Welfare Leavers and Medicaid Dynamics: Five States in 1995. Eligibility Policies of Study States in 1995


By 1995, interstate differences in Medicaid eligibility policy had been considerably reduced as a result of the federally mandated poverty-related expansions for children. That same year, all states were required to extend Medicaid coverage to children under age six and pregnant women with family income below 133 percent of the federal poverty level (FPL) and to children born after September 30, 1983, with family income below 100 percent FPL. The study states exceeded these federal requirements only with a few groups in 1995 (Table 2). Four of the states (California, Florida, Michigan, and New Jersey) used income thresholds ranging from 185 to 200 percent FPL for infants and pregnant women, and Michigan covered children ages 1 through 15 years to 150 percent FPL.

Nevertheless, there continued to be substantial variation among the study states with their AFDC and medically needy income levels, which in particular affected Medicaid eligibility for adults. California’s AFDC benefit levels were at 58 percent of FPL, among the highest in the United States. In contrast, the AFDC levels of Alabama and Florida at 15 to 29 percent of FPL were considerably less generous and well below the median state. Among the study states, Alabama did not have medically needy coverage in 1995, and New Jersey’s medically needy program was somewhat restrictive, since it covered children and pregnant women but no other parents. The medically needy income thresholds ranged from 29 to 78 percent FPL, with those of all the states but California below the median state.

All the states were required to extend up to 12 months of transitional Medicaid coverage to children and their parents if families were leaving welfare due to earnings. All the study states also used other more obscure, noncash eligibility groups to establish eligibility for Medicaid-only benefits for families not poor enough to qualify for welfare.2

  Alabama Arkansas California Florida Michigan New Jersey U.S.a
(Percentages of the Federal Poverty Level)
AFDC 15 19 58 29 45 41 36
Medicaid needy  -- 25 78 29 52 52 56
  Infants/pregnant women 133 133 200 185 185 185 133b
  Children ages 1-5 133 13 133 133 150 133 133b
  Children ages 6-12c 100 100 100 100 150 100 100b
  Children ages 13-18 None None None None 150d None None

Source:  MCH Update.  State Medicaid Coverage of Pregnant Women and Children: Summer 1995. 

Washington, D.C.: National Governors' Association.

aMedian state.

bMinimum federal requirements.

cChildren born after September 30, 1983, which, for most of 1995, covered children through age 12.

dChildren under age 15 in Michigan were covered to 150 percent FPL.

It is difficult to predict exactly which eligibility groups will be important to a state in extending Medicaid coverage. Children and other family members often can qualify under more than one Medicaid eligibility provision. Which provision is used may depend on numerous factors, including whether the family reported earnings, the level of family income, whether any family member had unusually high medical expenses, and the ages of the children in the family. Other factors include the extent of automation of eligibility determination in each state and the structure and internal logic of the automated system. For example, the systems in many states employ a hierarchical approach to eligibility determination, testing families for cash assistance and Medicaid first (using the lowest income thresholds) and poverty-related coverage last (using the highest income thresholds), with the other eligibility groups (such as transitional assistance and medically needy coverage) somewhere in between.