Part 5

Appendix Table 1: Medicaid Eligibility Levels for Pregnant Women and Children Pregnant Women, Infants and Children(as of May 20, 1998) Other Eligibility Categories Pregnant Women and Infants Children Under Age 6 Children Ages 6 to 14 Children Ages 14 to 19 Asset Test Required for Children (4) Max. AFDC Payments (7/16/96) (5) Medically Needy, 1996 (percent of Federal Poverty Level) United States 133 133 100 45 49 Alabama 133 133 100 100 No 15 N/A Alaska 133 133 100 90 No 76 N/A Arizona 140 133 100 30 No 32 N/A Arkansas (2,3,4) (133) (200) 200 200 200 Yes 19 25 California (1) 200 133 100 100 No 56 86 Colorado (1,4) 133 133 100 37 Yes 39 N/A Connecticut 185 185 185 185 No 81 71 Delaware 185 133 100 100 No 31 N/A District of Columbia 185 133 100 37 No 37 N/A Florida (1) 185 133 100 100 No 28 28 Georgia 185 133 100 100 No 39 35 Hawaii 185 133 100 100 No 57 57 Idaho (4) 160 160 160 160 Yes 29 N/A Illinois 200 133 130 133 No 35 45 Indiana 150 133 100 100 No 27 N/A Iowa (4) 185 133 100 37 Yes 39 52 Kansas 150 133 100 100 No 40 44 Kentucky 185 133 100 46 No 49 28 Louisiana 133 133 100 17 No 18 N/A Maine 185 133 125 125 No 51 42 Maryland (2) 185 185 185 33 No 34 40 Massachusetts (1) 185 133 133 133 No 52 72 Michigan 185 150 150 150 No 45 52 Minnesota (3) 275 275 275 275 No 49 66 Mississippi 185 133 100 32 No 34 N/A Missouri 185 133 100 100 No 27 N/A Montana (4) 133 133 100 48 Yes 41 46 Nebraska 150 133 100 100 No 34 45 Nevada (4) 133 133 100 31 Yes 32 N/A New Hampshire 300 185 185 185 No 51 60 New Jersey (1) 185 133 133 133 No 41 52 New Mexico 185 185 185 185 No 36 N/A New York (1) 185 133 100 51 No 61 76 North Carolina 185 133 100 100 No 50 34 North Dakota (4) 133 133 100 100 Yes 40 47 Ohio 150 150 150 30 No 32 N/A Oklahoma 185 185 185 185 No 28 42 Oregon (4) 133 133 100 100 Yes 43 57 Pennsylvania (1) 185 133 100 37 No 39 43 Rhode Island (3,4) 250 250 250 250 Yes 51 69 South Carolina 185 150 150 150 No 18 N/A South Dakota 133 133 100 100 No 47 N/A Tennessee (3) 400 400 400 400 No 54 23 Texas (4) 185 133 100 17 Yes 17 25 Utah (4) 133 133 100 100 Yes 53 53 Vermont (3) (200) (225) 225 225 225 No 59 81 Virginia 133 133 100 100 No 22 33 Washington (185) (200) 200 200 200 No 50 62 West Virginia 150 133 100 100 No 24 27 Wisconsin 185 185 100 45 No 48 64 Wyoming (4) 133 133 100 52 Yes 55 N/A SOURCE: Center on Budget and Policy Priorities. 1998 and National Governors’ Association. 1996 and 1997. N/A: No medically needy programNote: The 1998 Federal poverty guideline for a family of three was $13,650; for Alaska $17,070 and Hawaii $15,700.(1) The state operates separate child health insurance programs for children not eligible for Medicaid. Such Programs may provide benefits similar to Medicaid or they may provide a limited benefits package and may include premiums and cost-sharing.(2) Children covered under Medicaid expansion programs in Arkansas and Maryland receive reduced benefits package pursuant to federal waivers.(3) The Medicaid programs in AR, MN, RI, TN, and VT may impose some cost-sharing-premiums and/or co-payments for some children pursuant to federal waivers.(4) The states noted count assets, in addition to income, in determining Medicaid eligibility for children; Utah does not consider assets for young children. An assets test in NOT required in Arkansas for its Medicaid expansion program.(5) The United States figure represents the median maximum AFDC payment level.

Appendix Table 2: Expansion Population Eligibility in State Medicaid Programs Operating Under Statewide Section 1115 Demonstration Waivers*State ExpansionPopulation FamilyIncomeRequire-ment ResourceRequire-ment CategoricalRequire-mentWaived Premium/Cost-Sharing EnrollmentCap Alabama Children aged 6-19 < 133% FPL N/A Change in income requirement No premium/cost-sharing No Women for 24 months post-partum^a < 133% FPL Pregnancy Arizona Children up to age 14 < 100% FPL N/A Change in income requirement $1-5 copay, depending on service. No copay for prescription drugs, prenatal care, EPSDT care, nursing facility services, and primary care visits not scheduled by the patient. No Pregnant women and infants < 140% FPL N/A Change in income requirement Arkansas Children up to age 19 < 200% FPL No resource test Change in income requirement $5 copay for prescriptions, $10 copay for outpatient services, percentage copay for hospital per diem No Delaware Low-income children and adults < 100% FPL N/A Changes income requirement for children, waives requirement of pregnancy, disability, or dependent children No premium/cost-sharing No Hawaii Low-income children and adults < 300% FPL < $2,000 for single person, < $3,000 for couple Changes income requirement for children, waives requirement of pregnancy, disability, or dependent children All persons (except pregnant women) making over 100% FPL pay 100% of medical, dental, and catastrophic care premiums. Sliding payment scale for children under 200% FPL. No Kentucky No eligibility expansion Maryland No eligibility expansion Massachusetts Low-income employed < 200% FPL No resource test Dependent child, pregnancy, disability Cost-sharing on a sliding scale based on income No Low-income unemployed < 133% FPL No resource test Dependent child, pregnancy, disability Unemployed persons receiving state or federal unemployment benefits < 400% FPL No resource test Dependent child, pregnancy, disability State ExpansionPopulation FamilyIncomeRequire-ment ResourceRequire-ment CategoricalRequire-mentWaived Premium/Cost-Sharing EnrollmentCap Minnesota Pregnant women and children up to age 19 < 275% FPL No resource test Changes income requirement Premiums range from 1.5 to 8.8% gross income, $4/month premium for families with children < 150% FPL, non-pregnant adults pay 10% of inpatient hospital costs with $1,000 maximum No Planned extension to low-income adults N/A N/A Dependent child, pregnancy, disability New Jersey Low-income individuals < 200% FPL < $7,500 for individual, < $15,000 per family Dependent child, pregnancy, disability Individuals with income below 200% FPL receive fully subsidized care; individuals with income below 300% FPL receive partially subsidized care. No Low-income individuals < 300% FPL < $7,500 resources for individual, < $15,000 per family New York Home Relief population N/A Dependent child, pregnancy, disability No premium/cost-sharing No Women for 24 months post-partum^a< 185% FPL Pregnancy Ohio No eligibility expansion Oklahoma No eligibility expansion Oregon Low-income children and adults < 100% FPL < $5,000 Dependent child, pregnancy, disability Cost-sharing on sliding scale for adult, non-pregnant new eligibles. No Rhode Island Pregnant women and children under age 8 < 250% FPL N/A Change in income requirement Individuals with family incomes between 185-250% FPL subject to cost-sharing requirements. No Women for 24 months post-partum^a < 250% FPL Pregnancy Tennessee Uninsurable individuals N/A No resource test Dependent child, pregnancy Individuals with family incomes > 100% FPL subject to cost-sharing requirements on sliding scale based on income. Enrollment capped at 1,775,000^b Persons ineligible for employer- or government-sponsored health plans No resource test Dependent child, pregnancy, disability Vermont Low-income children and adults < 150% FPL N/A Dependent child, pregnancy, disability No premium/cost-sharing *Based on data collected by the George Washington University Center for Health Policy Research. N/A indicates that this information was not clear based on the information reviewed.a. Only family planning services are covered under this extension.b. Tennessee does not cap enrollment of traditional eligibles meeting the state’s 1993 Medicaid eligibility criteria and uninsurable persons. The enrollment of uninsured persons is limited by the difference between 1,775,000 and the sum of traditional eligibles and uninsurable persons.

