Forty-two boxes of returned mail lined a wall of the El Paso County Department of Human Services office on a recent fall morning. There used to be three times as many.

Every week, the U.S. Postal Service brings anywhere from four to 15 trays to that office in Colorado Springs. Each contains more than 250 letters that it could not deliver to county residents enrolled in Medicaid or other public assistance programs.

This plays out the same way in counties across Colorado. The state estimates that about 15% of the 12 million letters from public assistance programs to 1.3 million members statewide are returned — some 1.8 million pieces of undelivered mail each year.

It falls on each county’s staff, in between fielding calls, to contact the individuals to confirm their correct address and their eligibility for Medicaid, the federal-state health insurance program for people with low incomes.

But last year, state officials decided that if caseworkers can’t reach recipients, they can close those cases and cut off health benefits after a single piece of returned mail.

Medicaid, food stamps and other public benefit programs have avoided the march toward digital communication and continue to operate largely in a paper-based world. That essentially ties lifesaving benefits for some of the most vulnerable populations to the vagaries of the Postal Service.

As returned mail piles up, Colorado and other states take increasingly drastic measures to work through the cumbersome backlog, lowering the bar for canceling benefits on the basis of returned mail alone.

Missouri, Oklahoma and Maryland are among states that have struggled with the volume. And when Arkansas implemented Medicaid work requirements, nearly half the people who lost benefits had failed to respond to mailings or couldn’t be contacted.

At best, tightening returned-mail policies could save states some money, and people cut off from the benefits yet still eligible for them would experience only a temporary gap in their care. But even short delays can exacerbate some patients’ chronic health conditions or lead to expensive visits to the hospital.

But at worst, the returned mail may be contributing to a major drop in Medicaid enrollment and increased numbers of uninsured. Patients dropped from the rolls rarely realize it until they seek care.

“There’s a lot of concern on this issue,” says Ian Hill, a health policy analyst at the Urban Institute, a think tank based in Washington, D.C. “Are they getting purged from the records unfairly and too quickly?”

Taking action

States have been walking a tightrope. While trying to aid their poorest residents, they also are grappling with budget-busting Medicaid costs and pressure from the Trump administration to ensure everyone on public assistance programs qualifies for the benefits.

Some states have sought “procedural denials because it kept their costs down,” says Cindy Mann, who ran the Medicaid program under the Obama administration.

“But we certainly don’t want to cut somebody off while they’re still eligible,” says Mann, who is now a partner with the law firm Manatt, Phelps & Phillips. “It’s penny-wise and pound-foolish.”

Low-income families who depend on public benefits tend to move often, leading to frequent errors in the addresses on file. But if a person moves out of state, the state-administered Medicaid benefit cannot move with them.

“States have always struggled with how to handle returned mail,” says Jennifer Wagner, a senior policy analyst with the Center on Budget and Policy Priorities, a left-leaning think tank in Washington, D.C. “But we have more recently heard of states pushing a policy to be very aggressive about canceling clients when the state receives returned mail, and that has led to significant disenrollment.”

In April 2018, Colorado lowered its recommended threshold for acting on returned mail from three pieces of undeliverable mail to just one. From May 2017 to May 2019, enrollment in Medicaid and the Children’s Health Insurance Program dropped 8.5% in the state — more than three times the national decline of 2.5%, according to the Medicaid and CHIP Payment and Access Commission, a congressional advisory panel.

It’s unclear how much of the drop was because of returned mail. The enrollment declines could also reflect some combination of a proposed federal rule to deny green cards to immigrants who use public benefits, or cuts in federal funding for outreach to sign people up for health coverage or an improved economy.

Colorado has not set up a way of tracking how many people are losing benefits because of returned mail or what happens to those who do.

“We don’t have one data point that we can track,” says Marivel Klueckman, who oversees Medicaid eligibility functions for Colorado. “That is something we’re building into the future.”

Of the more than 131,000 Colorado households that have public benefit mail returned each year, the state estimates about 1 in 4 cannot be reached, resulting in the possible closure of nearly 33,000 cases.

People cut off from Medicaid benefits may never learn why and may not seek to restore their benefits, which concerns Bethany Pray, health care program director at the Colorado Center on Law and Policy, a Denver-based legal aid group.

“You’re going to lose people who are truly eligible and should never have been taken off and who face barriers to reenrollment,” Pray says.

Mailing woes

The lack of dependability of the Postal Service, particularly in rural areas of the state, adds to the concerns about relying on snail mail for important government correspondence.

Officials from the ski resort town of Snowmass Village, for example, complained last spring that they didn’t have any mail delivered for an entire week.

“We have received over 6 feet of snow in the last two weeks and we still get more complaints about postal delivery than snow removal,” town officials wrote in a March survey conducted by the Colorado Association of Ski Towns. “People aren’t getting bills, jury summons, medications, certified mail.”

