Abortion in the U.S.

• Most abortions in the U.S. today are performed surgically, typically using vacuum aspiration (VA).
• 9 in 10 abortions occur within the first 12 weeks of pregnancy.⁵
• Surgical abortions can be performed as early as pregnancy is first detected, using electric VA or manual vacuum aspiration (MVA).²¹
• Medical abortions are procedures using medications to induce abortion, such as mifepristone (also called RU-486) or methotrexate in combination with misoprostol.

Unintended Pregnancy And Surgical Abortion

• Almost half (49%) of the 6.3 million pregnancies each year are unintended; 54% of unintended pregnancies end in abortion.
• In 1994, there were about 1.43 million abortions in the United States; the abortion rate was 24.2 per 1,000 women aged 15-44.10
• The U.S. abortion rate and the percent of pregnancies ending in abortion have declined slightly but steadily since 1980. Since 1990, all measures of abortion, including the annual incidence, have declined.6
• About 15,000 women have abortions each year because they became pregnant after rape or incest.⁶
• 48% of women 15*44 have at least one unplanned pregnancy sometime in their lives; 28% have one or more unplanned births, 30% have one or more abortions and 11% have both.⁹
• An estimated 43% of women will have an abortion by the time they are 45, given current abortion rates.⁹

Who Has Abortions

• 55% of women having abortions are younger than 25; 33% are aged 20-24 and 22% are teenagers.⁸
• Six in 10 abortions occur to white women; however, their abortion rate is below that of minority women. Black women are nearly 3 times as likely as white women to have an abortion and Hispanic women are about twice as likely.⁸
• Two-thirds of all abortions are to never-married women.⁸

Who Provides Surgical Abortions

• 93% of abortions take place in clinics or doctors’ offices.⁶
• The number of known current abortion providers (hospitals, abortion clinics, family planning clinics that offer surgical services, and physicians’ offices) declined by 8% between 1988 and 1992 (from 2,582 to 2,380).⁶
• In 1992, just 12% of all ob/gyn residency programs provided routine first-trimester abortion training; three in 10 programs offered no first-trimester training.¹²
• According to a national survey of ob/gyns in 1997, 36% of ob/gyns say they “ever perform” surgical abortions.¹⁸

Barriers & Access To Surgical Abortion Services

• 84% of all U.S. counties lacked an abortion provider in 1992.6V52% of all abortion facilities provide services only through the 12th week of pregnancy.⁷
• In 1992, 4 in 10 clinics and physicians’ practices would not perform surgical abortions before 6 weeks since the beginning of a woman’s last menstrual period (LMP). Another quarter of facilities do not perform abortions until even later in pregnancy.⁷
• One-quarter of women who have non-hospital abortions travel at least 50 miles from their home to the abortion facility.⁷
• From 1996 to 1997, the number of arsons doubled and bombings tripled against abortion providers.¹³

Very Early Abortion Methods^3,14,21

Medical Abortion

• Among women participating in the U.S. clinical trials who underwent an abortion within 49 days (7 weeks) LMP, the use of mifepristone (with misoprostol) was 92% effective in terminating pregnancy.¹⁶
• Two percent of women who had a mifepristone abortion 49 days LMP in clinical trials required hospitalization, surgical intervention, and/or intravenous-fluid administration.¹⁶
• Several published studies on the use of methotrexate (with misoprostol) for abortion have found the drug to be up to 96% effective in terminating pregnancy within 63 days LMP.^1,2,4
• Of 178 women who underwent pregnancy termination with methotrexate within 63 days LMP in one study, 7 required surgical intervention.¹
• A review of 12 international published studies conducted between 1979 and 1993 of patient attitudes and reactions to early first-trimester medical abortion found that 60-70% of women chose medical abortion when offered a choice between surgical and medical abortion.¹⁹
• Over 2,000 U.S. women, who had a medical abortion with mifepristone and misoprostol during the U.S. clinical trials (1994-1995), found the method highly acceptable: 96% would recommend it to others, 91% would choose it again and 88% found it very or moderately satisfactory.²⁰

Who Pays For Surgical Abortions

• In 1993, the average amount paid for a non-hospital abortion at 10 weeks was $296; however, the cost ranged from $140 to more than $1,700.⁷
• About 13% of all abortions are paid for with public funds, virtually all of which are state funds. Currently, 16 states pay for all or some abortions for poor women.¹⁵
• In the private sector, over two-thirds of typical fee-for-service and managed care plans routinely cover abortions.¹⁷

Provider & Public Opinion On Medical Abortion

• As of 1997, most providers said they were at least somewhat familiar with mifepristone; fewer were familiar with methotrexate.¹⁸
• About half of all ob/gyns (54%) said they would offer mifepristone abortions if approved in the U.S., including 35% of ob/gyns who do not perform surgical abortions.¹⁸
• Among providers familiar with mifepristone, most said they considered it safe (96% of ob/gyns) and effective (94% of ob/gyns).¹⁸
• As of 1997, 43% of women and 51% of men had heard of either mifepristone or methotrexate; among women who had heard of the methods, 72% knew they could be used to end a pregnancy.¹⁸

References

1. Creinin M, Darney P. “Methotrexate and Misoprostol for Early Abortion.” Contraception. 1993; 48:339-348.

2. Creinin M. “Methotrexate for Abortion at 42 Days Gestation.” Contraception. 1993; 48:519-525.

3. Expanding Options For Early Abortions Packet. Overview and Fact Sheets. Reproductive Health Technologies Project, Washington D.C.: 1998.

