The regulations governing eligibility for the Medicaid program are exceedingly complex. There are numerous routes by which a child may qualify for enrollment, and many of the eligibility provisions and parameters vary by state. Simply documenting the published eligibility criteria is a sizable chore, and operational aspects of the Medicaid eligibility determination--such as the definition and application of income disregards--may not be published or readily accessible. Relative to other means-tested programs, Medicaid presents a far greater challenge for simulation of program- eligibility--both in terms of the complexity of the rules and the data requirements that they generate. Even the most sophisticated simulation models of Medicaid eligibility employ many simplifications (see, for example, Giannarelli 1992). More typically, simulations of Medicaid eligibility are highly simplified. For example, the General Accounting Office has reported findings based on simulating only the federally mandated poverty-related expansions (U.S. GAO 1995). While this captures the majority of Medicaid-eligible children born after September 30, 1983 (because eligibility via cash assistance programs has lower income thresholds), it attributes no eligibility at all to older children.
The data requirements for a Medicaid eligibility simulation are substantial. Like most means-tested entitlement programs, eligibility determinations are based on monthly income, and countable income includes a number of potential disregards for which the source of income and various kinds of monthly expenditures may be relevant. Participation in certain programs makes families or children eligible for Medicaid, so data on program participation are needed. Because people who were eligible for AFDC were often eligible for Medicaid even if they did not participate in AFDC, the Medicaid eligibility determination incorporated the AFDC eligibility rules, and this has been extended in some form into the post-welfare reform era. To simulate AFDC and Medicaid eligibility it is necessary to construct several alternative family income measures, which must be compared to sets of state- specific parameters, which vary by family size. AFDC and some of the other Medicaid provisions are limited to particular types of families, creating a need for family demographic and economic data. In addition, the AFDC unit may be a subset of the entire co-resident family, and other aspects of the Medicaid eligibility determination may exclude some family members as well, so there is a need for additional family demographic data as well as the economic characteristics of family members. Furthermore, AFDC imposed a resources test and other components of the Medicaid program have resource limits as well, so a simulation must include measures of not only financial resources but vehicles as well. Finally, expenditures on health care are instrumental to the determination of eligibility under the medically needy provisions, so health care expenditure data are needed to fully simulate this component of the Medicaid program.