Glitch cut 22,500 from health aid Software not updated with welfare system

-------------------------------------------------------------------------------- MAJA BECKSTROM STAFF WRITER -------------------------------------------------------------------------------- Nearly 22,500 poor people, mostly children, were dropped mistakenly from Medical Assistance health benefits when they left welfare because Minnesota failed to update its computer system. Families that were cut off should receive a letter next week informing them of the error and inviting them to reapply for the program. But some advocates say that's not enough and that the state should automatically re-enroll everyone who lost coverage.

``This is something that was overlooked in the flurry of implementing a brand new cash assistance program,'' said Kathleen Henry, the director of health care eligibility at the state Human Services Department.

The state does not know how many people who lost benefits would have been eligible to continue receiving them. About a third have since reapplied for coverage under Medical Assistance or Minnesota Care, Henry said. Some are likely no longer eligible or are enrolled in employer health care plans. But some are likely going without the health insurance they are entitled to as a result of the state's lapse.

The problem affects 22,463 people in 9,359 households who left welfare between January 1998 and May 2000, when the problem was fixed. These households stopped submitting the monthly reports required by the Minnesota Family Investment Program, the state's welfare program, because they found employment or for other reasons.

When the reports stopped coming, a county welfare worker closed down the family's welfare case. And because of an oversight, the computer system automatically shut down the family's medical benefits at the same time.

The source of the glitch predates changes in the welfare system when families who enrolled in Aid to Families with Dependent Children were automatically eligible for Medical Assistance. The state computer system linked the two programs and it did not occur to state employees to separate them after welfare changes were launched, Henry said.

A federal audit this spring revealed similar problems across the nation, Henry said, but Minnesota is among few states to take action. The computer system was retooled in May, and county workers were trained to evaluate whether a family leaving welfare might be eligible to continue receiving Medical Assistance.

The state also plans to reinstate automatically the 46 women who were pregnant at the time they lost health benefits and 1,174 children who were age 2 or younger. Other families will need to respond to the mailing, which should be sent out late this week. The state will reinstate anyone who is eligible and will reimburse any eligible patient who racked up medical bills while left uninsured, Henry said.

But legal advocates criticize the plan for putting the burden on welfare recipients to correct the state's mistake. At least three other states automatically reinstated everyone while their eligibility was being evaluated.

``We're not sure the mass mailing is really going to reach those people because many of them could have moved, and we think the response rate to a mailing notice will be very small,'' said Maureen O'Connell, a policy analyst with Legal Services Advocacy Project in St. Paul. ``We think the state has set up a reinstatement process that guarantees only a few people will come forward.''

The state defends its decision.

``Most of it becomes a workload issue,'' Henry said. ``Also, if we reinstated them all and weren't able to contact them to let them know they had been reinstated, then what would happen?''

Maja Beckstrom can be reached at mbeckstrom@pioneerpress.com or (651) 228-5295.

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-- Martin Thompson (mthom1927@aol.com), October 12, 2000