4. Hausknecht R. “Methotrexate and Misoprostol to Terminate Early Pregnancy.” The New England Journal of Medicine. 1995;333:537-540.

5. Henshaw S. “Abortion Services in the United States, 1995-1996.” Family Planning Perspectives. (Forthcoming, Nov/Dec 1998).

6. Henshaw S, Van Vort J. “Abortion Services in the United States, 1991 and 1992.” Family Planning Perspectives. 1994; 26:100-106, 112.

7. Henshaw S. “Factors Hindering Access to Abortion Services.” Family Planning Perspectives. 1995; 27:54-59, 87.

8. Henshaw S, Kost K. “Abortion Patients in 1994-1995: Characteristics and Contraceptive Use.” Family Planning Perspectives. 1996; 28:140-147, 158.

9. Henshaw S. “Unintended Pregnancy in the United States.” Family Planning Perspectives. 1998; 30:24-29.

10. “Induced Abortion.” Facts in Brief. Jan. 1997, New York, N.Y. The Alan Guttmacher Institute.

11. Forrest JD. “Timing of Reproductive Life Stages.” Family Planning Perspectives. 1993; 82.

12. MacKay H, Trent MacKay A. “Abortion Training in Obstetrics and Gynecology Residency Programs in the United States, 1991-1992.” Family Planning Perspectives. 1995; 27:112-115.

13. National Abortion Federation Website (http://www.prochoice.org)

14. Schaff E, Eisinger S, Franks P, Kim S. “Methotrexate and Misoprostol for Early Abortion.” Fam Med. 1996;28:198-203.

15. Sollom T, Gold R, Saul R. “Public Funding for Contraceptive, Sterilization and Abortion Services, 1994.” Family Planning Perspectives. 1996; 28:166-173.v

16. Spitz I, Benton L, Bardin W, Robbins A. “The Safety and Efficacy of Early Pregnancy Termination with Mifepristone and Misoprostol: Results from the First Multicenter U.S. Trial.” The New England Journal of Medicine. 1998; 338:1241-1247.

17. Uneven & Unequal: Insurance Coverage and Reproductive Health Services. 1994, New York, N.Y. The Alan Guttmacher Institute.

18. Views of Americans and Health Care Providers on Medical Abortion: What They Know, What They Think, and What They Want.. 1998, Menlo Park, CA. Kaiser Family Foundation.

19. Winikoff B. “Acceptability of Medical Abortion in Early Pregnancy.” Family Planning Perspectives. 1995;27:142-148 & 185.

20. Winikoff B, Ellertson C, Elul B, Sivin I. “Acceptability and Feasibility of Early Pregnancy Termination by Mifepristone-Misoprostol.” Archives of Family Medicine. 1998; 7:360-366.

21. Winkler J, Blumenthal P, Greenslade F. “Early Abortion Services: New Choices for Providers and Women.” Advances in Abortion Care. 1996; 5. Carrboro, NC. IPAS.

The survey was designed and analyzed by researchers at the Kaiser Family Foundation and Harvard University; and was conducted by telephone by Princeton Survey Research Associates with 1,200 adults, 18 years or older, nationwide, between August 6 and August 20, 1998.

30. Are you currently involved in a sexual relationship?

Based on those not currently married or living as married; n=479

38 Yes 60 No 2 Don’t know/Refused 100

CURRENT RELATIONSHIP STATUS (Q29, Q30):60 Married/Living as 15 Unmarried and involved 24 Unmarried and not involved 1 Don’t know/Refused 100

31. How long have you (been married /been together with this person)?

Based on those married, living as married, or involved in a sexual relationship; n=916

20 2 years or less 25 3 to 9 years 20 10 to 19 years 35 20 years or more * Don’t know/Refused 100

32. These next few questions are about your sexual health and behavior. Please keep in mind that all of your answers are private. First, have you had sexual intercourse within the last TWELVE months?

75 Yes 25 No 5 Don’t know/Refused 100

33. Have you ever had sexual intercourse?

98 Yes 2 No * Don’t know/Refused 100

34. When you were growing up, did you have sex education courses in school?

Based on those currently or ever married, n=910

66 Yes 30 No 4 Don’t know/Refused 100

35. Since you become sexually active, about how many sexual partners have you had? Would you say more than twenty, eleven to twenty, seven to ten, three to six, two or one?

29 One 11 Two 24 3 to 6 11 7 to 10 10 11 to 20 9 More than 20 6 Don’t know/Refused 100

36. How often (do you and your spouse /do you and your partner/did you and your most recent partner) have sex . . .

9 Everyday or almost everyday 33 Several times a week 28 About once a week 11 About once a month 10 Less often than that 9 Don’t know/Refused 100

37. In general, how do think you compare with most of Americans your AGE…

a. Are you MORE comfortable talking about sexual issues than most Americans your AGE, LESS comfortable, or about as comfortable?

