Manatt on Health: Medicaid Edition - Proposed Public Charge Regulation Could Have Significant Coverage Impact

by Manatt, Phelps & Phillips, LLP
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The Department of Homeland Security (DHS) has released a long-anticipated proposed rule that would dramatically change the extent to which the use of public benefits—including Medicaid and the Medicare low-income drug subsidy—can impact certain immigrants’ legal status. Federal law already restricts immigrants' access to benefits, and this rule impacts immigrants legally in the country who are accessing benefits they are eligible to receive under the law. Immigrants seeking admission to the United States, extension of stay, change of status or adjustment of their status to become a lawful permanent resident (LPR, or green card holder) can be denied if they are found by DHS likely to become a “public charge,” or dependent on the government for financial support.

The structure of the rule gives DHS substantial discretion to assess whether someone is likely to become a public charge; that discretion, coupled with the complexity of the rule, is likely to generate confusion about who is impacted and what benefits are included, deterring immigrants from using needed benefits—including benefits that are not implicated by the rule. Family members of immigrants who are citizens may also be deterred from seeking or maintaining benefits. According to a newly released Manatt Health analysis, nationwide, 22.2 million noncitizens and a total of 41.1 million noncitizens and their family members currently living in the United States (12.7% of the total United States population) could potentially be impacted as a result of the proposed changes in public charge policy. Of citizen family members, more than half (10.7 million) are citizen children living in families with one or more noncitizen family members. While the rule is styled as an immigration regulation, its impact will ripple across the healthcare industry, states and localities.

This Manatt on Health: Medicaid Edition provides an overview of key changes in DHS’s “Inadmissibility on Public Charge Grounds” proposed rule and explores likely implications of the rule, were it to be finalized. Manatt Health also analyzed the rule for a Robert Wood Johnson Foundation State Health & Value Strategies webinar.

Key Proposed Changes

Under the Immigration and Nationality Act (INA), applicants for temporary or permanent visas, admission or adjustment of status to an LPR may be denied if they are determined likely to become a public charge.1 In 1999, DHS issued “Field Guidance on Deportability and Inadmissibility on Public Charge Grounds” (Field Guidance) to define “public charge.”2 The Field Guidance defines a public charge as an immigrant who “has become or is likely to become primarily dependent on the government for subsistence.” If finalized, the proposed rule would, for the first time, codify in regulations a definition of “public charge” and significantly broaden the policy reflected in the statute and long-standing subregulatory guidance.

New Groups of Immigrants Subject to Public Charge. Consistent with the statute, the proposed regulation would impact individuals who are seeking to legally enter the United States or who are already in the country legally and are seeking to adjust their status to become an LPR (i.e., changing from a visa to a green card). The proposed rule also would expand the public charge determination to a new group of immigrants: individuals seeking an extension of stay or a change of status (e.g., extending a current visa or changing visa types such as from a student visa to an employment visa).

New Definition of “Public Charge.” Long-standing guidance directed that individuals may be considered likely to become a public charge if they are “primarily dependent” on public benefits. The proposed rule would change the definition of a public charge to an immigrant “who receives one or more public benefit.”3 The use of benefits is one factor among several used to make a public charge determination. The determination framework is described in more detail below.

New Public Benefits Included in Public Charge Determination. The proposed rule expands the scope of public benefits considered in a public charge determination to include an array of health, nutrition and housing benefits.4 For the first time, public charge determinations would consider coverage provided through Medicaid (other than benefits provided to treat an emergency medical condition, Medicaid benefits provided under the Individuals with Disabilities Education Act (IDEA), school-based Medicaid benefits and benefits provided to certain children of United States citizens whose citizenship status is pending).5 The Medicare Part D low-income subsidy (LIS) also is included in the proposed “public benefit” definition.6

The proposed rule does not include Marketplace subsidies or the Children’s Health Insurance Program (CHIP) as public benefits, although DHS seeks comment on whether CHIP should be included in the final rule. DHS notes that it is considering including CHIP because federal expenditures for CHIP are significant and, like Medicaid, it provides for basic living needs, and reliance on CHIP could indicate lack of self-sufficiency. Even if CHIP is not included, some states use CHIP funding to finance the cost of Medicaid children and some pregnant women. It is unclear how the proposal would treat individuals who use Medicaid in such states.

New Tests for Public Charge. The rule proposes a complex approach to assessing whether someone is a public charge; the approach is appropriately derived from statutory factors that have long guided public charge determinations, but it would vest DHS officials with a significant degree of discretion in administering the rules.7 The proposed rule maintains a long-standing “totality of the circumstances” analysis that considers a variety of factors—including age, health and financial status—when making a public charge determination, but it assigns significant negative weight to the use of public benefits in the assessment of whether or not an immigrant is likely to become a public charge. It also proposes to consider as negative elements in this analysis circumstances such as earnings under 125% of the Federal Poverty Level (FPL), having a health condition that affects the ability to work or care for oneself, a lack of credit history and having a large family.

