Robert Nelb, MPH Candidate 2009, Yale University, Senior Fellow, The Roosevelt Institution
As readers of this blog know, we became fans of Nelb's work when we came across a letter-to-the-editor he wrote regarding pointless paperwork. Robert is a senior fellow for The Roosevelt Institution and the winner of the Brookings Institution's Hamilton Project Economic Policy Innovation Prize.
Anyone who has worked to enroll eligible families into public health insurance programs knows that the application process is an uphill battle. Despite valiant efforts to simplify application forms, about 10 million uninsured children and adults are still eligible but not enrolled in Medicaid or CHIP. So in a new paper for the Brookings Institution's Hamilton Project, I asked the simple question: why do we need application forms anyway?
This question first came to me a few years ago, when I was working as a health outreach volunteer in Connecticut, trying to explain the pages and pages of forms to low-income families. Frustrated by all this bureaucracy, I decided one day to take a closer look at the fine print on the last page of Connecticut's application, and I found, to my surprise, that states already know who is eligible. All that information that we enter each year on our tax forms, all the automatic withholding on our wage stubs and all the data that we enter at the department of motor vehicles are part of a secure data system that all states have been using for years to verify eligibility in public programs. The paper forms and bureaucratic barriers are just an obstacle course for families to show that they really do want coverage.
Now I have never met parents who didn't want health care for their child, so I asked the next logical question: Why doesn't the government use all this existing information to automatically enroll eligible families in public programs without the need for an application form? Findings from behavioral economics suggest that opt-out policies are much more effective than opt-in ones. Moreover, this strategy has long been used successfully for Medicare Part B to give senior citizens the benefits that they deserve. For once, Congress actually agreed with me, and as a result of the hard work of many, many advocates, a new state option for automatic enrollment was included in the recent Children's Health Insurance Program Reauthorization Act (CHIPRA).
Some policymakers may say that they cannot afford to pay for the millions of uninsured Americans who are already eligible for public health insurance programs. But as I dug deeper, I found that all the administration and paperwork for means-tested programs cost taxpayers tens of billions of dollars a year. States that have reduced the need for application forms have been able to cut enrollment costs by more than half, which allows more taxpayer money to go directly to families in need. By my estimates, a fully implemented automatic enrollment policy would cover nearly all eligible beneficiaries and save about $3.2 billion in unnecessary administrative costs each year. CHIPRA also includes bonus payments to states who implement automatic enrollment policies, making it easier than ever for states to finally close the gap in enrollment for public health insurance programs.
As policymakers consider proposals to expand health care coverage to all Americans, the lessons of effortless enrollment are important to remember. Politicians may disagree on questions of big government or small government, but hopefully we can all agree that good government is good policy for America's families.
The views expressed by guest bloggers do not necessarily reflect the views of the Center for Children and Families.
FYI, for those of you who are interested in learning more about this policy idea, we will be having a briefing on Capitol Hill on Monday, June 1st at 10:30 in SVC 202/203 featuring a number of prominent policy experts discussing this idea, including Stan Dorn from the Urban Institute, Stuart Butler from the Heritage Foundation, and Jeffery Kling from the Brookings Institution, as well as a state eligibility officer to provide a practical perspective.
The registration form should go up later this week. If you're interested, just email me at robert.nelb (at) yale.edu.
Thanks!
Great job, Robert! Thank you for your thought provoking policy proposal and congratulations on winning the Brookings Institution award.
If you haven't yet seen it, Children's Defense Fund-Texas has recently released our follow-up 2009 "In Harm's Way" report which includes new and equally infuriating stories of children losing health coverage due to pointless paperwork and red-tape. Thanks for keeping Devante's spirit alive.
www.childrensdefense.org/InHarmsWay
Robert, since blogging about your op-ed, I have anxiously awaited the release of your paper. Your fresh perspective is welcomed.