In June, three members of Colorado’s congressional delegation sent a letter to the postmaster general, pressing her to address a range of postal issues, including lost or returned mail.

There’s no question that cutting off people after one piece of returned paper mail saves the state money in sending letters and in processing undeliverable mail — though other costs may add up later. Colorado public assistance programs mail more than a million letters each month, at a cost of nearly $6 million annually. That is just a small share of what is spent on the actual assistance, given that Colorado’s Medicaid program alone costs $9 billion a year.

Cutting off assistance after one piece of returned mail also helps the state avoid making monthly payments to regional health organizations for case management and dental services for those who no longer qualify for benefits.

However, Colorado Medicaid’s Klueckman says the state is primarily concerned with making sure eligible residents get their notifications and remain enrolled. The state moved eligibility determinations and renewals online and now offers a mobile app so residents can also receive notifications electronically.

Local discretion

Colorado plans to open a consolidated returned-mail center for the state as soon as July 2020. That could provide some economies of scale and consistency, but it has the potential of increasing the number of people dropped, as local knowledge is replaced by automation.

Counties currently receive guidance from the state on how to process returned mail, but they have leeway to set their own procedures. El Paso County, for example, rarely closes cases based on a single piece of returned mail and opts not to act on addresses that are often used by those who are homeless, such as a shelter or post office.

“They’re the least likely for us to be able to have a phone number to call them,” says Karen Logan, economic and administrative services director for the county.

The county, Colorado’s second largest, used grant money this year to pay staff overtime to whittle down its backlog of returned mail. That has helped the county process more than 48,000 pieces of returned mail in the past year, with more than a third prompting database changes. But officials could not say how many of those resulted in people losing benefits.

“We have some other things that are a little bit higher on the priority scale, so we don’t close as many cases as we probably could,” Logan says. “But I can tell you this: Closing a case and having a person have to reapply two months later takes significantly more work.”

Kaiser Health News is a nonprofit, editorially independent program of the Kaiser Family Foundation. KHN is not affiliated with Kaiser Permanente.

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Arline Feilen lost her husband to suicide in 2013. Three years later, she lost her dad to cancer. And this February, she lost her 89-year-old mom to a cascade of health problems.

“We were like glue, and that first Mother’s Day without her was killer. It just dragged me down,” said Feilen, who is 56 and lives in suburban Chicago. “It was just loss after loss after loss, and I just crumbled.”

A few days after that painful holiday, she drank eight or nine light beers in several hours, trying to drown her pain. She sent alarming texts to her sister and friends, raising concern she might harm herself. One friend called 911, summoning an ambulance that took her to Northwestern Medicine Central DuPage Hospital.

Feilen arrived in the emergency room on a mid-May night and was moved to a shared room in the inpatient psychiatric unit the next day. In total, she spent five nights in the hospital.

Feilen underwent a battery of tests: bloodwork, an abdominal ultrasound and an electrocardiogram. She got group counseling, which her sister, Kathy McCoy, said really helped. She also started taking an antidepressant, Remeron.

When she got home, she stopped drinking beer. She kept taking the medication and continued counseling. She came to view her mental health crisis as “another mountain I’ve climbed” — and reminded herself of her accomplishment by keeping her hospital bracelet in her bedroom near a candle. Her grief began to recede.

Then the bill came.

Patient: Arline Feilen, the widow of a veteran, is a part-time, self-employed medical transcriptionist who lives in Carol Stream, Ill. She purchased individual insurance on the open market, not through the Affordable Care Act exchange.

Total Bill: $29,894.50, including $16,480 for room and board in a semiprivate psychiatric room and $3,999 for the ER. After the hospital reduced the bill because her insurance didn’t cover mental health, she owes $21,634.55.

Service Provider: Northwestern Medicine Central DuPage Hospital, a large, acute care hospital in the Chicago suburbs. It’s part of the nonprofit academic health system Northwestern Medicine.

Medical Service: Feilen received inpatient care for a depressive episode, including blood draws, an ultrasound, an electrocardiogram and behavioral health treatment.

What Gives: Feilen has an “association health plan” purchased through Affiliated Workers Association. It’s called SelectCare 1, costs her $210 a month and doesn’t cover mental health care.

This is one type of plan that the Obama administration curtailed. But some like Feilen’s are permitted again since the Trump administration gave the go-ahead for sales of plans previously considered to offer inadequate coverage.

Like other association plans, hers doesn’t have to include the 10 “essential health benefits” required under the federal Affordable Care Act, such as mental health and substance use disorder treatment. In plans that comply with the ACA, those benefits must be treated the same way as physical needs.

Jennifer Snow, acting national director for advocacy and public policy for the National Alliance on Mental Illness, said the type of plan Feilen has is “allowed to undermine the ACA.”