¹ Thomas Selden, Jessica Banthin, and Joel Cohen, “Medicaid’s Problem Children: Eligible but not Enrolled,” Health Affairs. May/June 1998: 192-200.

² Medicaid eligibility policy vis-a-vis the disabled and the elderly will be the focus of subsequent analyses.

³ See Lake Snell Perry & Associates, Barriers to Medi-Cal Enrollment and Ideas for Improving Enrollment: Findings from Eight Focus Groups with Parents of Potentially Eligible Children. Kaiser Family Foundation, September 1998.

⁴ See Kaiser Commission on Medicaid and the Uninsured, “Medicaid Eligibility and Enrollment Projects,” September 1998; Donna Cohen Ross, Child Health Outreach Handbook , Center on Budget and Policy Priorities, July, 1998; Sarah Shuptrine, Vicki Grant, and Genny McKenzie, Southern Regional Initiative to Improve Access to Benefits for Low-income Families with Children, Southern Institute on Children and Families, February 1998.

⁵ Congressional Budget Office, Behind the Numbers: An Explanation of CBO’s January 1997 Medicaid Baseline, April 1997, p. 7.

⁶ For detailed state-by-state data on the number and type of beneficiaries covered, see David Liska, Brian Bruen, Alina Salganicoff, Peter Long, and Bethany Kessler, Medicaid Expenditures and Beneficiaries: National and State Profiles and Trends, 1990-1995, Third Edition, Kaiser Commission on the Future of Medicaid, November 1997.

⁷ Statement of Bruce C. Vladeck, Administrator, Health Care Financing Administration, “1998 Budget for Medicaid and Medicare Part B” presented to the House Commerce Committee, Subcommittee on Health and Environment, February 12, 1997.

⁸Choices Under the New State Child Health Insurance Program: What Factors Shape Cost and Coverage? Kaiser Commission on Medicaid and the Uninsured, January 1998.

⁹MCH Update: State Medicaid Coverage of Pregnant Women and Children, National Governors’ Association, September 1997, www.nga.org.

¹⁰ See David Super, Sharon Parrott, Susan Steinmetz, Cindy Mann, The New Welfare Law, Center on Budget and Policy Priorities, August 14, 1996, http://www.cbpp.org.

¹¹ For a discussion of eligibility rules relating to two-parent families, see Jocelyn Guyer and Cindy Mann, Taking the Next Step: States Can Now Take Advantage of Federal Medicaid Matching Funds to Expand Health Care Coverage to Low-Income Working Parents, Center on Budget and Policy Priorities, July 1998, www.cbpp.org.

¹² 63 Fed. Reg. 42270 (August 7, 1998.)

¹³ Jeff Harris and Jane Horvath, The Administrative Impact of the Medicaid Eligibility Resource Test, Kaiser Commission on the Future of Medicaid, April 1993.

¹⁴ Marilyn Moon, The Urban Institute, Asset Limits and Medicaid, Kaiser Commission on the Future of Medicaid, April 1993.

¹⁵ See Leighton Ku and Bethany Kessler, The Number and Cost of Immigrants on Medicaid: National and State Estimates, Urban Institute, December 1997. For a discussion of the impact of the welfare law changes on elderly legal immigrants, see Robert B. Friedland and Veena Pankaj, Welfare Reform and Elderly Legal Immigrants, Henry J. Kaiser Family Foundation, July, 1997. For a review of the options remaining to states with respect to coverage of this population through either federally-funded or state-funded programs, see Kelly Carmody, State Options to Assist Legal Immigrants Ineligible for Federal Benefits, Center on Budget and Policy Priorities, February 1998, http://www.cbpp.org.

¹⁶ Sara Rosenbaum, Medicaid and Migrant Farmworker Families: Analysis of Barriers and Recommendations for Change, National Association of Community Health Centers, 1991.

¹⁷ Guyer and Mann. July 1998.

¹⁸www.hcfa.gov/init/chip-map.cfm

¹⁹ Guyer and Mann. July 1998.

²⁰ For a summary of the expansion populations covered by some states under section 1115 waivers, see Sara Rosenbaum and Julie Darnell, Statewide Medicaid Managed Care Demonstrations under Section 1115 of the Social Security Act: A Review of the Waiver Applications, Letters of Approval, and Special Terms and Conditions, Kaiser Commission on the Future of Medicaid, May 1997.

²¹ Under section 1931 of the Social Security Act, States have the option of liberalizing their financial eligibility standards for adults in one-parent and certain two-parent families by adopting “less restrictive” income or resource methodologies. They do not, however, have the option to liberalize the non-financial eligibility rules. In order to receive federal Medicaid matching funds for the coverage of childless non-disabled adults who do not meet these family composition requirements, states must obtain a waiver from the Secretary of HHS under section 1115.

²² Schoen, C., B. Lyons, D. Rowland et al, “Insurance Matters for Low-Income Adults: Results from a Five-State Survey” Health Affairs, Sept/Oct 1997.

²³ Selden, Banthin, and Cohen, May/June 1998.

