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What One Hand Giveth, the Other Hand Taketh Away

February 1, 2000

How New York's Pregnancy-Related Medicaid Recoupment Policy Hurts Low-Income Families.

In 1987, the New York State Legislature authorized the Prenatal Care Assistance Program that funded health care providers to furnish prenatal, delivery, post-partum, and newborn health care services to low-income women throughout New York.  Around the same time, Congress enacted the Poverty Level Pregnant Women Medicaid Program to expand Medicaid eligibility so that low-income pregnant women throughout the country could obtain Medicaid funded prenatal, birth related, and post-partum care.  Both programs were created to achieve a critically important goal:  the birth of healthy children to low-income women.  With their simple and liberal Medicaid eligibility requirements, and enhanced funding of prenatal care providers, these programs were intended to make it easy for low-income women to obtain essential prenatal and birth related health care.

In New York State, however, these laudable objectives have been compromised by policies and practices the state has adopted to recoup birth related Medicaid expenditures retroactively from fathers after their children are born.  When applying for Medicaid, pregnant women are not advised that their babies’ fathers will ultimately be held liable for the Medicaid expenses they incur.  Instead, they learn of this policy after their babies are born, when local social service districts sue the fathers, often for thousands of dollars, to recover the costs of care. In cases where the father is living with and supporting the mother and child, the financial hardship caused by court-ordered repayment of Medicaid expenditures can threaten the welfare of the family.  New York's recoupment practices, which do not exist in most other states, deplete low-income families' already limited financial resources, decreasing the money that otherwise would be spent on the families' basic necessities, and compounding the stress associated with trying to maintain a family on minimal income.  If the state’s policy was clearly articulated to women when they applied for Medicaid, many would decline coverage, thereby undermining the goals of state and federal programs aimed at promoting healthy births.

This paper provides an overview of New York’s Medicaid recoupment policies, using case studies to illustrate their effects.  Within the context of the development of the Prenatal Care Assistance Program and the Poverty Level Pregnant Women Medicaid Program, the paper examines the federal and state laws surrounding the recoupment of Medicaid expenses and offers an overview of other states’ practices.  The paper concludes with recommendations for legislative amendments that would align New York with the forty states that either do not pursue fathers to recover pregnancy related Medicaid expenses or whose practices reflect a greater sensitivity to the financial fragility of low-income families.

Even as this paper was being prepared, indications of changes in New York’s recoupment practices were surfacing.  On January 12, 2000, in an Informational Letter titled “Child Support Cooperation: Questions and Answers,” the New York State Office of Temporary and Disability Assistance specified three instances in which the recovery of pregnancy-related Medicaid costs should not be pursued:

a)  in the case of an unmarried woman, if the unwed father was on Temporary Assistance or Medicaid, or had income and resources at or below the applicable Medicaid standards at the time of the child’s birth;
b)  in the case of an unwed father or husband who is currently on Temporary Assistance or Medicaid, or who has income and resources at or below the applicable Medicaid standards; or 
c)  in the case of an unmarried woman, if the unwed father’s income and resources were used in determining the mother’s eligibility during pregnancy.

While it has not been promulgated as a formal policy change or officially communicated to local social services districts, this informal policy directive is encouraging.  It stands as a good beginning toward the enactment of policies that will protect the families of the thousands of low-income women who need, and are entitled to, Medicaid coverage for prenatal and birth related care.  

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