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Presumptive Eligibility for Medicaid...

Presumptive Eligibility for Medicaid Poses a Serious Threat to Program Integrity

By: Jonathan Bain - January 9, 2024

Jonathan Bain

There’s a desire among some Mississippi lawmakers to add a presumptive eligibility option in the state’s Medicaid program. Yet, as Jonathan Bain writes, they are falling into the same trap that’s claimed legislators in other states with the “trust but don’t verify” policy. 

Last year, just as the crisp, freshness of the spring air transformed into the thick haze that signals summer’s approach, I finally did something I’ve wanted to do for quite some time—I bought my first truck. 

Excitement cannot adequately describe my emotions as I pulled onto the lot and saw the truck waiting for me. I took it for a test drive and decided I wanted it. Unfortunately, this is where a lot of the fun of purchasing a vehicle stops—when you must talk business and negotiate what you’ll be paying for it. 

Funnily enough, the dealership wouldn’t sell me the truck until they verified I could pay for it. In life, this is how most transactions play out. No matter what the good or service being offered is, most of the time the party offering it will want to confirm that you can pay them for it. The dealership did not accept my verbal attestation of income or assets before deciding, they performed a deep-dive on my credit report and determined I was trustworthy after that process played out—not before

Therein lies the problems with presumptive eligibility in the Medicaid program. 

Presumptive eligibility was introduced by Congress in 1986 and was intended to be a narrow option for states to use with certain populations applying for Medicaid coverage. In short, presumptive eligibility is a way of granting health care services to people who may qualify, before verifying basic eligibility for the program—like my car dealer giving me a brand-new truck without confirming that I would pay for it, or even be eligible to drive it.

When ObamaCare was rolled out this past decade, presumptive eligibility was expanded to an entirely new class of able-bodied adults—and unsurprisingly, things got out of hand. 

Rather than going through the proper eligibility channels, this new wave of presumptive eligibility allowed hospitals to directly enroll people in Medicaid based on no evidence at all, and then start racking up charges. Shockingly, the only requirement currently in place is a verbal attestation of having a low income—meaning the only “documentation” needed is for the patient to say so. That patient then remains on Medicaid until an application is completed or until they are removed at the end of the following month. Medical care is approved and provided in the meantime, tests are run, and treatment is provided, and the bills are charged to the taxpayers. 

If that’s not shocking enough, hospitals even have the authority to perform determinations on family members and “eligible individuals within the broader community.” This means that someone doesn’t have to be receiving services from the hospital to be deemed presumptively eligible for Medicaid—the hospital could say that a visiting family member qualifies and enroll them into the program before any paperwork had been completed. 

Naturally, such a proposition comes with massive program integrity concerns. There are performance standards hospitals should be held to concerning presumptive eligibility, but these are mere suggestions and not enforceable metrics that must be met. Even worse, states cannot recoup Medicaid funds spent on patients deemed presumptively eligible at the time of service but were later removed because they did not qualify. 

That’s worth repeating: States cannot recoup Medicaid funds that were spent on patients treated under presumptive eligibility and later found never to have been eligible in the first place.

That’s like me saying I could pay for the new truck, drive it off the lot, and straight into a month-long demolition derby with it. 

Then, when the bill came due the following month, I simply walk away and say, “no harm, no foul—the taxpayers will cover it!”

In the real world, this has created an almost perverse incentive for hospitals and providers alike—if there are no performance standards to adhere to, and the state cannot collect misallocated Medicaid funds, what is stopping hospitals from claiming everyone is presumptively eligible for services? It benefits the hospitals that can rack up bottomless charges, and it benefits the patients who can take advantage of “free” health care. 

The only ones who pay for it are you and me, the taxpayers stuck with the bill.

Some might argue that it’s apples and oranges to compare a new car with the need for medical treatment. But that doesn’t mean there isn’t a price tag for both, nor does it discredit the concerns with presumptive eligibility nor prove the merits of the proposal.

This question is very real. In Mississippi, there’s a desire among some lawmakers to add a presumptive eligibility option in our Medicaid program. While I’m sure their intentions are noble, they are falling into the same trap that has claimed many legislators before them in other states—who found that a “trust but don’t verify” policy fails every time the government tries to implement it. 

About the Author(s)
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Jonathan Bain

Jonathan Bain is a Senior Research Fellow at the Foundation for Government Accountability, where he conducts research on a variety of topics, including: welfare reform, restoring a free-market to health care, cutting red tape and reducing barriers to work, and restoring integrity in elections. Prior to joining FGA, Jonathan spent time as an independent contractor developing a policy research and analysis skill set while finishing his degree. He holds a Bachelor of Arts in Political Science from Mississippi State University.