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Louisiana Removes Thousands of Ineligible People from Medicaid Rolls

December 27, 2019

Louisiana removed Medicaid benefits from 46,000 people who failed to document their income eligibility in an annual information request to renew coverage.

The state’s health department had sent warning letters to 52,000 Medicaid recipients telling them they had until October 31 to submit the information. The November removal is a decrease from 2018, when the state dropped 71,000 enrollees who failed to document their eligibility.

Louisiana is not the only state where ineligible people are signing up for Medicaid. A report released on November 18 by the federal Centers for Medicare and Medicaid Services (CMS) shows improper payments due to “insufficient documentation” of eligibility amounted to $57.36 billion for fiscal year 2019.

Blind Eye Incentive

An analysis of the CMS data by Brian Blase of the Galen Institute and Aaron Yelowitz of the Cato Institute found improper payments have grown rapidly since Medicaid was expanded under Obamacare. Louisiana expanded its program in 2016.

In an op-ed published on November 18 in the Wall Street Journal, Blase and Yelowitz say improper spending in Medicaid more than tripled since Medicaid expansion and that the Obama administration stopped auditing Medicaid eligibility in order to get as many people as possible enrolled in the program. Audits resumed in 2018 under the Trump administration.

States have an incentive to turn a blind eye to eligibility determination because Medicaid is a “cash cow,” the authors write. A federal audit found more than half the people in California’s Medicaid program had eligibility red flags, Blase and Yelowitz write.

“Whether out of greed or incompetence, many states neglect to obtain proper documentation and fail to verify income eligibility and citizenship,” the authors write.

Blase and Yelowitz estimate 2.3 million to 3.3 million Medicaid recipients may exceed eligible income levels.

“Improper payments in Medicaid are a real problem for policymakers, and it is imperative that CMS finally take this problem seriously,” the authors write. 

 

—Staff reports