With key components of the Affordable Care Act set to take effect in January, state officials are worried that one regulation — the ban on asset evaluation in calculating Medicaid eligibility — could increase costs and decrease efficiency in processing Medicaid applications.
Texas is one of three states to examine applicants’ assets — such as cars, bank accounts and homes — in addition to their incomes in determining whether they qualify for Medicaid, the public health insurance program for low-income children and people with disabilities. On Jan. 1, the state will only be allowed to consider an applicant’s income, a move that proponents say will increase efficiency and decrease barriers to Medicaid enrollment.
But the ban could increase the workload for officials at the Health and Human Services Commission, said Stephanie Goodman, an HHSC spokeswoman. The state currently processes applicants for Medicaid as part of a single procedure that includes the Supplemental Nutrition Assistance Program and Temporary Assistance for Needy Families. The latter two will continue to use asset-testing in determining applicant eligibility, Goodman said, meaning the state will have to break apart its application procedures to process applicants twice — once for Medicaid and once for other programs.
Goodman said she was concerned that an increase in processing time could lead to applicants having to wait longer to find out if they qualify for Medicaid and could eventually require HHSC to hire more staff.
But Jennifer Sullivan, director of the Best Practices Institute at Enroll America, a national group that works to promote the federal health reform, said she believes the removal of asset tests will make Medicaid enrollment a less burdensome process for both the state and applicants.
“Asset tests tend to keep people from completing the application process,” she said, even if those people are eligible for Medicaid.
“Eliminating asset tests is one more way of making sure people who are eligible for coverage get it,” she said.
Sullivan said she could not comment on how Medicaid applications could be processed simultaneously with SNAP and TANF applications because she did not work with those programs.
John Davidson, a health policy analyst at the conservative Texas Public Policy Foundation, said the ban on asset testing could lead to Medicaid fraud, as people could purchase expensive homes or cars, and still appear eligible for Medicaid.
“It’s going to be easier to qualify by diverting income into assets or hiding income in assets," Davidson said. "You could have a million-dollar house and qualify for Medicaid."
Goodman said that about 14 percent of those who apply for Medicaid are denied coverage because of value discovered in their assets. She added that asset testing is one of many factors used to determine whether a person is eligible for Medicaid coverage.
Although some have concerns that applicants will spend money unwisely on items like cars or homes when they could put that money toward health insurance, Goodman said, “I think for the most part those are going to be the exceptions, not the rule." She added that Medicaid applicants’ incomes are usually not ones “at which you could live lavishly.”
Goodman said the state will encourage people to apply online for Medicaid, which could reduce the processing time on the state’s end, but she could not estimate the impact the asset-testing ban will have on HHSC until it goes into effect in January.
“We’re trying to do things on the state side to make sure we’re as ready as we can be,” she said.
Becca Aaronson contributed to this report.
This story was produced in partnership with Kaiser Health News, an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.