Despite claims, healthcare.gov is not enrolling applicants in Medicaid

People shopping for insurance on the federal marketplace may be informed they're eligible for Medicaid and that their information is being sent to state officials to sign them up. However, states say they aren't able to enroll them because they're receiving incomplete data from the Obama administration.

The Center for Medicare and Medicaid Services wrote a memo to the 36 states using the federal website last week acknowledging the information wasn't being transferred automatically and saying another system was being developed to send it. More complete files could be sent as soon as next week.

The technical problem could affect tens of thousands of Medicaid applicants and represents the latest issue to arise in the rollout of a website that's been plagued with long waits for users and other glitches.

Some users who fill out applications on the federal site may believe that they're already being enrolled in Medicaid or that state officials will contact them, even though the agencies aren't receiving the information they need, said Matt Salo, executive director of the National Association of Medicaid Directors. The data transfer problem is occurring in the 36 states where the federal site is deployed, regardless of whether they chose to expand Medicaid.

"Essentially, if you're a consumer on healthcare.gov, it will tell you you're eligible for Medicaid and the state agency will take care of it, but there's no real way for the state Medicaid agency to know anything about it," said Salo, who leads the nonpartisan membership group for state Medicaid chiefs.

The federal marketplace was designed to help people buy private insurance under President Barack Obama's health overhaul. If shoppers qualified for Medicaid, the site was supposed to send their data to the Medicaid agency in their state.

As explained on healthcare.gov, "When you finish this application, we'll tell you which programs you and your family qualify for. If it looks like anyone is eligible for Medicaid, we'll let the Medicaid agency know so your coverage can start in 2014."

The site also says: "If you or a member of your family qualify for Medicaid or CHIP, a representative will contact you to enroll." CHIP is a health insurance program for children.

The federal Center for Medicare and Medicaid Services has devised an alternative way of sending files including the patient information to the states.

"CMS announced that we will be providing states with additional flexibility to use existing processes to enroll individuals in Medicaid and CHIP who applied through the federal marketplace. This process will ensure that coverage will begin on Jan. 1 for newly eligible enrollees," said spokeswoman Emma Sandoe.

Salo said the federal government is currently sending states incomplete data files on people deemed eligible online — data called "flat files" — so that agencies can get a rough estimate of how many people they may need to enroll.

New files with more information could be sent as soon as Tuesday, Salo said. But states are unsure the new files will be complete or accurate enough for enrollments.

"States that want to can take it as gospel and use the information to enroll people," he said. "But that sets up the question, how sure are we the information is going to be correct? Is hasn't been up until now. Can the state afford to just take that on faith?"

Tony Keck, director of South Carolina's Department of Health and Human Services, said that so far his agency has been receiving garbled data that may include a name but no address or three digits from a social security number.

"What they're sending us is essentially the same type of bad data they're sending the insurance companies, and we can't do anything with it," Keck said. "That's frustrating, because there's going to be a lot of people who think they're enrolled, especially now that they're doing all the marketing and phone calls and enrollment's increasing on the website as it's improved."

He said he's worried that "Medicaid applications are going to get stuck in this black hole somewhere."

The administration notified state Medicaid directors in mid-September that the system wouldn't work as planned when the site went live Oct. 1. It's unclear when a final fix will be ready, Salo said.

It's also not clear how many applicants could be affected nationwide. Salo said it's too early to tell, and federal officials have not provided numbers.

Keck said South Carolina has received the incomplete data files on 8,700 Medicaid-eligible people who applied through the federal marketplace in October and November. However, he cautioned that he wasn't able to verify whether all were truly eligible or if some were already enrolled in Medicaid.

As of Wednesday, Florida officials said they're waiting on the federal government to transfer 35,056 applications, representing 48,664 individuals, who are eligible for Medicaid and CHIP. But federal health officials warned the "the eligibility indicator field on the flat file is not accurate and we have no way to validate these numbers," said Alexis Lambert, spokeswoman for the Department of Children and Families.

A spokesman for Ohio's Medicaid agency said it's having similar issues. The files are incomplete, and the information would have to be entered manually because of the format.

"The information is incomplete in regards to what is needed to verify eligibility," said Sam Rossi, a spokesman for the Ohio Department of Medicaid,

For states that expanded Medicaid programs to cover more low-income people as provided by the health care law, coverage for the newly eligible doesn't start until Jan. 1. But in states such as South Carolina where Republican leaders have refused the expansion, anyone currently eligible for Medicaid qualifies immediately. Half the states have expanded their programs, and the rest are either refusing to do so or still weighing options.

In the letter sent last week, CMS notified state Medicaid directors that states using the flat files to enroll applicants must apply for a temporary waiver. It also promised that the expanded flat files would include sufficient information to enroll people, such as dates of birth and social security numbers.

This "will ensure that enrollment can be completed in a timely way without regard to temporary file transfer system issues," reads the letter from Cindy Mann, deputy director of CMS. "It will also help states pace their workloads with respect to enrollment of residents who have applied through" the federal website.

The notice specifies that if a state ultimately determines someone who's enrolled through the transitional process actually isn't eligible, they can terminate the coverage after providing advance notice. People could appeal, and states have the option of continuing benefits "pending the outcome of a fair hearing," the letter reads.

For his part, South Carolina's Keck encourages people to go directly to the state website and enroll through the state's online application.

"It's going to be a gigantic logistical mess," he said. "You would think that the White House being caught in imprecise language about keeping your plan would learn to be more precise in their language. It's frustrating they continue to oversell what's happening."

Associated Press writers Kelli Kennedy in Miami and Ann Sanner in Columbus, Ohio, contributed to this report.