34 More comfortable 10 Less comfortable 51 About as comfortable 5 Don’t know/Refused 100

a. Do you think (you and your spouse have/you and your partner have/you and your most recent partner had) a BETTER sex life than most of Americans your age, NOT as good as sex life, or about the same?

Based on those who have had intercourse (excluding widows and widowers not currently involved in a relationship); n=1109

29 Better 9 Not as good 53 About the same 9 Don’t know/Refused 100

38. How often do you think the average American couple your AGE has sex . . .

7 Everyday or almost everyday 28 Several times a week 36 About once a week 10 About once a month 4 Less often than that 15 Don’t know /Refused 100

39. Thinking about (your SEXUAL relationship with your spouse, how often do you feel that the SEXUAL relationship is/your SEXUAL relationship with your partner, how often do you feel that the SEXUAL relationship your most recent SEXUAL relationship, how often did you feel that the SEXUAL relationship was) (INSERT) always, often, sometimes, or hardly ever?

Based on those who have had intercourse (excluding widows and widowers not currently involved in a relationship); n=1109

Always Often Sometimes Hardly ever Never (VOL.) DK/Ref. a. Loving 62 17 12 4 1 4 =100 b. Passionate 40 26 21 6 1 6 =100 c. Routine 10 13 32 32 6 7 =100 d. Creative 19 22 37 12 2 8 =100

40. How often (do you and your spouse/do you and your partner/did you and your most recent partner) (INSERT) very often, often, sometimes, or hardly ever?

Based on those who have had intercourse (excluding widows and widowers not currently involved in a relationship); n=1109

Always Often Sometimes Hardly ever Never (VOL.) DK/Ref. a. Do romantic things like eat by candlelight 8 18 35 30 6 3 =100 b. Act out your fantasies together 4 10 28 39 12 7 =100 c. Based on women; n=564Wear sexy lingerie 9 10 28 35 12 6 =100 d. Try different sexual positions 11 19 35 23 4 8 =100 e. Read books or watch videos about improving your sex life 2 3 14 52 26 3 =100 f. Go out on special evenings or “dates” or go away for weekends alone 11 22 37 22 5 3 =100

41. Still thinking about (your sexual relationship with your spouse, your sexual relationship with your partner/your most recent sexual relationship) please tell me whether each of the following topics is something you would (like/have liked) to talk about MORE, something you (talk/talked) about enough, or something that you (don”t/didn”t) need to talk about at all?

Based on those who have had intercourse (excluding widows and widowers not currently involved in a relationship); n=1109

More Enough No need to talk about DK/Ref. a. Concerns about AIDS or HIV or othersexually transmitted diseases 12 34 51 3 =100 b. Birth Control 8 27 62 3 =100 c. Your sex life generally 19 44 33 4 =100 d. Your sexual wants and desires 21 45 30 4 =100

READ: Now I have just a few more questions so we can learn more about the people who took part in our survey . . . 42. RECORD RESPONDENT”S GENDER

48 Male 52 Female 100

43. And, what is your age?

23 18-29 21 30-39 19 40-49 14 50-59 22 60 plus 1 Refused 100

44. What is the LAST grade or class you completed in school?

4 None, or grade 1 to 8 13 High school incomplete (Grades 9 – 11) 34 High school graduate (Grade 12), GED 3 Business, technical or vocational school after high school 23 Some college, no four-year degree 14 College graduate, four-year degree 8 Post-graduate or professional schooling, after college 1 Don’t know/Refused 100

45. Are you, yourself, of Hispanic or Latino background, such as Mexican, Puerto Rican, Cuban, or some other Spanish background?

7 Yes 92 No 1 Don’t know/Refused 100

46. What is your race? Are you white, black or African American, Asian or some other race?

84 White 11 Black 1 Asian 3 Other or Mixed race 1 Don’t know/Refused 100

47. Last year, that is in 1997, what was your total family income from all sources, BEFORE taxes? Just stop me when I get to the right category.

6 Less than $10,000 12 $10,000 to under $20,000 18 $20,000 to under $30,000 16 $30,000 to under $40,000 18 $40,000 to under $60,000 13 $60,000 to under $100,000 6 $100,000 or more 11 Don’t know/Refused 100

READ: Thank you very much for taking the time to answer the questions on this survey. We really appreciate it. Have a nice day/evening.

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Sex In The 90s:Kaiser Family Foundation/ABC Television 1998 National Survey of Americanson Sex and Sexual Health:Survey Part One Part Two Part Three ABC Television

This survey takes an in-depth look at Americans’ attitudes about sex and sexual health issues in the 90s, including sex education, sex in the media, sexually transmitted disease and unintended pregnancy, and how we talk (or not) about sexual issues with children and partners.

This report examines the trends in the closure of public hospitals and their conversion to private ownership. It also provides case studies of communities where major privatizations have occurred.

