Lessons from New York’s Disaster Relief Medicaid plan used after 9/11

In the wake of the devastating 2005 hurricanes, some analysts have suggested New York’s Disaster Relief Medicaid plan that was used after the 9/11 attacks be used as a model for other large-scale disasters. But while that program worked very well, United Hospital Fund of New York president James Tallon tells State Health Watch he isn’t sure there are sufficient parallels to make it worthwhile.

“Every disaster,” he says, “has its own character.”

Former United Hospital Fund vice president Kathryn Haslinger analyzed the Disaster Relief Medicaid program in the January/February issue of Health Affairs, saying the time-limited (fourth months) experiment in radical simplification “met with an extraordinary response and, however unintended, offered a new way of thinking about public health insurance programs.”

At the time of the 2001 attacks, she said, New York already was facing a serious coverage problem. Before 9/11, an estimated 1.6 million New Yorkers did not have health insurance. Most of the uninsured had low-wage jobs that did not offer coverage, and many had incomes within the limits of New York’s public health insurance program.

New York had been in the forefront of state efforts to expand eligibility, she said, but not to streamline enrollment requirements.

“Unlike some other states,” she wrote, “New York still used most of its old program rules for adults. The state had developed a new application form that, while shorter, was still eight pages long. Adult Medicaid applicants still faced a resource test and daunting requirements for documenting income, assets, and many other elements.”

But in the face of a crisis, officials made the extraordinary decision to put the Disaster Relief Medicaid program in place. The city, state, and federal governments agreed to temporarily suspend annual recertification requirements for many of those already covered and to forgo most of the questioning and documentation in the application process, so that a New York City resident could apply on a 1-page form.

Not close to business as usual

Complicating the effort was that after 9/11 nothing in New York City operated in a business-as-usual manner. Phone lines and transfer stations were severely damaged. City Medicaid offices had no access to the state’s Medicaid computer system. Many people living or working near the disaster site could not get to their homes or offices; and even for those distant from the site, simple errands took hours.

“Under these extraordinary circumstances, New York’s officials announced an approach to administering a public benefit that went far beyond any policy prescription ever proposed,” Ms. Haslinger said. “This presented the opportunity to make this bold stroke widely known throughout the city and to enable organizations working with low-income New Yorkers to help them get health insurance.”

The program was in operation by late September 2001, with applicants required to go to one of 22 special Medicaid offices to complete the special Disaster Relief Medicaid application. Medicaid workers were instructed to review the form, verify only the applicant’s identity, not requesting any other documentation, and then make a decision. Most applicants received Medicaid authorization at the end of their eligibility interview.

Ms. Haslinger said two elements mark the difference between Disaster Relief Medicaid and what had been in place before 9/11: 1) the application was just one page with virtually no documentation requirements; and 2) coverage began immediately.

Three-part strategy

Working with a coalition of community-based organizations, advocates, and representatives of health care providers and managed care plans, United Hospital Fund devised a three-part strategy to support Disaster Relief Medicaid implementation, Ms. Haslinger said:

1. Getting the word out. The first announcement of Disaster Relief Medicaid was in a Sept. 19, 2001, press release from New York Gov. George Pataki. Those involved were concerned that the state government did not seem to be planning to widely disseminate information about expedited coverage and so started their own multipronged campaign to make sure that potential beneficiaries as well as providers were familiar with the new temporary program. First came two training efforts to explain the new rules, one directed toward organizations working with potential applicants and the other aimed at providers. There also was a public information campaign with ads at bus stops, on billboards, and in newspapers, and stories were pitched to national and local media outlets.

2. Supporting local government. Ms. Haslinger said offers of assistance with public education, outreach, and enrollment were, not surprisingly, met with ambivalence by a stressed and stretched city administration. “Where we saw potential for expanding public participation through community education,” she said, “the city saw increased demand and potential breaches in program integrity. They rejected proposals to allow providers to submit Disaster Relief Medicaid applications on behalf of their clients, fearing that the emergency paper system would be too easy to abuse. City administrators did accept our offer to help pay for messengers to move the volume of paper generated by the temporary process. Although this might seem like an unusual expense in the 21st century, we were dealing with a process designed to work without any local computer support because the computer system did not work.”

3. Advocacy and compromise. Working together on the emergency program, advocacy organizations and the city government developed a closer working relationship than had been the case before. Ms. Haslinger said it was a risky process for both sides. Advocates provided rapid feedback on developments on the ground, and city administrators shared a candid picture of operational challenges. “Through dialogue, compromises, and accommodations were developed that strengthened Disaster Relief Medicaid implementation,” she said.