The Trump administration last year issued rules making it easier for small employers to band together to offer insurance through these plans. In March, a U.S. District Court judge sided with 11 states and the District of Columbia challenging the law, invalidating a large chunk of those rules. But association plans are still out there, and some states support broader access to them.

Sheri Boehle, an insurance agent who handles Affiliated Workers Association, said many people buy this type of insurance for a short time period. For the right people, she said, it’s a great option that can protect them from the costs of catastrophic physical health problems.

Boehle said she always gives customers a brochure explaining exactly what’s covered and what’s not, and Feilen said she got one saying treatment for mental health care wouldn’t be covered. Feilen said that was all right with her when she bought the policy years ago because she didn’t expect to need that service.

To keep costs down while hospitalized, Feilen said, she tried to refuse treatments like the ultrasound but was told she needed it. She got no answers when she inquired how much she might pay.

“I’m asking a simple question, and there should be a simple, finite answer,“ she said.

Hospitals generally charge uninsured people much more than they charge people who have insurance. A 2017 report from the Health Care Cost Institute showed that the average negotiated price of an acute mental health admission was $9,293 for a commercially insured patient who stayed, on average, for a week. That’s less than half of Feilen’s bill.

Getting answers about the cost of care can be extremely difficult for patients, even those footing the bills without the help of insurance.

“Hospital pricing is obviously opaque,” said Ezra Golberstein, an associate professor at the University of Minnesota’s School of Public Health. “The easiest prices to get are how much to pay for parking and how much things cost at the snack bar.”

The biggest chunk of Feilen’s bill was $16,480 for four nights in a psychiatric unit room shared with another patient. Adding the night in the ER brings it up to $20,479 — the majority of the entire bill.

McCoy joked that it would have been a lot cheaper for her sister to stay at a Ritz hotel.

That’s true. According to its website, five nights in the fanciest suite at the Ritz-Carlton in downtown Chicago costs $12,895.

Resolution: Without prompting, the hospital reduced Feilen’s bill by $8,968.35 because she lacked mental health coverage.This amount was already taken off the bill when she got it.

Hospital officials provided a statement saying Northwestern Medicine offers a variety of financial assistance programs for uninsured, underinsured and insured patients. Often, they said, a social worker or community partner helps the patient navigate the process, which includes filling out an application and providing supporting information and documents.

“In this case, we have tried numerous times to connect with this patient to provide guidance and assistance,” the statement said.

Feilen said she talked to a social worker at the hospital about costs and began filling out a form for financial help, but stopped when she got to a part that asked about stocks and bonds. Although her annual income is below the poverty level ? and she likely qualifies for Medicaid ? she received a modest inheritance from her parents that she has put into a retirement plan, she said, and thought that meant she wouldn’t qualify.

When she was buying insurance years ago, Feilen said, she started to look into plans on healthcare.gov that offer subsidies to many people with low or middle-class incomes. But she said she found them confusing and gave up.

NAMI’s Snow said it’s sometimes tough for consumers to know whether a plan complies with the health care law. Plans sold outside of healthcare.gov may be labeled “Obamacare” but not have the health law’s guaranteed benefits.

“You have to be really careful you don’t accidentally buy one. They’re always cheaper,” she said. “But if it seems too good to be true, it probably is.”

To find ACA-compliant plans, which must cover mental health, Snow suggested going to HealthCare.gov, the federal marketplace that covers most states. (It will direct you if your state set up its own ACA marketplace.)

The Takeaway: If you’re uninsured, you’ll generally face bigger bills than patients with health insurance because you lack the power of the insurance company to negotiate prices with the hospital. Ask whether you qualify for Medicaid or charity care. If you don’t, negotiate with the hospital anyway to try to lower your bill. Arm yourself with information about the going rate insurers pay for the care you received by consulting websites like Healthcare Bluebook or Fair Health.

When buying insurance, make sure you know what’s covered and what’s not, which can be tricky to determine for plans — many of which can be found on the Internet — that don’t have to follow all the rules of the federal health law.

“On the individual market, it’s very much ‘buyer beware’ for plans that are not ACA-compliant,” Golberstein said. “With short-term or association health plans, really read the fine print.”

If Feilen could go back in time, she said she would have surely bought insurance that covered mental illness, which affects 1in 5 U.S. adults each year.

“I would definitely recommend it. You don’t know what life is gonna bring you,” she said. “I never imagined in a million years that I’d need mental health care.”

NPR produced and edited the interview with Kaiser Health News’ Elisabeth Rosenthal for broadcast. Christine Herman of Illinois Public Media and Side Effects Public Media provided audio reporting.

Bill of the Month is a crowdsourced investigation by Kaiser Health News and NPR that dissects and explains medical bills. Do you have an interesting medical bill you want to share with us? Tell us about it here.

Kaiser Health News is a nonprofit news service covering health issues. It is an editorially independent program of the Kaiser Family Foundation that is not affiliated with Kaiser Permanente.

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