Potential Impact

The Chilling Effect on Legal Immigrants and Their Families. As proposed, the new “public charge” definition would impact the immigration status and prospects of millions of immigrants who are eligible to use certain health and human services benefits that would now be considered when the government makes public charge determinations. The new definition of “public benefits,” the complexity of the proposed rule’s structure and the discretionary nature in which it can be applied will create a chilling effect, deterring noncitizens and their citizen family members’ use of public benefits, programs and services. Using data from the American Community Survey, Manatt Health estimates that this “potentially chilled population” could comprise as many as 22.2 million noncitizens and a total of 41.1 million noncitizens and their family members.

It will be difficult for individuals to determine whether and when they are at risk of hitting the monetary and durational thresholds for use of benefits outlined in the rule. The reality is that low-income working immigrants who utilize benefits enumerated in the rule will quickly meet the established thresholds and will fear doing so. Immigrants also are likely to experience confusion about which benefits will be considered as part of a public charge determination. Participation in Medicaid, CHIP and other health and human services benefits programs is likely to decline, leading to lost productivity, adverse health effects, increased medical expenses due to delayed healthcare, and even reduced productivity and educational attainment. Noncitizens and their families may be chilled whether or not they are eligible or seeking to adjust status because the rule is likely to generate confusion and fear of immigration consequences associated with use of any of public benefits, programs or services.

Healthcare Provider Impacts. As legal immigrants and their families forgo healthcare benefits for fear of jeopardizing their immigration status, healthcare providers will see a commensurate increase in uncompensated care. Safety net providers, including hospitals and community health centers, are likely to feel the effects most acutely. Overall, this policy shift could cause costs to rise for providers, particularly in states and communities with high numbers of lawfully present immigrants, as people affected by the change avoid preventive healthcare services or chronic care management. Although Marketplace subsidies are not included in the rule, immigrants could drop Marketplace coverage too as a result of the chilling effect, adding to uncompensated care volumes and potentially impacting the Marketplace risk pool in ways that could drive up costs for other consumers. DHS also points to other potential impacts in its analysis of the rule, including reduced revenues for pharmacies that provide prescriptions to participants in the Medicare Part D LIS program and for companies that manufacture medical supplies or pharmaceuticals.

Healthcare Workforce Implications. As proposed, DHS’s rule would disproportionately affect low-paid workers already in the country or seeking to enter. Nursing home and home health aides, for example, are often paid low wages and have few employer-provided benefits, both of which are factors that could be viewed negatively in a public charge determination. Making it more difficult for workers like these to enter or stay in the country could impact our healthcare system as well.

Potential Impacts on States and Localities. States and localities will bear the costs related to increases in uncompensated care and are also likely to face added costs for social services as some families increasingly depend on emergency food banks, shelters and other safety net resources rather than federally funded public programs. In addition to the loss of state Medicaid revenues, DHS also notes that grocery retailers participating in the Supplemental Nutrition Assistance Program (SNAP) and landlords participating in federally funded housing programs also could experience reduced revenues.

States and localities also could face costs associated with implementing the rules, including costs to notify program applicants about the consequences of using benefits and to update systems to better track benefit use and, potentially, share that information with DHS. State efforts over the past five years to streamline eligibility and enrollment processes for Medicaid and Marketplace tax credits (as required under the Affordable Care Act and implementing regulations) and to coordinate eligibility and enrollment across multiple benefit programs for seamless and continuous access to public benefits could now be problematic for immigrants seeking to minimize use of public benefits if they are enrolled in coverage that could count against them. States may incur costs related to reworking their Medicaid, human services and/or Marketplace IT systems and processes.

These and other issues will be important for DHS to consider as it assesses public comments and seeks to finalize the rule. The DHS proposed rule was published in the Federal Register on October 10; comments on the notice of proposed rulemaking (NPRM) are due no later than December 10.8

1. Immigration and Nationality Act (INA), 8 U.S.C. § 1182.

2. “Field Guidance on Deportability and Inadmissibility on Public Charge Grounds” (Field Guidance), 64 Fed. Reg. 28689 (May 26, 1999).

3. Proposed 8 C.F.R. § 212.21(a).

4. Proposed 8 C.F.R. § 212.21(b).

5. Proposed 8 C.F.R. § 212.21(b)(2)(i).

6. Proposed 8 C.F.R. § 212.21(b)(2)(iii).

7. In addition to the factors, the rule also proposes that public charge analyses should consider the immigration status that the immigrant is seeking and the expected period of admission as it relates to the ability to support him- or herself throughout their stay (e.g., adjustment of status or temporary, nonimmigrant admission), as well as the sufficiency of any required affidavits of support.

8. Department of Homeland Security, “Inadmissibility on Public Charge Grounds,” 83 Fed. Reg. 51114 (October 10, 2018), available at https://www.gpo.gov/fdsys/pkg/FR-2018-10-10/pdf/2018-21106.pdf.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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