WASHINGTON - Hundreds of millions of dollars set aside by the federal government to help provide health insurance to poor people leaving welfare remains unused because states have not claimed the money, a new accounting by the Department of Health and Human Services shows.
As a result, many people who were pushed off welfare and are eligible for comprehensive health benefits under Medicaid are not getting coverage.
Congress foresaw the problem in 1996, when it rewrote the nation's welfare laws. It set aside $500 million to ensure that children and their parents would not lose Medicaid coverage when they lost cash assistance.
But figures from the Department of Health and Human Services show that more than three-fourths of the money - $383 million - remains unspent.
Melissa T. Skolfield, a spokeswoman for the department, said: "It's free money. We would really like to see states use it."
After repeated requests last week, the Department of Health and Human Services provided a tabulation of state spending through Dec. 31, the latest data available. The figures showed that 21 states had spent less than 10 percent of the money they were allocated to help preserve Medicaid for people leaving welfare.
The department said Georgia, Hawaii, Louisiana, Nebraska, Tennessee and Texas had not spent any of their money. Connecticut spent less than 1 percent of its $5.8 million allocation, and New Jersey spent all of its $11 million allocation.
New York spent 10.6 percent of its money and still had $33 million available, the federal government reported. Robert C. Kenny, a spokesman for the New York Health Department, said the state intended to spend the rest of its money but could not say when.
States can use the money for a wide range of activities: to let people know that health insurance is available through Medicaid; to find those who might be eligible and to help them apply; to print brochures and simplify application forms; to fix computer systems used to evaluate eligibility; to hire or train state and local government employees who work on Medicaid and welfare.
In addition, states can give money to local hospitals, health departments and community groups to find eligible low-income families and to help them enroll.
The money can also be used to hire interpreters or to translate application forms into Spanish and other languages for people who do not read English.
Access to Medicaid is important to people leaving welfare because they often take low-wage jobs with no health benefits. Even if an employer offers health insurance, low-wage workers might be unable to afford the premiums.
Rep. Nancy Johnson, a Connecticut Republican, said she and other lawmakers, especially the late Sen. John H. Chafee, a Republican from Rhode Island, "worked very hard in 1996 to make sure that no child would lose Medicaid coverage as a result of welfare reform."
Accordingly, Johnson said, "the collapse in the provision of Medicaid benefits to eligible children has been a significant disappointment."
Matt D. Salo, a health policy expert at the National Governors'Association, said the federal government had made it difficult for states to spend the $500 million because it initially defined "very narrow acceptable uses" for the money. Salo insisted that states were taking "aggressive actions" to ensure that eligible families receive Medicaid.
Rep. Benjamin L. Cardin, a Maryland Democrat, said some of the decline had occurred because of "benign neglect" by officials in some states.
Laurie Rubiner, a former aide to Chafee who worked on the 1996 law, said, "State officials have their eye on the bottom line. The desire to reduce Medicaid coverage and control costs appears to be a factor contributing to the decline in Medicaid rolls."
Jocelyn Guyer, a health care expert at the Center on Budget and Policy Priorities, a research and advocacy group, said that "in most states, more than half of parents and more than one out of three children in families leaving welfare lose Medicaid," even though virtually all the children and most of the parents remain eligible.