Simulation of Medicaid and SCHIP Eligibility: Implications of Findings From 10 States. Final Report.. 1. Earnings Disregards

08/16/2000

Earnings disregards are employed by most states and most programs that use a net income test. The exceptions in our sample are Colorado's Medicaid poverty expansion and S-SCHIP programs. Earnings disregards are frequently time sensitive--that is, the disregard becomes less generous over time--and the disregard can differ between applicants and recipients.9 Tables II.2 and II.3 show earnings disregards for applicants and recipients, respectively. Today, states have the option to continue using the old AFDC standard earnings disregard policies, or establish new disregards for their TANF and Medicaid programs which are at least as generous as the standards in place on July 16, 1996.10 Among all states, 42 have chosen to establish new earnings disregards for their TANF programs (ACF 1998). In our sample of 10 states, the 1931 Medicaid programs in Arkansas, Florida, and New York have adopted the new earnings disregards used by the state's TANF programs. Other 1931 Medicaid programs continue to use the old AFDC standard, such as the $90 disregard applied to each person with earnings.11 As a result, the disregard used by the state's TANF program may differ from the one used by the 1931 Medicaid program--examples include Alabama, Connecticut, and New Jersey. The Medicaid expansion programs (poverty and M-SCHIP) in our sample states continue to use the old AFDC standard earnings disregard when the program uses a net income test.

TABLE II.2
DESCRIPTION OF EARNINGS DISREGARDS FOR APPLICANTS

  Medicaid SCHIP Other
TANF 1931/AFDC Poverty Expansion M-SCHIP S-SCHIP
Alabama Othera AFDC Standard AFDC Standard AFDC Standard NA NA
Arkansas Otherb Otherb AFDC Standard AFDC Standard NA NA
California AFDC Standard AFDC Standard AFDC Standard AFDC Standard NA NA
Colorado AFDC Standard AFDC Standard NA NA NA NA
Connecticut AFDC Standard AFDC Standard AFDC Standard AFDC Standard AFDC Standard NA
Florida AFDC Standard AFDC Standard AFDC Standard AFDC Standard MediKids:
AFDC Standard
Healthy Kids: NA
NA
Massachusetts Otherc NA NA NA NA NA
Michigan AFDC Standard AFDC Standard AFDC Standard AFDC Standard AFDC Standard NA
New Jersey AFDC Standard AFDC Standard AFDC Standard AFDC Standard NA NA
New York AFDC Standard AFDC Standard AFDC Standard AFDC Standard NA NA
SOURCE: MPR State Income Eligibility Requirements Database.

NOTE:
NA = Not applicable
AFDC Standard: Disregard $90 of earned income.

aDisregard 100 percent of earnings for three months.
bDisregard 20 percent of earnings.
cDisregard $90 of earned income, if exempt. Disregard $120 of earned income for each person with earned income and 50 percent of the remainder, if not exempt.

TABLE II.3
DESCRIPTION OF EARNINGS DISREGARDS FOR RECIPIENTS

  Medicaid SCHIP Other
TANF 1931/AFDC Poverty Expansion M-SCHIP S-SCHIP
Alabama Othera AFDC Standard AFDC Standard AFDC Standard NA NA
Arkansas Otherb Otherb Otherc Otherc NA NA
California Otherd Othere Otherc Otherc NA NA
Colorado AFDC Standard Otherc NA NA NA NA
Connecticut Otherf AFDC Standard AFDC Standard AFDC Standard Otherg NA
Florida Otherh Otherh Otherc Otherc MediKids: Otherc Healthy Kids: NA NA
Massachusetts AFDC Standard NA NA NA NA NA
Michigan Otheri AFDC Standard AFDC Standard AFDC Standard AFDC Standard NA
New Jersey Otherj Otherc Otherc Otherc NA NA
New York Otherk Otherk AFDC Standard AFDC Standard NA NA
SOURCE: MPR State Income Eligibility Requirements Database.

NOTE: NA = Not applicable

AFDC Standards: Disregard $90 + $30 + 1/3 of the remainder of earned income for each person for the first four months. Disregard $90 + $30 of earned income for months 5 through 12. Disregard $90 of earned income for each person with earned income for month 13 and beyond.
aDisregard 100 percent of earnings for three months and disregard 20 percent of earnings for month 4 and beyond.
bDisregard 20 percent of earnings and 60 percent of the remainder.
cDisregard $90 of earned income for each person with earned income.
dDisregard first $225 of the family's disability-based income and earnings and disregard 50 percent of remaining earnings (not including disability-based income).
eDisregard first $240 from the earnings of the two highest earners and disregard first $120 from the earnings of all others. If it is a Sneede case, disregard first $240 from the earnings of each working family member, and disregard 50 percent of the remaining earnings.
fDisregard all earnings below the poverty level.
gDisregard up to 65 percent of the federal poverty level as long as income after disregard is above 235 percent of the federal poverty level.
hDisregard first $200 of earned income and 50 percent of the remainder.
iDisregard $200 and 20 percent of the remainder.
jDisregard 100 percent of the earnings for the first month and 50 percent thereafter.
kDisregard first $90 of earned income for each person with earned income and 45 percent of the remainder.