²⁴ See Alina Salganicoff and Patricia Seliger Keenan, Child Health Facts: National and State Profiles of Coverage, Kaiser Commission on Medicaid and Uninsured, January 1998. Return to top

Policy Brief Part 1 Part 2 Part 3 Part 4 Part 5Library Index

Participation in Welfare and Medicaid Enrollment

September 1998

The number of families receiving cash assistance through Aid to Families with Dependent Children (AFDC) or Temporary Assistance to Needy Families (TANF) programs has decreased dramatically in recent years. From March 1994 to March 1998, caseloads fell by 35%, declining from 5 million to 3.2 million families. Recent data also indicates that there has been a decline in Medicaid enrollment. Although the decline is small in comparison to the TANF decline, it is striking at a time of continuing expansions of Medicaid eligibility. Moreover, Medicaid enrollment data corresponding to the period of the greatest TANF caseload declines is not yet available.

AFDC/TANF caseloads began to fall in 1994, but most of the decline has occurred since enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. From August 1996 to March 1998, the number of families receiving assistance dropped by 27%. Medicaid enrollment of children under 15 years also fell from 15.5 million in 1995 to 15.1 million in 1996; the number of adults aged 21-44 dropped from 8.6 million to 8.2 million over the same period. Overall, the number of Medicaid beneficiaries declined slightly (from 36.3 million to 36.1 million from 1995-1996), with preliminary indications of a further decline in 1997.

Is the AFDC/TANF caseload decline contributing to a reduction in Medicaid participation? If so, how? Although there is no conclusive analysis of the factors contributing to this reduction, one important piece of evidence comes from a set of recent state studies of families no longer receiving AFDC/TANF. These studies consistently find that Medicaid enrollment falls after families leave AFDC/TANF. If the drop in Medicaid participation was because families were leaving AFDC/TANF due to employment and receiving employment-based health care coverage, the decline might not be a point of concern, but this is often not the case. The reduction in Medicaid enrollment when families leave AFDC/TANF significantly exceeds the numbers receiving employment-based health care coverage.

The TANF exit studies do not analyze the reasons for the drop in Medicaid enrollment and it remains unclear how much of the drop might be attributable to family members no longer being eligible, to failure to identify eligible families, lack of awareness of the availability of continuing benefits, agency errors, or other factors. What does seem clear, however, is that the drop in enrollment is substantial and needs state attention to ensure that eligible families do not lose Medicaid assistance.

This paper:

• summarizes the relationship between AFDC receipt and Medicaid eligibility and how the relationship changes under TANF;
• describes evidence from recent state studies of AFDC/TANF exits and sanctions indicating that Medicaid enrollment and health care coverage fall after families leave AFDC/TANF; and
• raises a set of questions as to why such declines in Medicaid enrollment are occurring.

A. Background: The relationship between AFDC, TANF, and Medicaid

Before considering what happens to Medicaid when families leave AFDC/TANF, it is helpful to review what is supposed to happen under federal law. The following summarizes the relationship between AFDC and Medicaid and how the relationship changes under TANF.

Prior to the passage of the 1996 welfare law, PRWORA, AFDC recipients were automatically eligible for Medicaid. When a family left AFDC, federal law required the state to continue the family’s Medicaid until the state determined whether family members qualified for Medicaid on another basis. In recent years, it became increasingly likely that at least the younger children in the family would remain eligible for Medicaid on independent grounds, e.g., children under six with incomes below 133% of poverty, children born after September 30, 1993 with family incomes below 100% of poverty, children covered through optional state expansions. For parents and older children, however, the principal basis for continued eligibility was through transitional Medicaid, which provided up to twelve months of Medicaid eligibility for family members leaving AFDC due to employment or four months of eligibility for those leaving AFDC due to increased collection of child or spousal support.¹

An AFDC family member could lose Medicaid as a result of an AFDC “sanction.” In the last years of AFDC, states were increasingly likely to impose sanctions when a family member failed to comply with work-related requirements without good cause. Typically, a sanction would result in a reduction or elimination of the family’s cash assistance, and in loss of AFDC-linked Medicaid for the individual violating program rules, but a sanction should not have resulted in loss of AFDC-linked Medicaid for other family members.

The 1996 welfare law created Temporary Assistance to Needy Families and “delinked” Medicaid from family cash assistance. Thus, TANF recipients are not automatically eligible for Medicaid. As noted above, many children and some parents will be eligible for Medicaid on independent grounds. However, if a family member does not qualify for Medicaid on other grounds, the state must determine whether the family member is eligible for Medicaid based on a new category known as Section 1931 eligibility.

Generally, Section 1931 provides that a family member will qualify for Medicaid if he or she meets the income, resource, and family composition rules that applied to the state’s AFDC Program on July 16, 1996.² States were provided with a limited ability to modify these rules, including a provision which allows states, in effect, to liberalize their treatment of income and resources.³

As a result:

• If a state’s income, resource, and family composition rules under TANF are the same as or narrower than the rules in effect in AFDC on July 16, 1996, then all TANF families should qualify for Medicaid under Section 1931;
• If a state’s TANF eligibility is broader than that in effect in AFDC on July 16, 1996, the state may be able to exercise options to make Section 1931 eligibility conform with TANF eligibility; if the state cannot or does not choose to do so, then some TANF families will not qualify for Medicaid under Section 1931;
• Since Section 1931 eligibility depends on income, resources, and family composition rather than receipt of TANF, it is entirely possible that a family will still qualify under Section 1931 even after losing TANF eligibility. As states implement TANF time limits and other restrictions on TANF eligibility, one would anticipate an increasingly large group of persons who meet Section 1931 eligibility standards without qualifying for TANF assistance.

There is still a transitional Medicaid category under the new law, but eligibility is not based on losing TANF. Rather, it is based on losing Section 1931 eligibility, i.e., a family member losing Section 1931 Medicaid due to employment may qualify for up to twelve months of transitional Medicaid, and a family member losing Section 1931 Medicaid due to increased collection of child or spousal support may continue to qualify for Medicaid for an additional four months.

Under TANF, a state has broad discretion to impose sanctions or terminate family assistance for reasons of the state’s choosing, e.g., failure to attend school, failure to immunize children, etc. However, under the law, the only TANF sanction that could affect Medicaid eligibility is a work-related sanction. A state can choose to terminate the Medicaid of an adult (or minor child head of household) for a refusal to work, but may not extend the Medicaid sanction to other family members. According to preliminary information, fifteen states had elected this option as of January 1997.⁴

In summary, under both AFDC and TANF, the loss of cash assistance should not result in automatic loss of Medicaid. The state has an obligation to examine alternative eligibility pathways. Younger children may still qualify through other categories and the entire family may qualify for transitional Medicaid. If a family is terminated from cash assistance due to sanction, the sanction could affect Medicaid eligibility for the person who violated program rules, but not other family members.

B. AFDC/TANF Exits and Health Care Coverage: Recent Evidence from State Studies

This section describes the context for state studies of AFDC/TANF exits, and then draws from a set of exit studies to highlight how Medicaid enrollment falls when families leave AFDC/TANF.