As enrollment numbers rose, planners began to think about what would happen when the program’s four-month enrollment window closed. People who enrolled on Oct. 1, 2001, were slated to lose coverage at the end of January 2002. A transition plan was devised in which new enrollments ended Jan. 31, but coverage for those already enrolled continued beyond the original end dates. Disaster Relief Medicaid enrollees were required to complete a new state application covering Medicaid and New York’s Family Health Plus Program, provide all required documentation, and appear for a personal interview at a Medicaid office.

Diverse group enrolled

When enrollment in the disaster program closed Jan. 31, 2002, nearly 350,000 people had gained health coverage through it. Preliminary findings arising out of efforts to profile those who enrolled indicated they were a diverse group. Only about 25% spoke English as their primary language, and most said they had not applied for Medicaid in the past. Nearly one-third said they hadn’t tried to apply for Medicaid before because they had been covered through their job or because their financial circumstances recently had deteriorated.

Ms. Haslinger concluded that the Disaster Relief Medicaid program “did not design new strategies for increasing program participation while ensuring program integrity. It was not the obvious next step in a carefully choreographed incremental strategy for reducing enrollment barriers. As a Medicaid policy for ordinary times, it arguably went too far and created a sense that no one was watching.”

But she also said it did what outreach campaigns, TV ads, and incremental reform have failed to do — it got people excited enough to press their friends and family to go down and get in line and demonstrated that low-income people need and want health insurance and will apply when the program operates on terms that make sense to them: an application that can be completed within minutes and an answer that comes right away.

“The challenge going forward is to begin our program design discussions from a new starting point,” Ms. Haslinger wrote. “Now we know what a simple health insurance application looks like. It does not ask you to explain how you manage on a paltry income; it does not demand that you prove that potential sources of income do not exist, or that you do not have resources that are found in less than 1% of the households in your income range; and it does not require you to offer information that might subject you to unwanted contact with a child’s absent parent.

“Instead of starting with the full list of welfare-based questions and requirements and asking what could be eliminated, the Disaster Relief Medicaid experience instructs us to start from the model that works and determine which elements absolutely must be added to address legitimate concerns with program integrity,” she continued.

Even as the Disaster Relief Medicaid program can be used as a template for Medicaid reform, the question also arises whether there are lessons for future disasters. Mr. Tallon says the New York experience of 2001 may have been unique because even though there was a significant loss of life and substantial disruption, the infrastructure and health care providers remained basically in place, unlike the situation at the Gulf Coast, where much of the health care system and infrastructure disappeared.

“There was an extraordinary difference,” he tells SHW. “The Gulf Coast infrastructure was destroyed and the people were relocated.”

It also was significant, Mr. Tallon says, that the commitment that New York City had made to health coverage for the poor before 9/11 was a major factor in how the city dealt with 9/11.

Waivers already had been approved to provide coverage for adults up to 100% of the federal poverty level, parents to 150% of poverty, and children to 200%. And a court decision ordering coverage for legal immigrants was being implemented.

“There was a comprehensive payment system in place,” Mr. Tallon says, “that was in some process of being implemented on 9/11. The structure was a comprehensive coverage structure. We were dealing with emergency conditions and the significant challenge of how to simplify the application process. And all that was in the context of the city’s commitment to major coverage. You need to contrast that with the commitment the federal and state governments had made in the Gulf Coast.”

Mr. Tallon says there were some similarities in that coverage and health care among the poor got a lot more attention in the months after the event. In the midst of the feelings of terror that came from the 9/11 attack and the anthrax incidents in early October, there was a general desire to have health insurance available to everyone. There was a genuine sense of community and support for the idea of getting people coverage, he says.

“We haven’t solved all the problems since then,” Mr. Tallon concludes, “but the number of uninsured is declining modestly. In general, the use of public programs is demonstrating some continuation of the attitude to provide coverage.”

He notes that in a disaster it’s not possible to change attitudes that existed before the disaster. There was no debate over the New York City plan, Mr. Tallon notes, because there already were waivers for expanded eligibility and a court order on legal immigrants.

“There didn’t have to be a policy debate because that debate had already been held,” he says.

Looking to the future, Mr. Tallon says that when faced with a disaster, people really do see the importance of getting people health care.

“It takes just one avian flu epidemic to remind us how important coverage is,” he says.

[Ms. Haslinger’s article is on-line at http://content.healthaffairs.org. Contact Mr. Tallon at (212) 494-0700.]