*1173 V. The Need for Racial Impact Statements
Policies that disproportionately affect one or more racial groups are not necessarily illegal or even wrong. One would be hard pressed to argue against extending health coverage to severely disabled children, or to children with severe disabilities. But it is naïve to believe that such decisions occur in a vacuum, without any potential impact on other programs, especially those that serve the poorest groups with the highest minority representation. In recent years, Pennsylvania has done a remarkable job of avoiding cuts in eligibility and services or the imposition of burdensome cost-sharing requirements on vulnerable populations during a time of fiscal strain. However, for several years, state officials have distributed a list of cost-containment strategies employed by other states as a regular feature at the monthly meetings of the Pennsylvania Medical Assistance Advisory Committee (“MAAC”). For example, in October 2005, committee members were informed that Missouri was reducing its adult eligibility limits from seventy-five percent of the federal poverty level to twenty-three percent, and eliminating some coverage for 90,000 adults. The state also advised members that Tennessee was cutting eligibility for 323,000 adults. No Medicaid policy discussion occurs without an eye on the budget, and the concern here is that the poorest people, such as adults in Missouri with income less than 75% of the poverty level, provide an easier target for cuts than more affluent (and whiter) groups.
What can be done to focus the attention of policymakers and the public on the potential racial impact of health policy decisions at a point in time when they can be reversed without harming innocent recipients? The courts do not presently offer a viable forum. The Supreme Court long ago held that in the absence of racial motivation, neither the Equal Protection Clause of the Fourteenth Amendment nor Title VI of the Civil Rights Act of 1964 requires states to treat the various categorical grant classes in welfare programs equally. In rejecting the plaintiff's “naked statistical argument” (much like the arguments made here) when they challenged Texas's disparate reduction in benefits to its Aid to Families with Dependent Children program, as compared with its treatment of other programs serving the elderly, blind, and those *1174 with disabilities, Justice Rehnquist noted in his opinion for the majority, “given the heterogeneity of the Nation's population, it would be only an infrequent coincidence that the racial composition of each grant class was identical to that of the others.” Although Medicaid policies have the potential to ignore or even exacerbate racial disparities in health care access and quality, evidence does not suggest that Pennsylvania policymakers are deliberately or even consciously steering scarce health care funds on the basis of race.
The Supreme Court recently dealt racial impact claims a possibly fatal blow when it held that private individuals do not have a right of action to enforce regulations promulgated under Title VI that proscribe activities having a disparate impact on racial groups. Now, when federal health programs are at issue, only the U.S. Department of Health and Human Services' Office for Civil Rights (“OCR”) may raise disparate impact claims in the courts. But the capacity, competence, and authority of OCR to set standards, ferret out violations, and compel reversal of state Medicaid policies that foster health care disparities, with or without litigation, has met scathing criticism. Singled out for special criticism has been the length of time--often three to six years--associated with complaint investigations.
Absent a change in federal law or massive changes at OCR, the legal system does not offer a timely and effective forum for identifying, much less resolving, the disparate racial impact of Medicaid policy decisions. But an issue as important as equal access to health care deserves an effort to at least raise awareness, within the bureaucracy and among the public, of the potential racial impact of proposed policies. I recommend requiring that prior to publication of proposed regulations, the Medicaid agency first assesses the racial impact of its proposed policies and then presents these findings publicly. A necessary second step would be to provide the opportunity for a response from the public to its findings.
Advocates for a fairer criminal justice system have advanced such a process, and both Iowa and Connecticut have enacted legislation requiring racial impact statements to accompany all legislative proposals that could lead to minority disparities in rates of incarceration. Iowa's law requires a minority impact statement to accompany *1175 any legislation related to a public offense, sentencing, or parole and probation procedures. Upon signing the law, the Governor stated,
This means when members of the General Assembly and Executive branch are considering legislation of this nature, we will now be able to do so, with a clearer understanding of its potential effects--positive and negative--on Iowa's minority communities. Just as Fiscal Impact Statements must follow any proposed legislation related to state expenditures, with my signature, Minority Impact Statements will serve as an essential tool for those in government--and the public--as we propose, develop, and debate policies for the future of our state.
Pennsylvania law already requires its administrative departments, including the Department of Public Welfare, to prepare a fiscal note for regulatory actions and administrative procedures. For each initiative, the agency must identify the funding source, the cost for the upcoming fiscal year, the projected cost for each of the five succeeding years, and the fiscal history of the program for which expenditures are being made, among other things. Imposing a like requirement on agencies engaged in making health care expenditures on behalf of the state would force the officials to evaluate the consequences of actions such as the moratorium, and would--as the Governor of Iowa pointed out--empower concerned members of the public to participate in the dialogue around the advisability of, as well as alternatives to, such policy initiatives.
The requirement of a racial impact statement in Pennsylvania would represent a modest expansion of provisions that currently exist in the state's Regulatory Review Act. The Act mandates that at the time it submits a proposed regulation for publication, an agency must submit a regulatory analysis form to the Independent Regulatory Review Commission (“IRRC”) and the standing committees of the Pennsylvania House and Senate with jurisdiction over the agency. The regulatory analysis form must include:
(10) An identification of the financial, economic and social impact of the regulation on individuals, business and labor communities and other public and private organizations and, when practicable, an evaluation of the benefits expected as a result of the regulation.
(11) A description of any special provisions which have been developed to meet the particular needs of affected groups and persons, including minorities, the elderly, small businesses and farmers.
*1176 The Act permits but does not require publication of this information. The Commission uses this information in its determination of whether the proposed regulation is in the public interest, which consideration must include “[t]he protection of the public health, safety and welfare.”
A logical extension of the current scheme would be to require that the submitting agency include a racial impact statement with all initial IRRC filings that propose changes to state-funded health care programs. Borrowing from the current law pertaining to fiscal notes, the racial impact statement could be required to identify the expected impact on minorities in both the near future and five years out. Such a provision would offer protection against policies, such as the moratorium, whose impact evolves over time. And expanding on current requirements that the regulatory analysis form identify the social impact on individuals and describe special provisions developed to meet the needs of minorities, the racial impact statement should identify both the positive and negative impact on the ability of minorities to access quality health care as compared with the impact on non-minority populations. Such changes would force policymakers, and hopefully the public, to consider not only whether a policy will likely help or hurt the minority population, but also how it will help or hurt the minority population as compared to the non-minority population. This would force consideration of not only the overall impact, but also the disparity.
Finally, the new rule should require, rather than permit, the publication of this information. It should reach policy decisions which do not take the form of regulations, but which are instead found, to an increasing degree, in contracts such as those with entities, like managed care plans, which act as surrogates for the state in running the Medicaid program.