1. The context for state exit studies

As the AFDC/TANF caseload has fallen, there has been increasing interest in trying to understand reasons for the decline and what has happened to the families who have left assistance. Unfortunately, there is little reliable national data from which one can identify the principal components of the decline, i.e., how much is attributable to the economy, to new supports for working families, to state restrictions on assistance, or other causes. Moreover, the caseload could be declining because fewer people are applying for assistance, fewer applications are being approved, the exit rate has increased or some combination of these factors.⁵ However, national data is not available to help understand if there has been a change in the number of applicants, the rate of application approval, or the number of exits since TANF implementation began.

The following discussion focuses on exits from assistance because a number of state studies provide data about what happens to Medicaid after families exit from AFDC/TANF. However, it should be emphasized that some observers believe that a large part of the caseload decline may be attributable to fewer families entering TANF. There are significant concerns that state policies intended to “divert” applicants from TANF may also result in the families failing to proceed with Medicaid applications. Thus, the focus here on exits only encompasses one aspect of the relationship between the TANF caseload decline and Medicaid enrollment.

It is broadly viewed that two factors contributing to exits are increases in the numbers of families entering employment and increases in the numbers losing assistance due to state sanction/penalty policies. It is almost universally believed that employment exits have increased under TANF, though administrative data about reasons for exits have historically been unreliable, so it is difficult to know whether the number of employment-related exits has changed.⁶ It is also broadly believed that one reason for the caseload decline has been the increase in states’ use of sanctions for violations of program rules. A recent survey of state TANF policies found that thirty-six states now impose “full-family sanctions,” i.e., benefit terminations at some point in the sanction process, with fourteen states imposing such penalties for the first violation of program rules.⁷

Employment and sanctions are not the only reasons why families might be exiting or not entering the TANF system. Families have always left assistance for an array of other reasons: e.g. moving, ceasing to have an eligible child, marrying, or failing to comply with procedural requirements.

There is no requirement that a state conduct a study of exits from assistance, though a number of states have chosen to do so. Because there are no federal requirements, there is also no federal protocol that states must follow when they choose to do an exit study, so the studies that have been done vary widely in their methodologies and research questions. Studies are also being conducted for different purposes. Some are looking broadly at what happens to families who exit from assistance. Some focus in particular on families that have been subject to sanctions or to benefit termination for program noncompliance. Some ask about Medicaid receipt and others do not. Most exit studies that ask about Medicaid receipt do not distinguish between parents’ and childrens’ coverage. Some of the studies ask employed parents whether health coverage is available at the parent’s job, but most do not ask whether the parent actually receives such coverage or whether coverage is available for both the adult and her dependents.

2. Findings from State Exit Studies Concerning Medicaid Consequences of Loss of AFDC/TANF

Despite the array of approaches, methodologies, and questions asked, the studies that ask about Medicaid receipt do provide a fairly consistent picture:

• When families cease receiving AFDC/TANF, Medicaid enrollment goes down. The magnitude of the decline varies between studies, but often, one-third or more of children and most adults in families that have exited are no longer reported to be receiving Medicaid when exiters are surveyed some number of months after leaving.
• Most families entering employment after having received AFDC/TANF do not have employment-based health care coverage. Typically, among families who are employed, the share reporting employment-based coverage is 25% or less.

This section describes the basic findings, first describing the more general exit studies, and then focusing on those which examine families that lost cash assistance as a result of sanction/benefit termination policies.

South Carolina’s most recent study of exiters found that eight to twelve months after leaving cash assistance, 16% of children and half of adults had no form of health care coverage.⁸ The survey drew from a sample of cases that were closed for any reason during April 1997 to June 1997. Interviews were conducted in February1998 to May 1998 with a 76% response rate. At the time of the interviews, most (70%) respondents said they were employed, with an average wage of $6.44 per hour. Most children (84%) had some form of health insurance. Private insurance played only a small role: 73% of children were receiving Medicaid; 11% had other coverage. No information was available as to why the remaining children had no reported coverage. For adults, 36% received Medicaid, 14% had other coverage, and the remaining 50% had no coverage. The survey also asked “Was somebody in your home ever sick or hurt when you could not get medical care?” Respondents in 9.7% of households responded “yes” for the period after having left welfare, as opposed to 3.6% for the period while receiving welfare.⁹

A New Mexico exit survey contains data suggesting that about one-quarter of children and most adults had neither Medicaid nor employment-based health care coverage at the time of the survey. The New Mexico survey had a very low response rate; the survey was sent to 5,000 randomly selected persons whose AFDC cases had been closed between July 1996 and June 1997, and there were 617 valid responses (12%).¹⁰ At the time of the survey, 56% of respondents were currently working. Almost two-thirds (64%) of respondents were receiving Medicaid for their children; only 30% of respondents indicated that they were personally covered by Medicaid. Only 20% of employed respondents indicated that they were actually getting medical insurance at work. Half of employed respondents indicated that they could get health insurance at work, but only 41% of employed respondents who indicated that they could get medical insurance at work were actually doing so. Of employed respondents not receiving available medical insurance at work, 49% indicated that the insurance was too expensive, and 18% indicated that a waiting period was imposed. Even if one assumes that respondents with medical insurance at work were receiving coverage for both themselves and their children (which may be an optimistic assumption), the resulting estimate would be that about 75% of children and 41% of adults who had left AFDC/TANF had health coverage either through Medicaid or employment.

An Indiana survey found that about one-third of children and most adults had no health care coverage after having exited TANF.¹¹ The Indiana survey looked at the circumstances of a group of families 12 to 18 months after they first enrolled in the state’s welfare reform initiative; at that point, slightly more than half of the respondents (53%) were no longer receiving TANF assistance. Of the families no longer receiving TANF, 64% were working at the time of the survey. The survey found that among families no longer receiving TANF assistance, 46% of the adult respondents and 65% of children were covered by some form of health insurance (Medicaid or private coverage) at the time of the survey.¹² The survey found that 53% of respondents were receiving Medicaid for one or more family members, although the report does not distinguish whether the Medicaid enrollment was for children only or also extended to the parent. Among working respondents, 61% were reported to be in jobs that offered health insurance, but the survey results do not indicate what share of employed recipients were actually receiving employer-based health insurance.

