One weakness of the CPS is that the number of persons reporting Medicaid is lower than the number of persons enrolled in Medicaid in a given year according to administrative data from HCFA(now known as CMS) -- the agency that administers the Medicaid program. This problem is often referred to as "underreporting." Underreporting is thought to occur because survey respondents may not admit to being covered because of the stigma associated with public assistance programs, because they are not currently receiving health services, or because they may not realize they are covered by Medicaid.(6)
Most estimates of the number of uninsured use CPS data that are not first adjusted for Medicaid underreporting. This could lead to overestimates of the uninsured if many of those that appear uninsured are actually enrolled in Medicaid. It is important to recall, though, that CPS estimates of the uninsured are calculated as a residual and, therefore, accurate estimates rely on the accurate reporting of both Medicaid and private coverage. Unlike Medicaid, though, it is not known whether private insurance is reported accurately using the CPS.
The evidence for underreporting on the CPS is usually based on comparisons with HCFA(now known as CMS) administrative data, which show the number of persons ever enrolled in Medicaid during a given year. This comparison is valid if CPS health insurance questions are answered as intended -- that is, health insurance status during the previous year. However, if the CPS provides a point-in-time estimate, as many researchers believe it does, then comparing CPS Medicaid enrollment estimates with HCFA(now known as CMS) administrative data will tend to exaggerate the problem of Medicaid underreporting, since the number of Medicaid enrollees at a point in time will always be less than those ever enrolled during a year.(7) Comparisons with HCFA(now known as CMS) data will also be exaggerated because persons in institutions, who often receive Medicaid, are not within the sampling frame of the CPS. However, most institutionalized Medicaid enrollees are elderly (in nursing facilities), while the estimates of the uninsured in this paper focus on the nonelderly. Despite the definitional differences between HCFA(now known as CMS) and CPS data, the apparent underreporting of Medicaid on the CPS is probably too large to be explained by time-period and sample frame differences alone.
Holahan et al. (1995) estimated that, in 1990, 19.6 million nonelderly individuals were enrolled in Medicaid according to the CPS versus 24.7 million according to HCFA(now known as CMS) administrative data -- a 21 percent difference. To be comparable to the underreporting estimate of Holahan et al., underreporting should be calculated in relation to what HCFA(now known as CMS) refers to as "Medicaid eligibles," which is defined by HCFA(now known as CMS) as those ever enrolled during the year.(8) In 1993, 34.3 million nonelderly individuals were enrolled in Medicaid according to HCFA(now known as CMS), a 15.5 percent difference from the CPS estimate. As shown in the top panel of Table II.2, Medicaid underreporting then rose to 19.8 percent in 1994 and 21.0 percent in 1995 (Fronstin 1997b; HCFA(now known as CMS) 1996).
Medicaid underreporting for children age 0 to 17 follows the same general trend as that for all nonelderly individuals, although the underreporting rate is slightly higher. In 1995, for example, 16.5 million children were enrolled in Medicaid according to the CPS versus 21.4 million according to HCFA(now known as CMS) data -- 22.9 percent underreporting (bottom panel of Table II.2; Fronstin 1997a; HCFA(now known as CMS) 1996). Therefore, the underreporting of Medicaid among children could be as high as 4.9 million
children in 1995, suggesting that many of the 9.8 million children thought to be uninsured according to the CPS could actually be enrolled in Medicaid.(9) However, some of the Medicaid underreporting could be due to (1) children with both Medicaid and private coverage in the previous year reporting only private coverage, and (2) the CPS survey systematically failing to obtain interviews from population subgroups that may receive Medicaid disproportionately.
CPS AND HCFA(now known as CMS) ESTIMATES OF MEDICAID ENROLLMENT,
NONELDERLY AND CHILDREN, 1992 TO 1995
(Numbers in Millions)
|Nonelderly Enrollees (Age 0-64)|
|HCFA(now known as CMS)||31.4||34.3||35.8||36.7|
|Children Enrollees (Age 0-17)|
|HCFA(now known as CMS)||18.4||20.2||21.0||21.4|
|Source: CPS enrollment numbers from EBRI (1997a and 1997b)
HCFA(now known as CMS) enrollment numbers from 2082.
Notes: Child enrollees = number of children age 0-14 plus one-half of the children age 15-20.
HCFA(now known as CMS) data represent those ever enrolled during the year. CPS data are best interpreted as those enrolled at a point in time.
That the number of children with Medicaid fell from 1993 to 1994 in the CPS may be an artifact of the mid-decade shift in the sample framework for the CPS (Swartz, 1997).
Underreporting of Medicaid on the CPS may actually be worse than is indicated by the rates in Table II.2 because HCFA(now known as CMS) data sometimes underreport the number of Medicaid enrollees. A few states submit to HCFA(now known as CMS) only their data on recipients, or persons who receive services in a given year, rather than enrollees, or all persons who were enrolled during the year. This is evidenced by the fact that the number of enrollees is either zero or almost the same as the number of recipients. For example, the difference between the number of enrollees and the number of recipients is 3 percent or less in 1995 in the following states: Connecticut, District of Columbia, Hawaii, Louisiana, New York, and Tennessee.(10)
Overall, little research has been done on the problem of Medicaid underreporting and its effect on the estimates of the uninsured, partly because, until recently, HCFA(now known as CMS) Medicaid enrollment data were not considered reliable. Recent improvements to the HCFA(now known as CMS) data, though, make this type of research more feasible. Such research is warranted since studies on the characteristics of the uninsured will be affected to the extent that those who appear to be uninsured may actually be enrolled in Medicaid.