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INDIANAPOLIS – State officials are set to implement a new federal rule July 1 that will severely limit the ability of non-citizens to receive Medicaid services.

The new policy requires applicants for Medicaid to present both proof of citizenship and identification.

Currently, caseworkers ask a client whether the applicant is a citizen but don’t request verification unless the answer is “no” or there is reason to question the truthfulness of the claim.

The change was part of a budget-cutting bill passed by Congress last year and signed by President Bush in February. But state Medicaid officials just learned of the change June 9 when the Centers for Medicare and Medicaid Services, the federal agency that institutes federal Medicaid policy, sent out several memos and letters on the new procedure.

The federal legislation cut programs for the poor, particularly Medicaid, in an attempt to slash the federal budget by nearly $40 billion over five years. But it also contained other provisions, such as the requirement for recipients to prove they are citizens.

Reps. Mark Souder, R-3rd, and Mike Pence, R-6th, voted for the bill, as did Sen. Richard Lugar, R-Ind. Sen. Evan Bayh, D-Ind., voted against it.

The change is meant to ensure that Medicaid recipients are citizens of the United States, as required by federal law. But because there has previously been no verification process, it is possible that law was not always followed in Indiana.

“This is an awkward issue,” said Mitch Roob, secretary of the Indiana Family and Social Services Administration.

He noted the recent national debate over immigration change and conceded that the federal government thinks some non-citizens are slipping through the cracks and receiving taxpayer-paid health care when they are not eligible.

“This is federal law, not our policy change,” Roob said. “If we don’t implement this, we put at risk millions of dollars of federal match money that we get, and we can’t afford to do that.”

Souder said he does receive a lot of complaints from constituents that undocumented immigrants are getting better health care than citizens.

“I support the principle that we ought to provide health care to citizens first,” Souder said. “We need to come up with a process of how we’re going to deal with all these people who are here illegally.”

Roob said the state will try to implement the new rule in a clear fashion and be as cooperative as possible.

He noted that “some people think this is exactly what we ought to be doing, which is making sure American citizens get the health care they need and that those who are not entitled to the benefits don’t,” but others will be upset by the change.

Undocumented immigrants are still eligible for emergency medical services.

According to a prepared statement on the issue, there will be a tiered system of documentation required to receive Medicaid benefits.

A U.S. birth certificate will be acceptable in conjunction with another document proving identity, such as a current state driver’s license or state-issued identification bearing the applicant’s picture.

In the case of a child not yet in school, a birth certificate must be provided and the parent must sign an affidavit vouching for the identity of the child.

Roob said those currently receiving benefits will be asked to provide the proper documentation at their next scheduled review – which occurs every six months to three years depending on the Medicaid service being received.

“As long as we feel you are making good-faith efforts to prove you are an American citizen, we will not remove you from the rolls,” he said.

After citizenship has been proven, it does not have to be established again.