A recent Washington study found that about one-third of families were without adult health care coverage and 16% of children were without child health coverage after leaving TANF.¹³ The study used a telephone survey of single-parent families who left TANF between December 1997 and March 1998; interviews were conducted between mid-April and the end of May. Two-thirds (68%) of respondents were employed at the time of the survey. Of those currently working or who had worked during the last 12 months, 37% reported health care benefits from their current or most recent job; however, only 21% of those currently employed reported that they were currently covered by an employer-sponsored plan.¹⁴ Respondents reported that 53% of children of former TANF recipients had Medicaid coverage; when taking into account employer-based coverage and other health coverage, 16% of children were reported to have no coverage. For adults, 36% reported receiving Medicaid and 35% of adults reported they were without health care coverage for themselves.¹⁵

The Washington survey also asked respondents whether they considered themselves better off, worse off, or about the same since leaving welfare. Those reporting being worse off were more likely to also report having no health care coverage for adults or children; the difference was statistically significant.¹⁶

Another Washington State survey did not focus on current health care coverage of exiters, but does provide further evidence of the lack of employer-based health care coverage.¹⁷ Washington surveyed a random sample of all AFDC single-parent households who had ever received assistance between May and October 1996, with the surveys taking place between February and May of 1997. Almost half (46%) had worked at some point since January 1996. Of those who had ever worked in that time, 23.3% reported that health care was provided by the employer in their current or most recent job.¹⁸

A recent Louisiana study looking at families leaving assistance in New Orleans found that most respondents reported that they were not receiving Medicaid after leaving assistance.¹⁹ The telephone survey in April1998 to May 1998 sought to survey all families in the New Orleans metropolitan area who stopped receiving assistance in the months of January to March of 1998; the response rate was only about 17.5%. One fifth (21%) reported having lost assistance due to employment and one-third (34%) reported being employed at the time of the survey. Only 40% of respondents stated that they were currently receiving Medicaid; based on the survey wording, it is unclear how respondents who were receiving Medicaid for their children but not themselves would have responded to the question. When asked about problems encountered in the past three months since ceasing to receive welfare, 39% of respondents said that they couldn’t afford medical care or medications.²⁰

A recent study in Wisconsin does not provide information on health care coverage generally, but does find that after leaving AFDC, nearly half of families were no longer receiving Medicaid.²¹ The study tracked the earnings and employment experience for all single parents receiving AFDC in Milwaukee County in December 1995. Of the initial group of 25,125, nearly one-third (7502) were no longer receiving AFDC in September 1996. Of the group not receiving AFDC in September 1996, most (66%) had earnings in the next quarter, although 50% had earnings below the poverty line for a family of four and an additional 34% had no earnings. The study asked whether any family member was receiving Medicaid, and found that for at least 45% of the closed cases, no family member was receiving Medicaid in December 1996.²²

The highest levels of continued public health coverage are found in Tennessee’s follow-up survey.²³ Tennessee’s report is a compilation of surveys of recipients employed full or part time or individuals whose cases were closed due to full-time employment; recipients closed for noncompliance; and recipients who refused to sign a Personal Responsibility Plan. A survey of individuals who were employed beginning in March 1997 and could be reached during a four-week interview window between June and October found that 15% had medical insurance; 13% with hospital insurance; and 92% were covered by TennCare. The survey of sanctioned individuals found that TennCare covered 88% of the sanctioned group. Tennessee officials note that under the state’s TennCare waiver, all family members (except a parent subject to a child support sanction) are eligible for eighteen months of transitional Medicaid when losing TANF assistance.Return to top

Participation in Welfare and Medicaid EnrollmentPolicy Brief Part 1 Part 2

Part 2

In addition to the state exit studies,²⁴ another source of evidence about the impacts of loss of cash assistance can be found in the set of evaluations of the impacts of welfare-work initiatives. Several program evaluations contain data which may suggest that one unintended consequence of state efforts to increase employment among families receiving assistance could be a decline in health care coverage:

• The National JOBS Program Evaluation measured the impacts of employment efforts at a set of sites around the country using experimental design, where one set of families were subject to program participation requirements and another set were not. Three sites operated a “labor force attachment” model, focusing on rapid job placements. In those sites, two years after families entered the study, the employment rates were higher for the experimental group (42.5% versus 34.4% for a control group) but the percent covered by Medicaid or private health insurance during the month before the survey was lower for the experimental group (77.4% versus 82.7% for the control group.) Thus, the focus on rapid employment had led to an eight percentage point increase in the number of families with employment, but a five percentage point decline in the number covered by either Medicaid or private health insurance.²⁵
• In Florida’s Project Independence, 45% of a sample of those subject to Project Independence requirements were employed at some point in a two-year period and their most recent job did not provide health benefits; for the control group, the comparable figure was 37%.²⁶
• The Riverside County GAIN Program has often been recognized for its large impacts in raising employment rates among those subject to its requirements. The evaluation of the program found that in a survey interview two to three years after orientation, 27% of those subject to program requirements (as compared with 18% of members of a control group) reported that Medicaid or other health insurance did not personally cover them.²⁷

Thus, in each of these instances, the program was successful in raising employment entries, but one unintended consequence was a decline in health care coverage for affected families.

3. Findings from State Benefit Termination/Sanction Studies Concerning Medicaid Consequences of Loss of AFDC/TANF

Another set of studies focus specifically on families losing assistance due to sanctions. As noted, until fairly recently, state sanction policies only terminated assistance to the parent rather than to the entire family when a single parent failed to comply with program requirements, but in the last years of AFDC, states began to make use of full-family terminations, and under TANF, such policies have become widespread. The use of full-family terminations has raised many questions about the impacts of such policies on the well-being of parents and children, though to date, there are only a handful of studies that expressly look at the impacts of such terminations.

When a sanction occurs, it is possible that the parent’s Medicaid coverage is being terminated as a matter of sanction policy, but under the law applicable both before and after TANF, the imposition of the penalty on the parent should not have affected the childrens’ Medicaid coverage.

One of the first indications that loss of cash assistance might be associated with loss of Medicaid came in a review issued by the General Accounting Office of early state experiences with benefit terminations. At the time of the report (May 1997) most states did not have significant numbers of benefit terminations for noncompliance with program rules. Three states with early experiences were Massachusetts, Iowa, and Wisconsin. In each of these three states, the level of Medicaid coverage fell substantially after benefit termination. Surveys conducted in the range of two to five months after termination of benefits showed:

• in Massachusetts, the share of families in which at least one family member received Medicaid fell from 100% to 58.5%;
• in Wisconsin, the share of families in which at least one family member received Medicaid fell from 100% to 53.5%;
• in Iowa, the share of families in which at least one family member received Medicaid fell from 86.3% to 54.4%.

