Unqualified people get health aid, audit finds

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Many of the slots in a state-subsidized health plan are filled by people who may not qualify, according to a new state audit. Meanwhile, 11,000 people who do qualify are cooling their heels on a waiting list, state officials said.

State Auditor Brian Sonntag conducted the audit of the state's Health Care Authority, overseer of the Basic Health Plan for low-income residents.

The Legislature created the subsidized health-insurance plan in 1987. During the audit period, June 2000 to July 2001, the program had an average of 130,978 subscribers receiving benefits at a cost to the state of $208 million.

One problem, Sonntag said, is the authority does not verify income for eligibility when enrolling a new subscriber.

A check by the auditor's office showed that for 7,000 accounts, subscribers reported less income to the authority than what independent sources were reporting. Some clearly did not qualify for the program, Sonntag said.

Nor does the authority effectively monitor those in the program, according to the report issued last week. Some people should be paying higher premiums because their incomes have risen, Sonntag said.

And 37,000 people who enrolled did not provide enough information to allow the authority to check their income, Sonntag added.

"The authority does not have adequate policies and procedures to ensure that all those who are receiving health insurance subsidies are eligible to do so," his report noted.

"This is a serious condition," Sonntag said. "There are a lot of folks not eligible for the benefit who are receiving it, which means there are likely a whole lot of folks eligible for these benefits out there who are not able to get them. We want to make sure we're helping the folks with the greatest need."

Dave Wasser, spokesman for the authority, said the agency has pledged to develop and change policies and procedures and check the incomes of everyone on the program by the end of the year.

It also will assign more employees to recertification and verification efforts, he said.

"We take this very seriously," Wasser said.

Lynn Harsh, executive director of the Evergreen Freedom Foundation, a conservative think tank, said her organization has for years called for more extensive audits of state spending — in particular, health-care expenditures.

"This wasn't a surprise to us," she said. "The surprise has been that legislators have been blind — willingly blind — to this issue for years. It seems they just can't wrap their hands around numbers in the billions, and nobody has been willing to take the time to understand it."

With no clear policies at the authority, she said, "This was an accident waiting to happen."

Sonntag said he was pleased by the authority's response. "It doesn't negate that there was a problem," he said. "But now, you need to go to the next page: How are you going to fix it?"

The audit of the Health Care Authority was part of Sonntag's State of Washington Accountability Report for fiscal year 2001. Other problems cited included:

• Inadequate controls on drugs at Western State Hospital.

• Inadequate monitoring of fees collected from ferry passengers.

• Failure of the state Horse Racing Commission to collect $1 million in satellite-wagering-site fees.

Carol M. Ostrom can be reached at 206-464-2249 or costrom@seattletimes.com.