Report (.pdf)

Summary of Findings (.pdf)

Privatization of Public Hospitals

Full Report available in PDF format.Summary available in PDF format.Return to top

Privatization of Public HospitalsReport

Part 2

Even when insurance is offered to low-wage workers, its costs to these workers may be substantial, and, for some, a barrier to coverage. In 1996, workers had to contribute an average of $1,615 per year for family coverage, or about 30% of the total premium.⁵ Thus, a worker who earned $10 an hour in 1996, with annual wages of about $20,000, would have had to spend 8% of earnings to buy family coverage.* A worker who earned just $7 an hour would have had to spend 12% of earnings on health insurance.

* Annual earnings are estimated based on 40 weekly hours worked and 50 weeks of work per year.

Despite substantial costs, the large majority of low-wage workers take up insurance when it is available to them. High-wage workers, though, are more likely than low-wage workers to participate in employer plans. In 1996, 76% of workers who earned less than $7 an hour participated in employer plans to which they had access (either through their own employer or through a family member’s employer), compared to 94% of workers who earned more than $15 per hour [Figure 6].⁶

These data do not provide much support for the view that low-income families lack coverage because they are turning down coverage that is available to them. Although high-wage workers are more likely to take up insurance, the limited impact of participation differences for low-wage workers is apparent in the following example. If low-wage workers increased their participation in any job-based plan offered to them from the current rate, 76 percent, to a rate comparable to that of high-wage workers, 94 percent, their coverage rate would only increase from 42 to 51 percent, still far below the rates found among higher wage workers.* In other words, closing the gap in participation would not close the gap in coverage between high-wage and low-wage workers. The primary reason low-income families lack coverage is not failure to participate, it is because they work for employers who do not offer them health benefits.

The Decline in Employer Coverage

The limits to employer coverage, especially for low-wage workers, are widely recognized. The deterioration of that coverage–again, especially for low-wage workers–is a pattern of even greater concern.

Between 1987 and 1996, the proportion of Americans under age 65 with employer coverage declined from 69.2% to 64%. Although partially offset by an increase in the proportion of the nonelderly population with Medicaid coverage (mostly for children), the proportion of the population without insurance grew from 14.8% in 1987 to 17.7% in 1996 [Figure 7].

* The coverage rate is equal to the participation rate multiplied by the proportion of workers with access to health coverage. Assuming access remains unchanged and 55% of low wage workers have access to employment-related health benefits, the coverage rate would increase from 42% (76% * 55%) to 51% (94% * 55%) if participation rates rose.

These changes in coverage–the drop in employer coverage and the rise in Medicaid– were most pronounced between 1988 and 1993. Since 1993, the deterioration in employer coverage appears to have stabilized, remaining at about 64 percent,⁷ while the Medicaid coverage rate dropped from 12.7% in 1993 to 12.1% in 1996, and the proportion of uninsured Americans under age 65 continued to rise, despite economic growth and relatively low unemployment.

Although the deterioration of employer coverage has affected workers and families across all income levels, the impact has varied with income, with near-poor and modest income families showing the greater losses. From 1988 to 1993, the rate of employer coverage for the near-poor (with incomes between 100-199% of poverty) fell seven percentage points–from 50.9% to 43.9% [Figure 8]. Among individuals in families with incomes between 200 and 399% of poverty, the coverage rate fell from about 77.8 to 72.3 percent, and for those in families with incomes above 400% of poverty, the proportion with employer coverage dropped from 86.0% to 82.4 percent.⁸

Table 1 illustrates the same phenomenon over a longer period of time, focusing on workers differentiated by a variety of characteristics. Looking first at wages, coverage rates declined across all wage levels, but the drop in coverage was concentrated among low-wage workers. Coverage for workers in the bottom fifth of the wage distribution dropped 13 percentage points from 40% in 1979 to 27% in 1993. That drop is much larger than for workers in the top fifth of the wage distribution. The top wage earners were unaffected by the coverage declines in the early 1980s, but saw a small decline (of 3 percentage points) between 1988 and 1993. The fall in coverage by education level follows a similar pattern: large declines among less educated workers, with some decline in coverage in the most educated groups. Coverage rates fell more among men than women, and although employer coverage declined similarly among blacks and whites, Hispanics suffered a much larger drop.

Table 1

Change in Private Sector Employer-Provided Health Insurance Coverage, Wage and Salary Workers, 1979-1993

Health Insurance Coverage Percentage Point Change

Group*

1979

1988

1993

1979-93

All Workers

71%

69%

64%

-7

Wage (by wage fifth)

Lowest

40

32

27

-13

Second

66

62

59

-7

Middle

79

76

71

-8

Fourth

87

83

80

-7

Top

90

90

87

-3

Gender

Men

76

74

68

-8

Women

61

62

58

-3

Race

White

72

71

66

-6

Black

66

64

61

-5

Hispanic

63

56

47

-16

Education

Less Than High School

63

55

45

-18

High School Graduate

70

67

62

-8

Some College

72

68

63

-9

College

81

82

75

-6

More Than College

80

85

79

-1 *Private wage and salary workers ages 18 to 64, with at least 20 weekly hours and 26 weeks of work. Source: Mishel, Bernstein and Schmitt, 1997.

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Policy Brief Part 1 Part 2 Part 3Library Index

This paper describes the nature of employer coverage; its decline, especially among low-wage workers and low-income families; and the factors that are undermining its reach.

