deadlines that many would be unable to meet, even if they might obtain the allowable documents.
  
A national group of endangered citizens filed on June 28 a lawsuit seeking to hold off the implementation—supposed to take effect, as planned by the administration, on July 1—of the new requirements. The nine plaintiffs included elderly African Americans born at home when their mothers were not allowed in hospitals due to racial discrimination. They never had birth certificates. Several of the named plaintiffs were unable to handle their own affairs due to age and disease and were represented by guardians or trustees. None of them had the papers the administration was demanding, and most of them had no prospect of being able to acquire those documents. Having spent their entire lives within the United States, all of them are citizens without any doubt.

The lawsuit claims that the implementation plan violates the Medicaid law by creating a new eligibility requirement (the documents) not specified in the law (which demands only that a citizen declare citizenship). The lawsuit also claims that the implementation plan violates the constitution by forcing people into an unfair process stacked against them. The plaintiffs seek to represent a nationwide class. The Sargent Shriver National Center on Poverty Law and cocounsel from Health and Disability Advocates, the National Health Law Project, the National Senior Citizens Law Center, and the Chicago firm of Goldberg, Kohn are their lawyers.

The new “interim” regulations and the status of the lawsuit

The case was scheduled for a hearing on an emergency injunction on July 7, but late the night before, on July 6, the federal Medicaid officials released a new regulation relieving many of the most vulnerable citizens from having to comply with the documentation requirement. The new regulation was published in the Federal Register on July 12 but is effective July 6. An “interim final” regulation, it means that it is effective and binding, but federal officials are taking public comments until August 11, and a final version will be released thereafter.

Under the regulation, the administration uses some of its flexibility under the law to exempt anyone who is a recipient of Medicare or Supplemental Security Income (SSI) from the documentation requirement. Some of the SSI recipients live in states, such as Illinois, that must accept the option to exempt them from the requirement. Assuming all states do this, the exemption will spare eight million of the most vulnerable elderly and disabled people from the requirement.

That leaves 40 million who are still affected by the new requirement. The interim regulation somewhat widens the types of documentation that may be used but continues to impose documentation as an eligibility requirement and implements a fundamentally unfair process that will result in many citizens losing eligibility for Medicaid.  These citizens include, for example, mentally impaired or physically impaired people not yet found eligible for SSI, foster children, abandoned children cared for by relatives, homeless people and disaster victims, and many others who fall through various cracks with respect to their possession of formal documentation of their citizenship and identity.

In court on July 7 the plaintiffs asked for a short period to absorb the new regulation (which they saw that morning for the first time) and adjust the court papers. The court accordingly postponed consideration of the emergency injunction and scheduled a “status hearing” for July 28.  On July 21 the plaintiffs filed their amended complaint and new arguments focused on the interim regulation. Plaintiffs expect the court to allow time for the government to submit papers, with the case ready for ruling by mid-August.

Meanwhile, people concerned about this new law and the regulation should make their position clear to their members of Congress. The quickest way to resolve this is to change the law or the regulation, and this will happen (outside of court) only if you make it an issue by raising your voice.

For more information on the status of case please contact John Bouman.

Poverty Action Report
July 2006