Health Care Reform:

Potential Difficulties in Determining Eligibility for Low-Income People

HEHS-94-176: Published: Jul 11, 1994. Publicly Released: Aug 1, 1994.

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Pursuant to a congressional request, GAO provided information on the problems applicants face in enrolling in the Medicaid program, focusing on the: (1) reasons why eligible applicants are not being enrolled; (2) incentives hospitals have to facilitate patient enrollment; and (3) potential impact of health care reform on Medicaid eligibility determinations.

GAO found that: (1) many people who are potentially eligible for Medicaid never complete the application process; (2) nearly half of the applicants in the three states reviewed were denied Medicaid because they did not or could not provide the basic eligibility documentation or did not appear for eligibility interviews; (3) states lack the resources necessary to routinely assist Medicaid applicants; (4) states do not know why applicants do not complete Medicaid applications or how many of those who are initially denied eventually reapply for Medicaid; (5) hospitals rely on private enrollment vendor firms to enroll eligible Medicaid patients because they require a payment source to cover the costs of care to uninsured patients; (6) in return for ensuring that patients meet all of application requirements, vendor firms receive a portion of the Medicaid revenues they generate; (7) some hospitals have established internal units to help eligible applicants enroll in Medicaid; (8) health care reform may increase the administrative burden of determining eligibility and number of people who will have to demonstrate eligibility before receiving assistance; and (9) as health care reform is implemented, Congress will need to determine the appropriate balance between increasing access to health care and maintaining program integrity.

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