New York Requires Employed Medicaid Recipients To Enroll in Employer-Sponsored Health Insurance

HRD-84-86: Published: Aug 10, 1984. Publicly Released: Aug 10, 1984.

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As a part of its review of the use of recipient health insurance coverage to avoid Medicaid costs, GAO reported on the New York State practice of requiring working recipients to enroll in available employer-sponsored health insurance plans.

GAO found that, if the insurance programs require employee contributions, the state is using Medicaid funds to make contributions to private health insurance programs for employed Medicaid recipients. Even though this practice appears to have the potential for Medicaid savings, the State's imposition of this additional Medicaid eligibility criteria is not permitted by federal law. Such conditions for eligibility are only permissible if the State requests and is granted a waiver from Medicaid requirements for demonstration project purposes.

Recommendation for Executive Action

  1. Status: Closed - Implemented

    Comments: HCFA told New York State that its practice was contrary to federal law and to discontinue or modify the practice to bring it into conformance. HCFA instructed states to consider free employer-provided health insurance and state paid premiums for employer-sponsored health insurance as conditions for coverage of services rather than as a condition of elgibility for Medicaid.

    Recommendation: The Administrator of the Health Care Financing Administration (HCFA) should direct the New York State Medicaid agency to discontinue the practice of requiring Medicaid recipients to enroll in employer-sponsored health insurance as a condition for eligibility until, and unless, it seeks demonstration project status for this practice and HCFA approves the necessary waiver.

    Agency Affected: Department of Health and Human Services: Health Care Financing Administration


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