Declines were also seen in food stamp receipt. The GAO noted that “officials in all three states expressed surprise at the amount of the decline in receipt of food stamps and Medicaid among households losing AFDC benefits.”²⁸

Iowa engaged in a more detailed study of families whose assistance was denied or terminated for failure to comply with requirements to enter into or follow through with a Family Investment Agreement (FIA).²⁹ Data in that study suggests that in about one-third of sanctioned families, neither the parent nor children were receiving Medicaid, and that in about 28% of sanctioned families, neither the parent nor children were receiving either Medicaid or employer-based coverage. As Iowa’s program was originally designed, a family that did not comply with requirements would enter into a “Limited Benefit Plan,” in which the family would receive the same level of assistance for a three month period, receive reduced assistance for another three months, and then enter into a six month period of ineligibility; during this time, the family should have remained Medicaid-eligible if financially eligible, although families entering employment while subject to a Limited Benefit Plan (LBP) would not qualify for transitional Medicaid. The evaluation included a survey of families in Months 10 or 11. By that point, most (52.6%) families whose assistance was terminated under the LBP rules had been employed at least once since losing cash assistance. For those who had been employed, their most recent job had offered health insurance in 36% of the cases, though only 11% of the employed had actually received employer-based insurance.³⁰ In total, then, about 5.6% of respondents (10.6% of the 52.6% who had entered employment) were receiving employer-based health coverage, and a total of 66.4% of respondents were receiving Medicaid. Thus, it appears that about 28% of those under sanction were not receiving either Medicaid or employer-based health care coverage.

An even larger drop in Medicaid receipt after sanctioning was found in Michigan. Michigan conducted a study examining the first 168 cases that received full-family sanctions when Michigan began to implement such sanctions in April 1996. Of the cases, almost a quarter (24%) were either reopened or in pending status. However, of those still closed, 41% were not active for Medicaid.³¹ Michigan officials note, however, that the sanction population may be significantly different from the overall population receiving cash assistance, and that the growth in the average number of individuals receiving Medicaid through Michigan’s transitional Medicaid program and Healthy Kids program in 1998 substantially exceeds the reduction in the number of individuals receiving TANF assistance.

C. Why would exiters lose Medicaid?

The exit/sanction studies make clear that a substantial share of children and parents leaving AFDC/TANF lose Medicaid, either immediately or in a short period of time. The studies do not, however, offer any explanation of why this Medicaid drop occurs. There are several possible explanations and different explanations may apply to different states or even to different offices. In addition, whatever the reasons for the drops in enrollment under prior law, a state wishing to prevent this result can, to a significant extent, prevent comparable drops under TANF through the state’s choices in implementing Section 1931 eligibility.

Some of the possible reasons for the drop in Medicaid enrollment after leaving AFDC/TANF are:

• Family members may no longer be eligible. This is less likely to be the explanation for younger children, though it may explain some of the drop for parents and older children. As noted, the principal pathway to continued eligibility for parents and older children has been transitional Medicaid. However, under AFDC, transitional Medicaid would only have been available to those leaving AFDC due to employment or child or spousal support, and families often exit for other reasons. If the family did not exit due to employment, the family’s subsequent employment would not be sufficient to result in eligibility for transitional Medicaid. Even if the family exited AFDC due to employment, the family might not have qualified for transitional Medicaid if, for example, the family had not received AFDC for at least three of the last six months before exiting due to employment. And, once the family begins receiving transitional Medicaid, the family may lose eligibility for various reasons.³²
• Family members may not seek transitional Medicaid because they do not know about it. In South Carolina’s most recent exit study, 84% of respondents knew that children could continue to get Medicaid after leaving welfare but only 55% knew that adults who left welfare for work might continue to get Medicaid. Under the law, a state has an obligation to determine continuing eligibility even if the family does not request it, but a parent who does not know about transitional Medicaid may not understand the importance of reporting that she is leaving assistance due to employment.
• States may not code families as leaving assistance due to employment although that is the reason for the exit. For example, in Maryland’s exit study (which does not provide information on health care coverage), 11.2% of a sample of closed cases had been coded as closed because “payee started work or has higher earnings” while state employment and wage data indicated that at least half of payees were working in the quarter in which they left assistance.³³
• State procedures may erroneously terminate Medicaid or not provide for an effective mechanism to determine continuing eligibility. For example, North Carolina officials recently announced their intention to investigate whether local social services workers erroneously cut off Medicaid for 24,000 children who were no longer receiving Medicaid two months after their family stopped receiving TANF.³⁴
• Parents may be discouraged or confused after loss of TANF assistance. Several researchers who were involved in conducting exit studies raised the possibility that after TANF assistance was terminated, families might fail to provide needed information for Medicaid redeterminations or choose not to do so because they wanted no further contact with the state or might even be confused as to whether Medicaid for family members had been terminated. A recent review of the impact of federal welfare changes on Medicaid noted that several states had acknowledged that problems in the redetermination process could be impacting Medicaid continuations.³⁵

Whatever the reasons under prior law, it is important to appreciate that at least some of the drop-off in Medicaid enrollment can be prevented through attention to state administrative procedures and by state choices in implementing the Section 1931 eligibility criteria.

In attending to administrative procedures, a state can focus on outreach efforts and on attention to those stages at which drop-off or non-enrollment is most likely to occur. For example:

• Massachusetts indicates that in the last two years, the state has expanded automatic enrollment of closed AFDC/TANF cases into the MassHealth (Medicaid) Program to extend to all closed AFDC/TANF case closings. In addition, the state indicates that it has undertaken an extensive marketing campaign to inform low income families about the availability of health insurance through the MassHealth Program, and has begun an automated outreach process to recipients denied eligibility for TANF at the point of application for assistance.
• South Carolina indicates that after becoming aware of initial evidence of problems in ensuring uninterrupted Medicaid coverage, the state took measures to improve receipt of Medicaid for eligible families. The agency began showing a videotape to recipients to explain how and when support services continue after closure of the welfare case. Case managers were instructed to question clients who request voluntary closure of assistance cases to determine if the client had become employed; if earnings were verified, the case would be closed for earnings rather than voluntary closure so that the family could qualify for transitional benefits. The state’s efforts may have resulted in increased awareness of the availability of continued Medicaid benefits; in quarterly surveys, the share of respondents indicating awareness that children could continue to get Medicaid after leaving welfare increased from 79% to 84% between the first and third surveys; the share indicating awareness that adults leaving welfare for work may continue to get Medicaid increased from 40% to 55%.³⁶
• Indiana indicates that it has initiated an extensive outreach effort for Medicaid-eligible children that includes efforts to enroll children through sites such as health clinics, day care centers, schools, hospitals, and that the state has begun planning a strong media campaign for its outreach.³⁷

As noted earlier, under Section 1931, a family’s Medicaid eligibility no longer is based on whether the family receives TANF and a state is free to broaden the effective income and resource rules that determine eligibility under Section 1931.³⁸ Thus, if a state wishes to ensure that family members continue to be eligible for Medicaid after entering low-wage employment, the state may do so under Section 1931. A continuation of Section 1931 eligibility for those entering low-wage jobs would address some of the problems presented by the eligibility restrictions and administrative requirements of transitional Medicaid.³⁹ Moreover, it could help to address the problems presented by the limited receipt of employer-based health care for families exiting TANF due to employment.

