Report on Alternative Outcome Measures: Temporary Assistance for Needy Families (TANF) Block Grant . Medicaid/SCHIP Receipt


The Medicaid and State Children's Health Insurance Programs (SCHIP) are designed to provide health insurance to low-income individuals. Medicaid provides coverage to adults and children;(5)  SCHIP covers children. State performance in ensuring receipt of Medicaid/SCHIP by eligible individuals can be measured in several ways. These potential measures are parallel to those suggested for Food Stamps and include: (1) the percentage of individuals eligible for Medicaid/SCHIP that receive the benefit, (2) the percentage of poor children in working families who are receiving Medicaid/SCHIP, and (3) the percentage of former TANF recipients receiving Medicaid/SCHIP.

Under the TANF High Performance Bonus, beginning in FY 2002, a bonus will be provided to the three states with the highest rates of Medicaid/SCHIP enrollment for former TANF recipients and to the seven states with the greatest percentage point improvement. Specifically, the measure of state performance will be the percentage of leavers who are enrolled in Medicaid or SCHIP four months after leaving TANF (and who are not currently receiving TANF assistance in that month). The population will be limited to leavers who were enrolled in Medicaid or SCHIP at the time of case closure. Virtually all such individuals should still be eligible for Medicaid or SCHIP four months later.

Measurement issues. The measurement issues for these Medicaid/SCHIP performance measures are similar to those for Food Stamps discussed above. While the three proposed measures are similar in that they attempt to capture the proportion of poor individuals receiving Medicaid/SCHIP, they differ in their relationship to TANF. The first and second measures use a relatively broad population as the denominator - the eligible population and working families with children, respectively. Thus, these two measures will capture the overall effectiveness of the Medicaid/SCHIP programs in reaching their intended populations, as well as the effectiveness of the TANF program in ensuring that individuals who are diverted from or leave cash assistance receive Medicaid/SCHIP. The third measure may be better focused on directly measuring the outcomes of the TANF program, but it does not capture the extent to which those who are diverted from TANF on the front end receive Medicaid/SCHIP.

The Medicaid/SCHIP participation rate might vary substantially depending on whether it was measured for adult leavers or for their children, because eligibility is at the individual level, not for the whole family unit. Data from HHS-funded studies of families exiting welfare indicate that in some states children are substantially more likely than their parents to be enrolled in Medicaid. (In other states there was little difference between adult and child participation rates.)

Data issues. These measures would be calculated in similar ways to those described above for Food Stamps. Medicaid administrative data - primarily the Medicaid Standard Information System (MSIS) - would have to be used to calculate the numerator of the rates because the American Community Survey (ACS) does not collect data on participation in Medicaid or SCHIP. All states have developed or are in the process of developing the capability of reporting Medicaid and SCHIP enrollment data using MSIS. This enrollment data would be collected and reported by states electronically on a quarterly basis and would be available within a reasonable period after the end of a quarter. Like the Food Stamp measures, national survey data, preferably the ACS, could be used to calculate the denominator of the first two rates - the population eligible for Medicaid and working families with incomes below the poverty line. The third measure would be calculated by matching the administrative records of individuals leaving TANF assistance with Medicaid/SCHIP enrollment data maintained on MSIS.

Fairness issues. Unlike Food Stamps, where eligibility is set at the federal level, states have some discretion over Medicaid and SCHIP eligibility. This creates two types of issues. On the first measure - which examines the proportion of the eligible population that receives Medicaid/SCHIP - states have very different eligible populations. A state with a broad eligible population may have more difficulty performing well on this measure than a state that defines Medicaid eligibility more narrowly. On the other hand, the second measure - which examines the proportion of poor working families that receives Medicaid/SCHIP - states that provide coverage to a broader segment of the population will do better because of their current policies. While the goal of this measure may be to encourage states to expand the reach of these programs, states that have already done so would start out with an advantage on the absolute measure if bonuses or penalties are based on level of coverage, and with a disadvantage on a measure based on improvements in coverage. Similar to measures of Food Stamp participation, some have argued that these measures are not appropriate since state policymaking on health insurance coverage to a broader eligible population goes beyond the purview of the TANF program.

As discussed above, states with higher TANF benefit levels will probably fare better on the two population measures because many of their working poor families will be eligible for TANF as well as Medicaid and participation rates for Medicaid are higher when families are also participating in TANF. In addition, for the two population measures, state administrators may not have control over the size of the needy population in their state. States with a relatively larger population below the poverty line may have more difficulty succeeding on these types of measures compared to states with a relatively smaller poor population.