With the advent of welfare reform, including changes to the SSI program, more restrictive policies are being initiated in the cash assistance programs which will limit access to these benefits. Of primary concern is the impact such policies will have on medical coverage especially for children, pregnant women, and the elderly and disabled. Congress reflected this concern in the drafting of the welfare reform law by linking Medicaid eligibility to AFDC policies as they existed prior to the passage of the law so that States which designed more restrictive policies into their TANF plans would protect medical coverage for those families losing cash eligibility. Although we have developed our policies to maintain a cash and medical linkage, there is the potential for more restrictive guidelines to be developed in future years.

At the same time, in recent years, two court decisions have been handed down which make clear the states' responsibility to redetermine Medicaid eligibility under any other available category at the time of loss of eligibility for cash assistance. Under what is termed an "ex parte redetermination, at these two decisions required states in effect to do an automatic redetermination without the involvement of the consumer and based to the maximum extent possible on information already contained in the individuals file. HCFA has recently reinforced these guidelines in light of the welfare reform changes and all states policies in this area are under review not only by HCFA but by numerous advocacy agencies and legal organizations.

The main issue continues to be protection of medical coverage for those most vulnerable. Welfare reform was essentially limited to the cash and food stamp programs. Medicaid continues to be an entitlement program available to those who meet basic categorical and eligibility requirements. It is the primary vehicle for medical coverage of low income persons and families in this country. Barring future health care reform, Medicaid will continue to serve this role and takes on added significance as a needed support service for individuals going into the workforce as well as assisting in the transition from welfare to self-sufficiency. In addition, there continues to be a growing national problem concerning persons who are either uninsured or underinsured for health care. Millions of persons in this country go without routine health care because of the inability to pay for it, leading to increased emergency and catastrophic care and in many instances, care that is uncompensated. Medicaid is still the most viable health care program for dealing with this problem.

Provisions contained in KEESM 2621 currently provide for continuation of medical assistance for children and pregnant women affected by loss of cash eligibility due to work-related and CSE sanctions and KEESM 2636 also provides for continuous eligibility for these same individuals. The purpose of this policy memo is to require that (1) continuous of assistance be done automatically at the time of the cash closure without requiring a new application or requiring that the individual(s) make a separate contact with the agency to request continued medical, and (2) include other instances when assistance is to be continued when cash eligibility is lost due to such circumstances as excess income or resource closures and loss of disability status (particularly for children as a result of the new SSI provisions).

An automatic redetermination would not occur include instances in which the individual loses cash eligibility due to failure to cooperate with providing information or with a requirement that also affects medical eligibility. It is also does not include loss of eligibility as a result of the end of TransMed or extended medical coverage for non-pregnant adults. In instances such as the following where cash assistance is terminated, medical assistance would not continue or be redetermined.

1. Failure to return a Monthly Report Form (non-pregnant adults).

2. Failure to provide information necessary to determine continued eligibility.

3. Failure to pursue potential resources (non-pregnant adults).

4. Loss of contact.

5. Moved out of state.

6. Cash fraud conviction (non-pregnant adults).

7. Failure to return a complete and timely review form.

The following guidelines shall be applicable to automatic medical redeterminations:

1. Where a redetermination is required (e.g. work or CSE sanctions), those impacted by the cash closure shall be reviewed for potential eligibility under another Medicaid category except for children and pregnant women who meet the continuous eligibility guidelines of 2635. In such instances, assistance shall be continued under the MP program.

2. Where a category exists, a determination of continued medical eligibility shall be made at the time of the cash program closure. To the extent possible, this determination should be made as timely as possible to prevent any lapse in medical coverage.

3. The redetermination should be based on information available in the current file as well as available through data exchanges such as TPQY, SDX, etc.

4. Where additional information is needed, a request should be sent as quickly as possible to the recipient to complete the determination. The application form can also be used for this purpose. Prudent person concepts still apply in these redeterminations and when information is incomplete or inconsistent, cooperation from the recipient will be required. Medical eligibility would continue while information is being obtained as long as the client cooperates in the process.

5. If there is eligibility based on the information available or provided, the affected individuals are to be transferred to the appropriate medical program. An approval notice would need to be sent. The cash closure notice can be used for this purpose as well.

6. If there is ineligibility, the affected individuals are to be notified and once again, the cash closure notice can be used for this purpose.

7. The review period currently in effect for the cash program being closed should be retained and the medical case rereviewed at the time the previous review period ends. This allows for a timely review of eligibility factors particularly where the medical program is established based on information in the file. This period can also be shortened if necessary to parallel the food stamp review timeline.

Language found in certain closure notices informing the recipient of the need to reapply if medical assistance is needed will be deleted. This policy takes effect upon receipt of this memo.

DP:jmm