A new law, effective July 1, requires states to ensure that Medicaid enrollees who claim to be citizens provide documentary proof. The provision, enacted in February as part of the Deficit Reduction Act, is intended to prevent the "theft of Medicaid benefits by illegal aliens," according to Rep. Charlie Norwood (R-GA), one of its lead proponents. Many health care advocates, however, assert that it threatens to delay or deny Medicaid coverage and critical services for millions of low-income American citizens.

After months of speculation and leaks, the Centers for Medicare and Medicaid Services (CMS) waited until June 9—just three weeks before the effective date—to issue a letter of guidance to the states on how to implement the new requirement. The guidelines stipulated a tiered list of documentation that states must request of both new applicants and existing recipients to prove citizenship and identity. Passports top the list, even though many low-income people do not possess one. Presenting a birth certificate, along with a driver's license or similar photo identification, would qualify as second-tier documentation. For cases when those or similar documents are unavailable, the guidance laid out additional possibilities, but labeled them as less reliable and warned states that CMS would audit their use of such options. Under prior law, legal noncitizens had to provide documentation of their status, but most states allowed citizens to attest to their status, without proof but under the penalty of perjury.

A week after the effective date, CMS formalized and in some ways eased these requirements by issuing interim final regulations. Notably, the regulations make clear that states may assist Medicaid applicants and recipients by using data matches with government agencies to document citizenship and identity—for example, checking the computer records of the state's vital statistics agency in lieu of obtaining a birth certificate. In addition, the regulations exempt from the requirement millions of elderly and disabled Americans who have already proven their citizenship before receiving Medicare or Supplemental Security Income.

The delay in issuing any guidance and the Bush administration's unexpectedly strict interpretation of the law left states scrambling to meet the July 1 deadline. Officials in at least two states, California and Ohio, announced that they would delay implementation of the policy, risking the loss of their federal Medicaid funds; New Mexico will put off recertifying eligibility for current Medicaid recipients, limiting the immediate impact of the law to new applicants. In Congress, Sen. Daniel Akaka (D-HI) introduced a bill to push back implementation until next year.

For their part, health care advocates lauded the new options allowed under the formal regulations, but asserted that millions of Americans could still be forced to delay needed care or even lose Medicaid coverage because of time, cost and other barriers to obtaining acceptable documentation. A study by the Center on Budget and Policy Priorities, revised in July in response to the regulations, estimated that between 1.2 million and 2.3 million U.S.-born citizens, mostly children, could experience serious problems. In response to the law, the Sargent Shriver National Center on Poverty Law filed a class-action lawsuit in federal court on June 28, arguing that "American citizens are about to have their health coverage denied for unconstitutional reasons."—Adam Sonfield