After an all-day public hearing and a closed-door caucus, lawmakers on the Appropriations and Human Services Committees decided they needed more time to make a decision regarding a federal waiver application that would limit eligibility for low-income adults on the state’s Medicaid program.

The budget language adopted by the General Assembly in June assumed the state would save $50 million next year and $100 million by 2014 by imposing a first-of-its-kind $10,000 asset test on childless adults enrolled in the program.

Gov. Dannel P. Malloy’s administration proposed the waiver because it was concerned about skyrocketing enrollment and, more specifically, about the number of college-age children in the program. According to the Department of Social Services, there are 20,354 enrollees under the age of 26 in the program. The new asset test would apply to the families of these children, ages 19 to 26, and it would likely kick many of them off the program.

About 5,089 enrollees under the age of 26 would lose coverage as a result of the proposed changes.

“This reflects the governor’s and my own personal belief that we should be focusing benefits on those who need it the most,” Office of Policy and Management Secretary Ben Barnes told the committees Tuesday.

Attorney Sheldon Toubman testified that the governor has said he’s committed to saving the safety net, but this proposal would cut 15,000 to 20,000 from Medicaid and encourage homelessness among young adults.

“The argument that this is unsustainable is ridiculous,” Toubman said.

Under the federal Affordable Care Act, the state will receive 100 percent reimbursement for the program in 2014.

The administration has maintained that those who can afford to be purchasing their insurance in the private market should be doing so. Barnes said they would even help people find insurance if they want it once they lose coverage because of these changes.

Barnes said there‘s no guarantee that these individuals will opt to purchase their own insurance.

Toubman was furious over a statement by Department of Social Services Commissioner Roderick Bremby in a letter to Rep. Peter Tercyak, in which he essentially admits that DSS has no idea how many of these people have access to private insurance.

Bremby’s letter to Tercyak estimates about 16,585 enrollees would lose coverage as of Oct. 2012, if the $10,000 asset test is applied. One of those would be Thomas Cooper, 21, of Hartford.

Cooper told the committee’s he’s doesn’t have a job, but if his mother’s assets were counted toward his eligibility he would lose access to his medications and wouldn’t be able to get the bariatric surgery he needs. He said his mother would be unable to help him purchase private health insurance.

Toubman explained the $10,000 asset test and said the amount it’s set at isn’t as big of a problem as the inability of DSS to process the re-determinations and applications in a timely manner so that people who qualify don’t accidentally get kicked off their insurance.

About 35 people, clients and advocates, showed up Tuesday to testify about the bureaucratic nightmare they endure in order to continue receiving services.

Click here to read about last week’s rally against DSS.

Toubman said that while they can’t admit it, even the Department of Social Services believes this is a bad idea.

Attached to Toubman’s testimony was a March 29 email from Marc Shok at DSS explaining that “processing tens of thousands of applications in about 60 days with the current staffing” does not strike him as “plausible.”

Shok testified along with Bremby on Tuesday. He told lawmakers they would offer a hardship clause with the application that would allow children ages 19 to 26 to qualify for the low-income adult program if it would force their parents to spend more than 10 percent of their income on private health insurance.

But Toubman said it’s ridiculous to even think anyone in this low-income population has $10,000 in assets, which means it’s unlikely the state would save the money even if the federal waiver was approved.

“They estimate 10.5 percent of the population has assets over $10,000,” Toubman said. “They’re assuming most of the savings are coming from people who are disqualified because of the asset limit. It’s fantasy. It’s not going to happen.”

Lawmakers wrestled with the DSS they knew under Republican governors and the new commissioner appointed by Malloy, a Democrat.

“Commissioner Bremby is like the little kid at the dyke,” Rep. Toni Walker, D-New Haven, who co-chairs the Appropriations Committee, said. “He fixes one thing, then pop there’s another.”

Walker said the committee, which declined to take a vote on the waiver Tuesday, wanted not to believe progress was being made at the agency, but Bremby demonstrated otherwise.

“He’s listening to what our issues are,” Walker said. “I give him credit and we want him to be successful because this is our health care delivery for the poorest people.”

Walker didn’t promise the two committees would come back and vote on the waiver application, but she said the conversation would continue.

It was difficult to get lawmakers to the Capitol for the public hearing Tuesday, but Walker said she would be content as long as members have their questions answered.

If they fail to vote on the application by Aug. 18 it will automatically be submitted to the Centers For Medicare and Medicaid Services.