Welfare Leavers and Medicaid Dynamics: Five States in 1995. Executive Summary


State welfare caseloads have been declining at an unprecedented rate since 1994, partly as a result of state and federal welfare reform efforts and partly because of a strong economy. Medicaid enrollment for children and their parents has been shrinking as well (although less so than welfare), in spite of state efforts to expand their Medicaid eligibility policies. These declines in Medicaid enrollment were not expected, given the many ways family members can remain eligible for Medicaid after welfare (especially children). In addition, there has not been a decline in the number of uninsured.

This study analyzed the 1995 Medicaid enrollment patterns of children and their parents in five states--Alabama, California, Florida, Michigan and New Jersey--to increase our understanding of the enrollment interactions between welfare and Medicaid. Each of these states experienced a decline in their welfare caseloads during 1995. Using Medicaid administrative data, we explored the association of the welfare declines with overall Medicaid enrollment patterns. One part of the analysis focused on persons who left welfare during the year to see how many stayed on Medicaid. We also examined whether welfare leavers who stayed on Medicaid had different Medicaid expenditure patterns from those who left. A second part of the analysis looked at the dynamics of overall Medicaid enrollment during 1995, with a focus on the extent of turnover.

State Medicaid Research Files (SMRF) from the Health Care Financing Administration (HCFA(now known as CMS)) are the primary data source. For each state, these files include monthly eligibility information for all Medicaid enrollees during a calendar year, as well as information about individual expenditure levels.