A Cross-State Examination of Families Leaving Welfare: Findings from the ASPE-Funded Leavers Studies. Medicaid and Health Insurance

08/01/2000

In contrast to the employment, earnings, and recidivism findings, which were fairly consistent across studies, rates of Medicaid enrollment for former AFDC/TANF recipients varied dramatically across grantees. Three months after exit, the Medicaid enrollment rate for the early cohorts of adult leavers across the nine studies that reported this measure ranged from 24 to 76 percent, with most studies reporting rates between 35 and 60 percent (see Table 5A.)

In the year after exit from AFDC/TANF, participation in Medicaid declined over time in some study areas, dropping by as much as 10 to 20 percentage points for adult leavers between the first and fourth quarters after exit. Rates remained relatively stable, however, in three of the studies. A substantially higher percentage of leavers were ever enrolled in Medicaid than were enrolled in each of the four quarters. In Arizona, for example, administrative data show that only about 50 percent of leavers were enrolled in Medicaid in any particular month, but 85 percent were enrolled at some point in the first year after exit.

Enrollment rates were even lower among "continuous leavers" that is, leavers who did not return to cash assistance (see Table 5B). In Illinois, for example, 29 percent of continuous leavers were enrolled in Medicaid four quarters after exit, as compared with 40 percent of all leavers. The main reason for lower enrollment among continuous leavers is that this subgroup excludes the leavers who return to TANF, most of whom are re-enrolled in Medicaid at the time of their return to cash assistance. In addition, it may be true that continuous leavers have better jobs and higher rates of private health insurance coverage than other leavers, but such information is not available through administrative data.

A more complete picture of health insurance coverage is provided through survey data. Data from four studies suggest that one-third to one-half of adult leavers (33 to 53 percent) were covered by Medicaid at the time of interview and one-fifth to one-third were covered by employer or other health insurance (20 to 34 percent), leaving one-third (26 to 41 percent) of former adult recipients without any health insurance (see Table 5C). Missouri leavers had the highest enrollment rates in employer and other health insurance (32 percent) and the lowest enrollment in Medicaid (33 percent). The other three states reported little difference in the percentage covered by employer or other non-Medicaid health insurance, and so the differences in uninsured rates were driven by the differences in Medicaid enrollment rates. There may be more variation in private insurance coverage patterns when data are available from more states.

As one would expect, the two states interviewing leavers six to eight months after exit found higher Medicaid enrollment rates (47 to 53 percent) than those interviewing leavers one to two years after exit (33 to 39 percent). Note that the states did not report private health insurance for the subgroup of continuous leavers, and so we do not know whether they were more likely to have private health insurance than other leavers.

Medicaid coverage for children of leavers was considerably higher than coverage for adults, according to survey data from four studies. Enrollment rates for children of leavers were from 6 to 35 percentage points higher than rates for adults in these four studies, with between one-half to two-thirds (51 to 68 percent) of leavers reporting Medicaid coverage for their children. (All four studies treated coverage under the State Children's Health Insurance Programs (SCHIP) as Medicaid coverage.) Administrative data on Medicaid enrollment rates for children of leavers did not show as clear a pattern, possibly because only three administrative studies reported rates for children and adults. One of these studies, Missouri, showed much higher coverage for children than for adults, consistent with survey data from the same state, but the other two sites (San Mateo and New York) showed surprisingly little difference between adults and children, at least according to the available administrative data shown in Table 5A.

About one-fifth (20 to 23 percent) of leavers reported that their children had health insurance coverage other than Medicaid. This was similar to the percentage of adults with such coverage, but the sponsorship of the coverage was different, at least according to data from two surveys. Children were somewhat less likely than adults to have such insurance in the form of employer-sponsored insurance, and more likely than adults to have it in the form of other insurance, including coverage through absent parents, the Indian Health Service, or other health plans. Finally, between 8 and 29 percent of leavers reported that their children had no health insurance. As the states' reports observed, this finding is troubling, given the fact that the vast majority of these children should be eligible for health insurance under expanded Medicaid coverage and/or the State Child Health Insurance Programs (SCHIP).

Although many of the surveys asked the leavers why they were not covered by Medicaid, it is very difficult to summarize these responses, because of differences in how the questions were phrased and the responses reported. For example, many surveys asked about the extent to which welfare agencies were informing families of their potential eligibility for Medicaid. In Arizona, slightly more than half (56 percent) of leavers said they received information from the agency that they might still be eligible for Medicaid (data not shown). In Illinois, only one third of those without any Medicaid coverage said they had received information from the welfare office about potential eligibility, but note that this percentage is just among those without Medicaid coverage, not among all leavers. The Washington survey did not ask about outreach specifically, but did report that more than three-fourths (78 percent) of leavers were aware of possible continued Medicaid after leaving welfare.

A comparison of survey and administrative data reveals some apparent discrepancies between respondent perceptions of their Medicaid coverage and the program records in the Medicaid computer systems. In Washington state, researchers analyzed administrative records of the survey respondents, and found that 61 percent were found in the Medicaid database, whereas only 53 percent had said they had Medicaid coverage. The Illinois report also found higher Medicaid enrollment rates from administrative records as compared with survey data. In Arizona, however, the rates were the same from the two data sources, as they were for children in Missouri. Differences in the visibility of state Medicaid programs, the interface in welfare and Medicaid computer systems, and the wording of the survey questions about Medicaid enrollment (6) might explain some of these cross-state differences.

Some of the differences across studies in reported Medicaid enrollment rates can be explained by methodological issues, including type of data (survey vs. administrative), unit of analysis (adult, child, or any member of household), time period (monthly vs. quarterly), and sub-population (all leavers vs. continuous leavers). In fact, New York reported four different Medicaid enrollment rates, ranging from 34 to 45 percent, to show the effects of differences in unit of analysis and time period, as shown in Table 5A. Such methodological issues, however, account for only some of the wide variation in Medicaid enrollment rates.

Many of the remaining differences are likely to be due to differences in TANF policies, Medicaid eligibility rules and application procedures, and the state and local administrative practices that come into play when families transition off of cash assistance. As these policies change over time, there may be changes in Medicaid enrollment rates. The data shown in Table 5D suggest some changes over time in Medicaid enrollment among leavers; the trend is different, however, in each of the three states reporting on early and late cohorts. Enrollment in Medicaid increased between early and late cohorts in Washington, but decreased in Arizona, with little apparent change in Illinois. Preliminary findings of low Medicaid enrollment rates among leavers have prompted Federal and state efforts to review Medicaid and TANF eligibility and enrollment systems and procedures to ensure that families are not incorrectly denied Medicaid benefits when they leave or are diverted from cash assistance . In fact, some states have mentioned in their leavers' reports that they have made changes in policies or administrative processes that should result in higher Medicaid enrollment rates among future cohorts of leavers.

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