In your report, you cite a 2001 report by Haley and Kenney indicating that 39% of parents of low-income uninsured who know about Medicaid and CHIP don’t enroll due to administrative hassles. Since the time that study was done, there is much greater awareness of eligibility and as a result even a higher percentage of eligible families are deterred by paperwork fatigue and unnecessary administrative hurdles they must overcome to get and keep their children enrolled.
One of the important points you make is that states are hampered by outdated computer systems. You point out that the federal government can help states move to more efficient systems by providing enhanced federal funding for eligibility and administrative systems investments.
While moving toward automatic enrollment and better systems, there are a number of low cost steps states can take to reduce bureaucratic red tape. To start, states should review and eliminate any unnecessary documents they require families to provide. For example, why should someone who is salaried have to provide four or eight consecutive pay stubs when one with year-to-date earnings is clear evidence of stable weekly income? States could analyze case history, as Louisiana (http://ccf.georgetown.edu/index/cms-filesystem-action?file=postcards/the%20louisiana%20experience.pdf) has done, to determine the types of cases, which are highly unlikely to have eligibility changes, and automatically renew coverage for those children. An example is when a child lives with a caretaker whose income is not counted. Another way to reduce barriers to coverage is to implement 12-month continuous eligibility.
I was drawn in particular to your discussion on behavior and how there is a growing body of evidence challenging classic assumptions that individuals have an unlimited capacity to acquire and process information and then act in their own best interest. You suggest that policymakers can exploit the fact that human choices differ from this framework in predictable ways to improve public policies. Unfortunately, the opposite is in play. The predictability that paperwork fatigue will discourage eligible individuals from accessing benefits if the administrative hurdles are set too high has often driven policies that make it difficult for families to enroll and retain coverage. This has been seen particularly in tough economic times when states roll back paperwork simplification strategies.
It is encouraging to note that health care reform discussions recognize the importance of streamlining and simplifying the system, and providing 12-month continuous coverage. If we are serious about guaranteeing everyone in America with access to health coverage, we must be committed to systems that support enrollment and retention.
Thank Anat for sharing the Children Defense Fund-Texas's latest report. I certainly hope that we can keep Devante's spirit alive. Enough is enough!
Thanks Tricia for your excellent insights. I agree that in this economy we need to be especially vigilant in identifying the subtle ways that states use unnecessary paperwork to prevent the uninsured from accessing the benefits that they are entitled to.
Managing the paperwork on my employer-sponsored health insurance is tough enough. The hassle can only be multiplied ten-fold for low income families and those with children with disabilities.
I am really interested in the briefing. Can you provide more details? Is it open to media & public?
Robert--
More than the proposed solution--automatic enrollment of eligible children--you have identified the behavioral factors that must be acknowledged in all outreach and enrollment initiatives (in the absence of automatic enrollment).
Families do **not** always act in the best interest of their children, as has been assumed by "traditional" eligibility policies and procedures for need based programs. I know this from 29 years experience in eligibility, having begun my career as an eligibility caseworker in 1980.
A few observations from the front lines in Louisiana where our Medicaid/LacHIP eliibility employees (managers, supervisors, caseworkers) are actively involved in pro-active community outreach to overcome these behavioral factors:
Bounded Rationality--in our experience, many families mistakenly believe their child is ineligible, either because they have received bad information ("misinformation is worse than no information at all")or they have screened themselves out.
Bounded Willpower--procastination was a major factor in Louisiana families failing to renew. While completing and mailing a one page renewal form might seem simple to some, families frequently did not comply, even after follow up reminder telephone calls. They were grateful for the call and said they would mail the form "this afternoon" or "tomorrow" but it never came. It was for that reason in 2003 that we eliminated the requirement in Louisiana for a signed renewal form and began allowing the review of eligibility to be completed during that reminder telephone call (which has now evolved to renewal by phone, without ever mailing a renewal form).
Bounded Self-Interest--I agree that the prospect of interacting with a government agency on "their turf" is a strong deterrent. Perception is reality and people fear the encounter-- the overall hassle factor, intrusive questions, red tape, attitude that they "allowed" their children's case to get closed by failing to do something as simple as mail in a renewal form . . .