The TANF exit studies underscore the importance of using Section 1931 to broaden Medicaid eligibility for working poor families. Without such a broadening of eligibility, it seems likely that one consequence of TANF implementation will be fewer families receiving TANF, more families engaged in employment, and yet reduced health care coverage for poor parents and children.

This paper was prepared for the Kaiser Commission on Medicaid and the Uninsured by Mark Greenberg, Center for Law and Social Policy. The author would like to thank the Kaiser Family Foundation for their support of this project and Cindy Mann, Jocelyn Guyer, and all state officials who reviewed and commented on this paper.

¹ A set of eligibility rules limited when and how long families could qualify for transitional Medicaid. Among the most significant, the family must have received AFDC for three of the last six months before exiting due to hours of employment, earnings, or loss of AFDC earnings disregards; and, in order to receive transitional Medicaid for the entire twelve months, the family would need to meet quarterly reporting requirements, maintain employment and have earnings not exceeding 185% of poverty. For a detailed discussion of transitional Medicaid rules under AFDC, see Greenberg, The JOBS Program: Answers and Questions (2nd ed., Center for Law and Social Policy, 1992), pp. 245-263.

² More precisely, the income and resource requirement is that the individual must meet the income and resource standards for determining AFDC eligibility under the State AFDC Plan in effect on July 16, 1996, using the income and resource methodologies under that plan. The family composition rules are the AFDC definition of “dependent child” and the AFDC listing of the relatives living with a dependent child who could qualify for assistance. As a practical matter, single parent families and two-parent families that met prior AFDC-UP or AFDC-Incapacity rules will meet the family composition rules States wishing to broaden the circumstances under which two-parent families meet the family composition rules may do so by modifying the definition of when a two-parent family is considered to be “unemployed.” See 63 Fed. Reg. 42270-75 (August 7, 1998).

³ The law allows a state to: lower its income standards, but not below the standards applicable under its AFDC state plan on May 1, 1988; increase its income or resource standards by an amount not exceeding the Consumer Price Index; use “less restrictive” income and resource methodologies than those used under the plan as of July 16, 1996; and if the state had had an AFDC waiver that had the effect of expanding Medicaid eligibility, the state may elect to continue that policy for Section 1931 purposes even after the time that the waiver would have expired.

⁴ See Peller and Shaner, Medicaid Eligibility Standards for Low-Income Families and Children: State Implementation of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (American Public Welfare Association, May 1998).

⁵ For example, a study of the caseload decline in Alabama concluded that the most important variable in explaining the decline was a reduction in the percentage of applications that were approved for assistance, with the percentage of approvals falling from 63% to 46% over an eighteen month period. Dawson, Demystifying the Caseload Reduction (Alabama Arise, 1997).

⁶ The HHS Temporary Assistance for Needy Families (TANF) Program First Annual Report to Congress (August 1998) reports that in recent years, the likelihood that an AFDC/TANF adult would be employed in the next year has increased. Of adults receiving AFDC in 1991, 18.8% were employed in March 1992; the share of previous-year recipients who were employed the next March increased each subsequent year, reaching 24.6% in 1996 and then increased to 31.5% in 1997.

⁷ Gallagher, et al., One Year After Federal Welfare Reform: A Description of State Temporary Assistance for Needy Families (TANF) Decisions as of October 1997 (Urban Institute, May 1998), p. V-6.

⁸ South Carolina Department of Social Services, Division of Program Quality Assurance, Survey of Former Family Independence Clients: Cases Closed During April through June 1997 (June 1998), p 11.

⁹ The South Carolina figures reported for this most recent period reflect an improvement in health care coverage as compared to earlier periods in which the same questions were asked. South Carolina’s survey is the third in a series of surveys looking at the circumstances of a sample of families after leaving cash assistance. In the first study (focusing on exiters from October-December 1996), 66% of children were covered by Medicaid and 81% had some form of coverage; in the second study (focusing on exiters from January-March 1997), 71% of children were covered by Medicaid and 81% had some form of coverage. As to adults, in the first study, 28% were covered by Medicaid and 47% had some form of coverage; in the second study, 27% were covered by Medicaid and 37% had some form of coverage. See South Carolina Department of Social Services, Division of Program Quality Assurance, Survey of Former Family Independence Clients: Cases Closed During October through December, 1996 (November 1997) and Survey of Former Family Independence Clients: Cases Closed During January through March 1997 (March 1998).

¹⁰ Bureau of Business and Economic Research, University of New Mexico, Survey of the New Mexico Closed-Case AFDC Recipients, July 1996 to June 1997 (September 1997).

¹¹ Fein, The Indiana Welfare Reform Evaluation: Who Is On and Who is Off? (Abt Associates, September 1997) at pp. 7-9.

¹² At the time of the survey, 64% of respondents not receiving TANF were working, and of those working 62% reported that they were in jobs offering health insurance. However, the survey does not indicate what share of families were actually receiving employment-based health insurance. Fein, The Indiana Welfare Reform Evaluation: Who Is On and Who is Off? (Abt Associates, September 1997) at pp. 7-9.

¹³ Management Reports and Data Analysis, DSHS Economic Services Administration, Washington’s TANF Single Parent Families Shortly After Welfare: Survey of Families Which Exited TANF between December 1997 and March 1998 (July 1998), supplemented by unpublished responses to survey questions.

¹⁴ Some part of the difference between these two figures may be attributable to the possibility that respondents gave different responses to different questions; some part may be attributable to the difference between coverage in current employment and coverage in employment at some point in the prior twelve months.

¹⁵ Management Reports and Data Analysis, DSHS Economic Services Administration, Washington’s TANF Single Parent Families Shortly After Welfare: Survey of Families Which Exited TANF between December 1997 and March 1998 (July 1998), supplemented by unpublished responses to survey questions.

¹⁶ Among those reporting being worse off, 49% reported no adult heath coverage, and 30% reported no child coverage. Among those reporting being about the same, 36% reported no adult health coverage and 21% reported no child coverage. Among those reporting being better off, 30% reported no adult health coverage and 16% reported no child coverage. Overall, 60% reported being better off, 22% reported being about the same, and 18% reported being worse off. Of those saying they were worse off 52% said they were likely to return to welfare within the next six months.

¹⁷ DSHS Economic Services Administration, A Baseline Analysis of TANF One-Parent Families: Findings from 1997 Client Survey (February 1998), at p.6.

¹⁸ DSHS Economic Services Administration, A Baseline Analysis of TANF One-Parent Families: Findings from 1997 Client Survey (February 1998), at p.6.

¹⁹ ancoske, Kemp and Lindhorts, Exiting Welfare: The Experiences of Families in Metro New Orleans (Welfare Reform Research Project, School of Social Work, Southern University at New Orleans, June 1998).