• Issue Paper
• Issue Paper

Medicaid Eligibility for Families and Children

September 1998

Measured by enrollment, Medicaid is the largest health insurer in the country. According to the Urban Institute’s estimates, Medicaid covered 41.3 million Americans in 1996; Medicare, in comparison, covered 38 million. Moreover, millions of low-income Americans without private health insurance coverage are eligible for Medicaid but are not enrolled in the program. For example, researchers at the Agency for Health Care Policy Research recently estimated that in 1996 about 4.7 million uninsured children were eligible for Medicaid but not enrolled.¹ If all of these children were enrolled in Medicaid, the number of children without some form of health insurance coverage would drop by 40 percent.

There are numerous reasons why Medicaid does not cover all of the children or adults who qualify. This Issue Paper focuses on one of those reasons: the complexity of Medicaid eligibility policy. This complexity makes the program difficult for low-income Americans to understand and for state Medicaid officials to administer. Yet within this complexity are options that enable states, if they so choose, to use their Medicaid programs as a policy tool to reduce — potentially dramatically — the number of children and adults without basic health care coverage.

This paper begins with an overview of Medicaid eligibility policy. It then turns to two groups of Americans — low-income children and nondisabled adults under 65 — and summarizes the statutory and regulatory “pathways” to Medicaid eligibility available to individuals to them.² The paper concludes with a discussion of policy options available to states under current law for increasing Medicaid eligibility for these two groups. It also reviews the policy options available to the federal government for altering current law to expand Medicaid eligibility.

The complexity of Medicaid eligibility policy is just one reason why Medicaid does not cover all of the children or adults who qualify. Other reasons include burdensome application forms and procedures, lack of outreach efforts, and negative perceptions of Medicaid among low-income families.³ These issues are the subject of other analyses and are being explored in related Kaiser Commission projects.⁴

As CBO has recognized, states have Aa great deal of flexibility in operating the Medicaid program.⁵ For this reason, Medicaid eligibility policy, like Medicaid coverage policy and Medicaid payment policy, varies from state to state. This paper does not attempt to describe Medicaid eligibility policy in each state.⁶ Instead, the focus is on the federal policies that structure the eligibility choices that states make.

I. Overview of Medicaid Eligibility Policy

Medicaid eligibility policy reflects the basic structure of the program. Medicaid is a means-tested, federal-state, individual entitlement program with historical ties to the Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI) cash assistance programs. Medicaid’s policy premise of means-testing explains much about its income and resource rules. Medicaid’s association with AFDC and SSI has guided Medicaid’s historical eligibility categories. Finally, because Medicaid is an individual entitlement, both the states and the federal government have relied on eligibility policy as a tool for limiting their financial exposure for the cost of covered benefits.

Medicaid’s role is to cover basic health and long-term care services for low-income Americans. However, being poor does not assure Medicaid coverage. As shown in Figure 1, Medicaid in 1995 covered only about 55 percent of the nonelderly poor, earning less than $12,590 for a family of three. Medicaid’s reach to individuals with incomes just above the poverty line is even more limited, covering only 17 percent of the near-poor. Despite Medicaid, low-income people are considerably more likely to be uninsured than those with higher incomes. While a portion of the low-income uninsured are eligible for Medicaid but not enrolled, a substantial share are excluded from Medicaid coverage by program eligibility rules that reflect policy choices at both the federal and state level.

At the federal level, eligibility policy choices are reflected in the authorization of federal Medicaid matching funds (on an open-ended basis) for the costs incurred by a state in paying for covered services on behalf of certain low-income individuals. Federal Medicaid matching funds are available to states for the costs of covering some categories of individuals but not others. If federal matching funds are not available for a particular category, it is unlikely that a state will extend Medicaid coverage to those categories of individuals, because the state would then bear the costs of care entirely at its own expense.

At the state level, eligibility policy choices are reflected in state decisions as to which optional eligibility categories and which income and resource criteria to adopt. There are certain eligibility groups — for example, pregnant women with family incomes at or below 133 percent of the federal poverty level ($1,513 per month for a family of three in 1998) — that all states opting to participate in Medicaid must cover. In addition, there are other categories for which states may receive federal matching funds if they choose to extend Medicaid coverage. However, the availability of federal matching funds for a particular category of individuals does not necessarily mean that a state will cover that category, since the state must still contribute its own matching funds toward the costs of coverage.

The terms on which federal Medicaid matching funds are available to states include five broad requirements relating to eligibility: categorical; income; resources; immigration status; and residency. Two of these broad requirements — income and resources — are financial in nature. The other three — categorical, immigration status, and residency — are non-financial. In order to qualify for Medicaid, an individual must meet both its financial and non-financial requirements.

Within each of these five broad requirements are “mandatory” and “optional” elements. It is important to understand the context in which these terms are used. State participation in Medicaid is voluntary, not mandatory. The federal government makes Medicaid matching funds available on an open-ended, entitlement basis to states that elect to participate in the program. In order to participate, states must offer coverage for basic benefits to certain populations — e.g., medically necessary physician and hospital services to certain low-income families and children.

