State officials are concerned that the proposed federal public charge rule could increase the uninsured rate, which would have a negative financial impact and increase health programs’ administrative burden.

The Department of Homeland Security (DHS) has proposed significant changes to public charge determination policies that would affect the immigration status of certain individuals. The concept of determining if an immigrant is a public charge — someone who would be unable to care for himself or herself — has been a provision in US immigration policies since the late 1800s.

Currently, individuals can be prevented from entering the United States or denied lawful permanent residence if they are determined to be a “public charge” based on their enrollment in cash assistance programs, such as Temporary Assistance for Needy Families or Supplemental Security Income, or if they need long-term institutional care funded by the government. However, as outlined in NASHP’s earlier blog, DHS proposes to substantially expand the list of public assistance programs that would be considered in public charge determinations, including use of non-emergency Medicaid health coverage.

The proposal calls for the consideration of the duration of time, or number of months, that certain immigrants use Medicaid, Supplemental Nutrition Assistance Program, housing assistance, etc. within a 36-month period beginning on the date the rule is finalized. There are other criteria used, including an immigrant’s age, financial status, and skill set, etc. to determine if he or she meets the public charge definition.

Although immigration policy is within the federal domain and the public charge determination is made by DHS, immigrants live and work in states. States must balance multiple factors related to immigration, including their workforce needs and stabilization of health insurance markets – both private and publicly subsidized. State officials have serious concerns about the chilling effect on enrollment, or the likelihood that individuals – whether they are at risk of being determined a public charge or not – will either dis-enroll or not re-enroll in coverage due to the potential implication it may have on their citizenship status. State officials fear what the effect of reducing coverage could have on their budgets and overall economies.

Within the proposed rule, DHS estimates Medicaid disenrollment and non-enrollment rates among individuals who would be directly subjected to the proposed rule at approximately 142,000 annually. However, state health officials and policy experts have expressed concern that the broader chilling effect on health coverage enrollment would be considerably greater. The Kaiser Family Foundation has estimated that between 2.1 and 4.9 million individuals currently enrolled in Medicaid/CHIP would dis-enroll due to the proposed rule. For example, even though the proposed rule does not take into account a family member’s enrollment in Medicaid, immigrant parents may not enroll or may dis-enroll their children who are eligible (even though they are not subject to this rule change) from fear that their children’s participation could affect their ability to obtain a green card in the future. Though the proposed rule does not include enrollment in the Children’s Health Insurance Program (CHIP) as a factor in public charge determinations, immigrant families concerned about the proposed rule changes may be wary of enrolling their children in either Medicaid or CHIP —even if the proposed rule changes are never finalized.

Officials from several states noted that as the rate of insured residents has grown, their uncompensated care costs have been trending downward, particularly in states that expanded Medicaid through the Affordable Care Act. But, if uninsured rates begin to rise due to the chilling effect on enrollment from this proposed public charge rule, states’ health care safety net systems will be significantly strained. State officials expressed concern that this likely rise in uncompensated health care costs due to the changes associated with the proposed rule could be considerable. Additionally, individuals without coverage may delay seeking care, which in turn could result in individuals addressing health issues only when they become urgent, which would also lead to increased health care system costs.

State officials are also weighing the operational challenges that will fall to states to implement the proposal. Although public charge determinations will continue to be conducted by federal officials, details for how DHS will access the data needed to affirm immigrants’ use of Medicaid and other public programs are vague or non-existent in the rule. State health officials have identified the following potential administrative issues:

• Challenges associated with identifying individuals’ participation in Medicaid: The proposed rule does not specify how information about individuals’ enrollment in public benefit programs will be collected or shared, and so the state role of providing data to DHS is unclear. Will DHS rely on immigrants’ self-attestation when completing their immigration applications? Or, will states be required to provide information about individuals’ enrollment in public benefit programs? If states are required to do so, would DHS routinely collect this information from state agencies, or contact state agencies on a case-by-case basis? Either of these data-sharing options requires significant state investments of staff time and other resources to develop and implement processes.
• Increased risk of churn: Many anticipate that the chilling effect of this proposed rule will result in churn, with individuals dis-enrolling and re-enrolling in coverage. Not only will periods of uninsurance result in unmet health care needs at a greater cost, but processing enrollments requires more state resources than do renewals. Most states seek to actively minimize churn as an administrative cost-saving measure, so states do not have the resources to meet an increase in the prevalence of it in the future.
• Handling increases in consumer inquiries: Due to the complexity of the proposed rule, if it is finalized, state health officials noted that both public health program enrollees and applicants will likely have a number of questions. This increase in the volume of consumer inquiries could place a substantial burden on call center staff and enrollment assisters. State health and human service agencies would also need to ensure that these frontline staff are appropriately informed about the rule changes.
• Possible changes to program documents, such as applications and outreach materials: The proposed rule is not retroactive, meaning that an individual’s use of the public benefit programs that are identified by DHS prior to the rule being finalized would not be a factor in future public charge determinations. However, if the rule does become final, although it likely won’t be a requirement for states to provide information about the potential immigration status implications of enrolling in public benefit programs, some state agencies may decide to do so to ensure that individuals are adequately informed. This could require states to expend resources to modify or develop new application or eligibility notices and outreach materials.

As state officials process the potential changes resulting from DHS considering participation in health coverage and other public benefit programs in determining whether an immigrant may qualify as a public charge, there are concerns about the financial implications for states. Specific cost estimates aren’t possible because the extent of the chilling effect is unknown, as is the impact on uncompensated care, and it is unclear the process (and possible system) changes states will need to make to share information with DHS. However, it is highly likely that the inclusion of health coverage in the federal determination of an immigrant as a public charge will have a potentially substantial impact on states. Comments on the proposed rule are due Dec. 10, 2018 and can be submitted here.