In the past 18 months, about 23,000 people have left Hawaii’s Medicaid health insurance program, or Med-QUEST.

The enrollment plunge is largely attributed to a switch made in March 2018, when the Hawaii Department of Human Services began to automatically crosscheck its data with other state departments to identify those who began to earn too much to qualify and others who had died.

“We made some improvements in matching with the Department of Labor’s wage data as well as the Department of Health’s vital records,” said Judy Mohr Peterson, administrator of the Hawaii DHS Med-QUEST Division. “There’s also a very good economy, and so of course hopefully part of it is because people have obtained jobs and insurance through their employer.”

Hawaii Medicaid Director Dr Judy Mohr Peterson Briefing on Homeless Solutions.
Hawaii Med-QUEST Administrator Judy Mohr Peterson said a strong economy and a new income verification system are reasons for a drop in the state Medicaid enrollment. Cory Lum/Civil Beat

It may be technological progress, but some health workers are concerned that the updated methodology is resulting in some abrupt terminations for eligible Med-QUEST enrollees.

Med-QUEST enrollment fell from 365,000 in the spring of 2018 to about 341,000 as of August 2019. The recent decrease stands out after nearly a decade of steady growth in Medicaid enrollment, and accounts for about 7% of enrollees.

The public health insurance program covers low-income and some eligible middle-income Americans, including pregnant women, children, people with disabilities and the elderly.

The department appears to be more quickly identifying people who earn enough to disqualify them. It also has been able to more efficiently deactivate Medicaid cases for enrollees who have passed away. About 1,200 enrollees have died since last year.

Meredith Nichols, the assistant administrator of Hawaii’s DHS Med-QUEST division, said a new national reporting network has also enabled DHS to identify people with health insurance in different states.

“The cross-checking happened before, but not in a real time way,” she said. “It wasn’t as automated a check as we are able to accomplish now.”

Any change to a Medicaid enrollee’s income, address or household, whether it’s a birth or adoption, must be reported to DHS within 10 days. But not everyone complies with that quick turnaround.

If involuntarily dropped from Med-QUEST, people may be left uninsured until they acquire health insurance through an employer or pay out of pocket for an insurance plan through the federal marketplace.

Kalihi Palama Health Center Hue Nettrour interviews client.
Hawaii Medicaid eligibility worker Hue Nettrour says she has worked with many patients who lost insurance because they failed to submit documentation of a change in address, income or household. Cory Lum/Civil Beat

Kalihi-Palama Health Center Medicaid eligibility worker Hue Nettrour said the department is stricter now and most of the patients she has assisted had their cases terminated because they failed to submit documents on time.

“They don’t update their pay stub and then (Med-QUEST) denies it,” Nettrour said. “I had one more yesterday and two last week.”

That can happen if there’s a “mismatch” in wage data, says Nichols. If a discrepancy is detected, the Hawaii Department of Human Services sends an income verification request, she said.

“In theory, they got a raise at work, or they lost their job — as long as they’re communicating to us those changes in a timely way, those are our best-case scenarios,” said Nichols.

And if not?

“Then their case will be terminated,” she said.

Diana Shaw, executive director of the Lāna‘i Community Health Center, said that her staff told her that Med-QUEST has been cutting off medical benefits without prior notice, and sometimes the explanation comes days later in the mail.

Outreach workers on Lanai have noticed stricter insurance eligibility verification methods from the Hawaii Med-QUEST division. New efficiencies at the department have resulted in an enrollment drop across the state. 

Most frequently, the letter from DHS says the information the department requested was not provided, but the clinic’s patients say they never received the request.

Usually, if they are indeed still eligible, Lanai Community Health Center outreach workers are able to reinstate the patient’s benefits later, Shaw said.

“We are very concerned about any action, federal or state, that limits access to health insurance coverage for our patients and the community,” Shaw said. “We continue to work to ensure we are identifying issues and addressing them aggressively.”

Nettrour says some of her Oahu patients were dropped from Med-QUEST after they worked overtime hours and got a temporary pay boost.

Others are stuck without insurance when their employers do not comply with Hawaii state law. Hawaii employees who work at least 20 hours a week must be offered health insurance by their employers at no more than 1.5% of their wages for employee-only coverage.

“I usually try to push them to get insurance, and they say, ‘Oh, they don’t have,'” Nettrour said. “I say, ‘Just ask them nicely.’ But some of them got fired in the past (for asking).”

Then there are other patients stuck in-between — employed more than 20 hours, often at multiple jobs, who are not eligible for Medicaid or Medicare but cannot afford to pay for health insurance out of pocket.

Nettrour, 66, says she continues to work herself because otherwise she wouldn’t be able to pay for health insurance.

“I’ll probably be working for a while, which is fine. I like the work anyway, but I know people who cannot retire because they’ll lose insurance like me,” she said.

Slightly more than half of all Hawaii residents acquire health insurance through their employers.

Approximately one-third of the population relies on public assistance for health care coverage: Medicaid covers about 18% of Hawaii’s population, and Medicare, the health insurance program for people 65 or older, covers another 15%.  The cost of running the public health insurance program is shared by the state and federal government.

The Department of Human Services will soon seek bids for a new system to verify peoples’ financial assets.

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