²⁰ Mancoske, Kemp and Lindhorts, Exiting Welfare: The Experiences of Families in Metro New Orleans (Welfare Reform Research Project, School of Social Work, Southern University at New Orleans, June 1998).

²¹ Pawasarat, Employment and Earnings of Milwaukee County Single Parent AFDC Families: Establishing Benchmarks for Measuring Employment Outcomes Under “W-2” (University of Wisconsin-Milwaukee, Employment and Training Institute).

²² Pawasarat, Employment and Earnings of Milwaukee County Single Parent AFDC Families: Establishing Benchmarks for Measuring Employment Outcomes Under “W-2” (University of Wisconsin-Milwaukee, Employment and Training Institute). The actual level of non-receipt may be somewhat higher because Medicaid status is not available for 20% of cases in which the family had ceased receiving AFDC and was still receiving Food Stamps. Also, note that the family was coded as receiving Medicaid if any family member received Medicaid.

²³ Summary of Surveys of Welfare Recipients Employed or Sanctioned for Noncompliance (March 1998) prepared for Tennessee Department of Human Services by Bureau of Business and Economic Research/Center for Manpower Studies, University of Tennessee, Memphis, Tennessee (March 1998).

²⁴ One additional state study of exiters, from Kentucky, found that almost half of children were reported to have no health care coverage, though the low survey response rate and possible ambiguities in the wording of questions make it difficult to be confident of the survey results. Cummings and Nelson, From Welfare to Work: Welfare Reform in Kentucky (Center for Policy Research and Evaluation, Urban Studies Institute, University of Louisville, January 1998). A telephone survey was conducted in December 1997 of former TANF recipients who had been discontinued between January and November 1997. The response rate was low: only 17% (560 respondents out of 3225 attempts). About half (49%) of respondents reported that they had left assistance because they got a job. The survey asked “Are your children covered by health insurance?” According to respondents, almost half (48%) of children were not covered by health insurance; 49.5% of children were covered. However, there may be some ambiguity as to whether respondents whose children were covered by Medicaid would answer yes to the question. Another question included Medicaid on the list in a question, “Do you currently receive any of the following benefits…?” Only 28.4% of respondents responded yes, but the question could have been interpreted as being directed only at the adult respondent.

²⁵ Executive Summary, The JOBS Evaluation: Early Findings on Program Impacts in Three Sites (U. S. Dept. Of Health and Human Services, 1995), Table ES-1. In sites emphasizing a “human capital development” approach, at the two-year point, the employment impacts were smaller and not statistically significant (35.1% of experimentals and 32.4% of controls were employed); there was also a small, and not statistically significant, difference in the percent covered by Medicaid or private health insurance in the prior month (79.2% of experimentals, 81.8% of controls. A subsequent report provides additional information on employment and other impacts in the JOBS evaluation sites, but the subsequent report does not provide further information on Medicaid/health coverage impacts. See Hamilton, et al., National Evaluation of Welfare-to-Work Strategies, Two-Year Findings on the Labor Force Attachment and Human Capital Development Programs in Three Sites (U.S. Department of Health and Human Services and U.S. Department of Education, December 1997).

²⁶ Kemple, Friedlander, and Fellerath, Florida’s Project Independence: Benefits, Costs, and Two-Year Impacts of Florida’s JOBS Program (Manpower Demonstration Research Corp., 1995), p. 106.

²⁷ Riccio, Friedlander, and Freedman, GAIN: Benefits, Costs, and Three-Year Impacts of a Welfare-to-Work Program (Manpower Demonstration Research Corporation, 1994), p.178.

²⁸ GAO/HEHS-97-74, Welfare Reform: States’ Early Experiences with Benefit Termination (May 1997), pp. 42-43.

²⁹ Fraker, Nixon, Losby, Prindle, and Else, Iowa’s Limited Benefit Plan (Mathematica Policy Research, May 1997), at p. 74. FIA describes the agreement between the individual and state specified goals, activities, and time frames for enacting these goals and the ultimate goal of self-sufficiency.

³⁰ Of the 36.4% who had had health insurance available in their most recent job, 10.^% received the insurance, 10.6% did not receive the insurance due to its costs; and 15.2% did not receive it for another reason. Fraker, Nixon, Losby, Prindle, and Else, Iowa’s Limited Benefit Plan (Mathematica Policy Research, May 1997), at p. 74.

³¹ Colville, Moore, Smith and Smucker, A Study of AFDC Case Closures Due to JOBS Sanctions, April 1996 AFDC Case Closures (Michigan Family Independence Agency, May 1997).

³² For example, Kentucky officials note that they recently conducted a review of all cases discontinued effective March 1998 for a reason that would result in transitional Medicaid eligibility; 706 cases were identified, and transitional Medicaid had been established in each case. The next month, 51 of those cases were identified as losing transitional Medicaid eligibility, and a review of a random sample of half of those cases found the terminations to be valid, with the most frequent reasons being recipient request for termination, recipient having moved out-of-state, and reinstatement of TANF eligibility.

³³ Born, Life After Welfare: Second Interim Report (School of Social Work, University of Maryland, March 1998)., pp. 18-19.

³⁴ See Children’s Loss of Medicaid Probed, Raleigh News & Observer, June 12, 1998.

³⁵ Ellwood and Ku, Welfare and Immigration Reforms: Unintended Side Effects for Medicaid (Health Affairs, May/June 1998, pp. 137, 141).

³⁶ See South Carolina Department of Social Services, Division of Program Quality Assurance, Survey of Former Family Independence Clients: Cases Closed During April through June 1997 (June 1998), p. 20.

³⁷ Most other states responding to a preliminary draft of this report also emphasized ongoing or newly initiated outreach efforts.

³⁸ Technically, the mechanism that a state could use would be to adopt a “less restrictive methodology” for calculating income eligibility for Section 1931-based Medicaid. A state wishing to ensure that low-wage working families retained Medicaid eligibility might provide, for example, that the first $500 (or some other figure) from earnings would not be counted in determining whether the family met the income standards applicable to Section 1931 eligibility. The practical effect of this less restrictive methodology would be a broadening of the circumstances where low-wage working families qualified for Section 1931 Medicaid. For a more detailed discussion of state options in expanding coverage through use of Section 1931, see Guyer and Mann, Taking the Next Step: States Can Now Expand Health Coverage to Low-Income Working Parents Through Medicaid (Center on Budget and Policy Priorities, July 1998), http://www.cbpp.org/702mcaid.html.

³⁹ For example, Washington State has implemented a more generous earned income disregard (50% of gross earnings), more liberal treatment of assets, and broader eligibility for two-parent families under TANF, and has extended those same standards to Section 1931 eligibility. Return to top

Policy Brief Part 1 Part 2Library Index

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