States receive federal Medicaid matching funds for at least 50 percent and as much as 80 percent of the costs of this mandatory coverage, depending on the state. In exchange, states are also able to draw down federal Medicaid matching funds at the same rate for optional populations and services such as the low-income elderly and disabled at risk of nursing home and other expensive long-term care services. Similarly, within each of the five major eligibility requirements there are minimum policies states must follow and there are more expansive policies that states may adopt. According to the Health Care Financing Administration, 55 percent of all Medicaid spending paid for optional populations or optional services.⁷

A child or adult who establishes Medicaid eligibility is not, on the basis of that initial determination, entitled to maintain eligibility indefinitely. Federal Medicaid regulations require that states redetermine eligibility of a Medicaid beneficiary at least once every 12 months. This redetermination, like the original determination, is designed to ensure that a beneficiary continues to meet each of the financial and non-financial requirements for eligibility. Those beneficiaries, who due to a change in income, resources, or family composition no longer meet the eligibility requirements of their state through any pathway, lose their entitlement to Medicaid. There are some limited exceptions for certain categories such as pregnant women, who are entitled to continue Medicaid coverage for 60 days post-partum regardless of any change in financial or non-financial circumstances.

Fluctuations in monthly income are common among low-income families. These changes can lead to the loss of Medicaid coverage by a child or family whose income may spike during one part of the year but spends most of the year earning under the federal poverty level. This occurs commonly in states that use 1-month, 3-month, and 6-month redetermination periods. To address eligibility “churning,” the Balance Budget Act of 1997 gave states the option of extending Medicaid coverage with federal matching funds to children under 19 for a period of up to 12 months after the initial determination of eligibility regardless of any change in financial or non-financial circumstances that would otherwise make them ineligible. This option does not extend to low-income adults with dependent children.

Medicaid does not require that an individual who meets its categorical, income, resource, immigration status, and residency requirements also be uninsured. Medicaid treats insurance coverage as a payment source, not as an eligibility criterion. More specifically, private insurance coverage under Medicaid is a type of “third party liability” that the program uses to reduce its costs of coverage. In most cases, when a Medicaid beneficiary also has private coverage, the private insurer must pay first. Then Medicaid will pay for Medicaid-covered services for which the private insurer is not obligated to pay. This policy stands in sharp contrast to the approach taken under the new Child Health Insurance Program (CHIP), under which states are expressly prohibited from using federal CHIP matching funds to pay for services to children with private health insurance.⁸

Unlike employer-based insurance coverage, Medicaid eligibility is not directly tied to employment for many of the Medicaid coverage categories. For example, a pregnant woman whose income is equal to or less than 133 percent of the federal poverty level is eligible for Medicaid coverage in every state whether or not she worked before or during her pregnancy. On the other hand, as a result of the 1996 welfare law, a state has the option to deny Medicaid eligibility to non-pregnant women with dependent children with respect to whom the state has terminated cash assistance for refusal to work (states are not permitted to terminate Medicaid coverage to children for this reason).

The earnings flowing to an individual or a family from work will affect income eligibility for Medicaid. At income levels near Medicaid eligibility thresholds, a small increase in earnings can result in a loss in Medicaid eligibility even though the increase in earnings may not be sufficient to enable the worker to afford private health insurance coverage. To mitigate this disincentive to work or to increase the hours worked, states are required to extend “transitional” Medicaid coverage for up to one year to women (and their dependent children) who lose cash assistance due to earnings.

Figure 2: Major Medicaid Eligibility Pathways for Selected GroupsMandatory Coverage Optional Coverage Low-income Children Primary Pathways Infants under age 1 with income < 133% FPL Infants under age 1 with income < 185% FPL Children age 1 to 6 with income < 133% FPL Children age 1 to 6 with income < 185% FPL Children age 6 to 15 with income < 100% FPL Children age 6 to 15 with income < 133% or 185% FPL Section 1931 children Targeted low-income children (CHIP children) Children in welfare-to-work families Transitional coverage for children in welfare-to-work families Title IV-E foster care children Non-Title IV-E foster care children Title IV-E adoption assistance children Non-Title IV-E adoption assistance children Other Pathways Medically needy Ribicoff children Children with Disabilities Primary Pathways Supplemental Security Income (SSI) recipients Katie Beckett children Home or community-based waiver children Other Pathways SSI recipients as of 8/22/96 Medically needy Pregnant Women Primary Pathways Pregnant women with income < 133% FPL Pregnant women with income < 185% FPL Other Pathways Medically needy Low-Income Adults Primary Pathways Certain adults in low-income families with children Adults in two-parent households with dependent children Other Pathways Medically needy COBRA continuation beneficiaries Return to top

Medicaid Eligibility for Families and ChildrenPolicy Brief Part 1 Part 2 Part 3 Part 4 Part 5

The Decline In Medicaid Spending Growth In 1996:Why Did It Happen?

September 1998

Medicaid spending grew by only 2.3 percent in 1996, the lowest rate of growth in the history of the program. After a period of explosive growth between 1988 and 1992, averaging over 20 percent per year, Medicaid spending slowed to 9-10 percent per year between 1992 and 1995.¹ In 1996, Medicaid financed acute and long-term care services for 41.3 million people at a cost of $155.4 billion. Spending growth in 1996 was extremely low, and slow growth seems to have continued in 1997. The primary reason for the low rate of growth in 1996 was a nearly 20 percent drop in disproportionate share hospital (DSH) payments. A reduction in adult and children enrolled through cash assistance in response to state welfare reforms and an improving economy as well as moderation in enrollment growth of elderly and disabled beneficiaries also contributed to the slowdown.

