Presumptive eligibility = liar loans

In my last blog post, I mentioned an organization named Enroll America, which is supporting the Obamacare enrollment push. I happened to visit their website and found there a "best practices" document encouraging the use of "presumptive eligibility" for Medicaid. The document describes presumptive eligibility as follows:

With presumptive eligibility, an individual or family can be temporarily enrolled in Medicaid (or CHIP, if applicable) immediately if it appears they are eligible. They simply need to provide a few pieces of information—name, household size, and estimated monthly income—and a presumptive eligibility determination can be made. ... [Presumptive eligibility] can be used even when IT systems are down, or when an individual can’t get a real-time determination using the new single, streamlined application for coverage.

I like that part about "even when IT systems are down." Obviously, presumptive eligibility was designed with healthcare.gov in mind.

The document has a handy FAQ section:

Do individuals need to verify their income for presumptive eligibility?
No. The determination is made based on the individual’s attestation of their family circumstances.

How do providers get paid for services delivered during the temporary eligibility period?
Providers get paid the regular Medicaid rates for any services provided during the temporary eligibility period, even if the person is eventually found ineligible for Medicaid.

Who can determine someone presumptively eligible?
States that use presumptive eligibility get to choose which entities are allowed to make presumptive eligibility determinations.

So, I can walk into a hospital, fill out a form on which I "attest" to my monthly income, some "entity" can approve it, and I can get Medicaid coverage? And if turns out that I lied and am not eligible, the government will still pay?

Isn't the practice of accepting an attestation of income on an application -- in their case, a loan application -- precisely what banks are being fined billions of dollars for by various government agencies? And yet, here we have a group encouraging the acceptance of unverified information on Medicaid applications as a "best practice."

The big banks are now often condemned for allegedly entrapping unknowing victims into entering unverified, false information on their loan applications. But, just as now advocacy groups encourage the entry of unverified information on Medicaid applications so that poor and minority communities can receive medical benefits, so in the years before 2008 enormous pressure was applied by various advocacy groups like ACORN on banks to accept unverified information on so-called "liar's loan" applications so that those same poor and minority communities could receive bank financing.

For example, Wikipedia describes the Community Reinvestment Act (CRA) as follows:

The Community Reinvestment Act ... is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods. Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.

As Edward Pinto reports in the WSJ:

[The housing] bubble was the result of government policies that lowered mortgage-lending standards to increase home ownership. One of the key players was the controversial liberal advocacy group, Acorn (Association of Community Organizations for Reform Now). The watershed moment was the 1992 Federal Housing Enterprises Financial Safety and Soundness Act, also known as the GSE Act. To comply with that law's "affordable housing" requirements, Fannie Mae and Freddie Mac would acquire more than $6 trillion of single-family loans over the next 16 years. Congress's goal was to force these two government-sponsored enterprises (GSEs) to purchase loans that had been originated by banks—loans that were made under the pressure of another federal law, the 1977 Community Reinvestment Act (CRA), to increase lending in low- and moderate-income communities. ... Acorn and the other advocacy groups succeeded at getting Congress to mandate "innovative and flexible" lending practices such as higher debt ratios and creative definitions of income. [emphasis added]

In sum, we have exactly the same pattern repeating itself: a liberal community organizing group leverages the provisions of liberal legislation to encourage various entities to accept unverified income information on applications that will result in the granting of benefits (Medicaid coverage or bank financing). And, this practice is made risk-free for the entities themselves by the guarantee that if it turns out that the information provided is false, the government will make good any losses suffered (by making the Medicaid payments on the one hand or by making good on loan guarantees provided through Fannie Mae and Freddie Mac on the other).

And now we are witnessing the ultimate hypocrisy: after having incentivized the banks for years to engage in this destructive behavior of accepting unverified information, then, when the banks actually behaved that way, the government now drags them into court for having done so. We can be sure that hospitals and other medical providers, after being incentivized to implement presumptive eligibility, will be vilified and accused of fraud in the future for having done so. And groups like Enroll America and ACORN will move on unpunished to the next liberal scam.