Medicaid spending growth has slowed to unprecedented levels and, for the first time in the program’s history, enrollment has fallen. This policy brief updates earlier analyses conducted for the Kaiser Commission on Medicaid and the Uninsured by researchers at the Urban Institute. It critically examines Medicaid enrollment and spending trends from 1990 to 1996, highlighting periods of extensive growth between 1990 and 1992, moderate growth between 1992 and 1995, and limited growth between 1995 and 1996. It then reviews the primary factors contributing to the dramatic slowdown in both spending and enrollment growth between 1995 and 1996. The final section presents preliminary estimates of spending for 1997 and projects Medicaid spending growth over the next five years.

Medicaid Spending: 1990 to 1992

Between 1990 and 1992, Medicaid grew at an extraordinary 27.1 percent annual growth rate, with expenditures increasing from $73.7 billion to $119.9 billion in just two years. During the same period, Medicaid spending on the elderly and disabled increased by 16.7 and 17.6 percent per year, respectively, while expenditures on adults and children increased by 21.4 and 23.8 percent per year, respectively (Table 1). Disproportionate share payments increased by over 250 percent per year. There were several reasons for these high growth rates.

Table 1 Medicaid Expenditures by Group and Type of Service, 1990-1996 Year Average Annual Growth 1990 1992 1995 1996 1990-96 1990-92 1992-95 1995-96 Total Expenditures (billions) $73.7 $119.2 $157.4 $161.0 13.9% 27.1% 9.7% 2.3% Benefits Only By Service $69.2 $97.7 $133.1 $140.3 12.5% 18.8% 10.9% 5.4% Acute Care 37.0 55.3 79.4 84.7 14.8 22.3 12.8 6.6 Long-Term Care 32.3 42.4 53.7 55.6 9.5 14.6 8.2 3.5 By Group $69.2 $97.7 $133.1 $140.3 12.5% 18.8% 10.9% 5.4% Elderly 23.6 32.1 40.9 42.4 10.3 16.7 8.4 3.7 Blind and Disabled 25.9 35.8 52.1 56.6 13.9 17.6 13.3 8.6 Adults 8.8 13.0 16.8 16.9 11.5 21.4 9.1 0.6 Children 11.0 16.8 21.4 23.3 14.2 23.8 11.4 4.5 DSH $1.3 $17.7 $18.8 $15.1 49.7% 263.4% 2.0% -19.6% Administration $3.2 $3.8 $5.4 $5.6 10.0% 9.8% 12.8% 2.3% Source: Urban Institute estimates based on data from HCFA-2082 and HCFA-64 reports.Note: Does not include the U.S. Territories or accounting adjustments. Acute care services include inpatient, physician, lab and x-ray, outpatient, clinic, EPSDT, dental, vision, other practicioners, payments to managed care organizations, payments to Medicare, and all other unspecified care services. Long-term care includes nursing facilities, intermediate care facilities for the mentally retarded, mental health services, and home health services. DSH refers to disproportionate share hospital payments. Payments to Medicare are distributed among aged, blind, and disabled enrollees. Payments to managed care are primarily distributed.

The major reason is the aggressive use of DSH payments often financed by provider taxes and donations. The DSH payments grew at an average annual rate of 263 percent, accounting for about $1.3 billion in 1988 and growing to more than $17 billion by 1992. A second reason was the high rate of inflation in health care prices (8.3 percent per year between 1990 and 1992), which affects Medicaid provider payment rates. States became increasingly adept at shifting services previously financed by other programs into Medicaid. This allowed states to use federal matching funds to replace programs previously funded entirely by the state.

Expenditures also seem to have grown during this period because of significant increases in health care utilization. Medicaid began covering a population with greater needs, including pregnant women, AIDS patients, and people with problems with drugs and alcohol. In addition, states increased the provision of Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) services to children.The final reason is a large increase in the number of beneficiaries. In the late 1980s, Congress enacted a series of expansions of coverage for pregnant women, infants and children. By 1990, Medicaid programs were required to cover all pregnant women, infants, and children under age 6 with family incomes up to 133 percent of the Federal Poverty Level (FPL), and they were given the option to expand coverage to pregnant women and infants up to 185 percent of the FPL. States were also required to cover children below the FPL born after September 30, 1983; in effect, older children were scheduled to be phased in one year at a time until all children through age 18 are covered by the year 2002.² In addition, states were required to cover Medicare premiums and cost sharing for all Medicare-eligible persons with incomes below the FPL and to cover premiums for Medicare-eligibles with incomes between 100 and 120 percent of poverty. Finally, the SSI program grew for a number of reasons, particularly as a result of court decisions and Congressional mandates that extended coverage to learning-disabled children.Medicaid Spending: 1992 to 1995

Medicaid spending growth fell after 1992, increasing by only 9.7 percent per year on average between 1992 and 1995 (Table 1). There were three principal reasons for the reduction in the rate of growth: slower enrollment growth, slower growth of spending per enrollee, and a leveling off of DSH payments. First, enrollment growth among adults and children declined because of improving state economies and tougher AFDC work requirements imposed by states. In addition, the Medicaid expansions to pregnant women and children were more fully phased in and began to experience lower rates of growth. Growth rates among the blind and disabled also declined, because the court decisions and coverage changes responsible for the increases in enrollment of disabled children in the 1988 to 1992 period were fully phased in. Finally, enrollment growth among the elderly also declined because of a slowdown in enrollment of Qualified Medicare Beneficiaries (QMBs) as well as a decline in the number of elderly receiving cash assistance through SSI.

Table 2 Medicaid Expenditures, Enrollment, and Expenditures per Enrollee, 1990-1996 Year Average Annual Growth 1990 1992 1995 1996 1990-96 1990-92 1992-95 1995-96 Total Expenditures Benefits Only (billions) $69.2 $97.7 $133.1 $140.3 12.5% 18.8% 10.9% 5.4% Total Enrollment (millions) 28.9 35.8 41.7 41.3 6.2% 11.3% 5.3% -1.0% Elderly 3.4 3.8 4.1 4.1 3.1 5.1 2.9 0.0 Blind and Disabled 4.0 4.9 6.4 6.7 8.8 9.8 9.3 5.2 Adults 6.7 8.3 9.6 9.2 5.5 11.4 5.0 -4.1 Children 14.7 18.8 21.6 21.3 6.4 13.1 4.8 -1.6 Expenditures per Enrollee $2,400 $2,732 $3,192 $3,397 6.0% 6.7% 5.3% 6.4% Elderly 6,906 8,504 9,965 10,336 7.0 11.0 5.4 3.7 Blind and Disabled 6,410 7,348 8,182 8,447 4.7 7.1 3.6 3.2 Adults 1,312 1,557 1,750 1,837 5.8 8.9 4.0 5.0 Children 747 897 1,078 1,145 7.4 9.5 6.3 6.2 Source: Urban Institute estimates based on data from HCFA-2082 and HCFA-64 reports.Note: Does not include the U.S. Territories. Expenditures shown do not include disproportionate share hospital payments, administrative costs, or accounting adjustments. States are not consistent in the way they report payments to Medicare or to managed care organizations (MCOs). For states where reported data are either missing or appear unreliable, formulas were used to distribute these payments to appropriate enrollee groups. Payments to Medicare are distributed among aged, blind, and disabled enrollees. Payments to MCOs are primarily distributed to adults and children. Enrollees are people who sign up for the Medicaid program for any length of time in a given fiscal year.

Second, spending per enrollee also declined from 6.7 percent to 5.3 percent per year (Table 2). There are a number of possible explanations, including the reduction in health care inflation (5.1 percent between 1992 and 1995). Another factor explaining the lower growth in spending per enrollee could be rapid growth in Medicaid managed care which may have achieved at least short-term savings in several states in these years. Finally, DSH payments began to level off due to 1991 and 1993 legislation restricting the use of these payments. The 1991 legislation banned the use of private donations, and severely restricted the kind of provider taxes the state could employ. The 1991 legislation also limited the growth of DSH payments to that of overall program expenditures and also capped DSH payments at 12 percent of program expenditures. The 1993 legislation made it illegal for states to pay a hospital more than what the hospital was losing through uncompensated care or through low Medicaid reimbursement rates. This severely restricted states’ ability to pay large amounts of money to specific hospitals, which in turn reduced Medicaid expenditures in some states.

The Projected Slowdown

In 1997, both the Urban Institute (UI) and the Congressional Budget Office (CBO) projected that Medicaid spending growth would continue to slow down. They projected that Medicaid spending would increase by 7.5 percent (UI) and 7.7 percent (CBO), through the year 2002. However, the most recent experience for 1993 was 2.3 percent and recent evidence suggests that future spending will continue to slow. There were three principal reasons for these lower projected rates of expenditure growth. First, enrollment growth was likely to slow down for a number of reasons. One is that the majority of mandated expansions of coverage for pregnant women and children had already been implemented and had achieved relatively high participation. In addition, cash assistance AFDC rolls were expected to decline due to the rapidly growing economy, state efforts to reduce welfare program participation, and the recent enactment of the Temporary Assistance to Needy Families (TANF) program, which promised to cut welfare enrollment even further. Finally, the number of disabled beneficiaries was expected to grow, but at a slower rate, reflecting the lower rate of increase in SSI enrollment. Since the disabled are a high-cost population, slower growth in enrollment could have a significant effect on expenditures.

Second, spending per enrollee was expected to moderate due to the increased use of managed care and low health care inflation. Long-term care spending was likely to remain low because of limits on the rate of growth in nursing home beds and the use of community-based alternatives to nursing home care, particularly for the disabled. Third, the 1991 and 1993 DSH legislation seemed to have successfully restricted states’ ability to expand DSH payments. For these reasons, both the Urban Institute and the CBO projected Medicaid spending to grow by about 7.5 percent through 2002.Return to top

The Decline In Medicaid Spending Growth In 1996:Why Did It Happen?Policy Brief Part 1 Part 2 Part 3