Welfare Leavers and Medicaid Dynamics: Five States in 1995. Previous Research


Concerns about Medicaid enrollment patterns are not new. Although Medicaid enrollment of children and their parents increased by just over 60 percent during the period from 1987 to 1995,

State Alabama Arkansas California Florida Michigan New Jerse
  Number of Recipients
Jan. 1993 141,746 73,982 2,415,121 701,842 686,356 349,902
Jan. 1994 135,096 70,563 2,621,383 689,135 672,760 334,780
Jan. 1995 121,837 65,325 2,692,202 657,313 612,224 321,151
Jan. 1996 108,269 59,223 2,648,772 575,553 535,704 293,833
  Percent Change from Previous Year
Jan. 1994 -4.7 -4.6 8.5 -1.8 -2.0 -4.3
Jan. 1995 -9.8 -7.4 2.7 -4.6 -9.0 -4.1
Jan. 1996 -11.1 -9.3 -1.6 -12.4 -12.5 -8.5

Source: U.S. Department of Health and Human Services, Administration for Children and Families.

1995 State Medicaid Research File data.

research during that period indicated that many seemingly eligible individuals were not enrolled in Medicaid, and that individuals were leaving Medicaid without insurance. Generally, lower participation rates were reported for persons eligible under the nonwelfare routes to Medicaid eligibility. For 1993, Dubay and Kenney (1996) estimated a participation rate of 69 percent for uninsured children who would qualify under the child poverty-related expansion provisions, compared to a 90 percent rate for children qualifying under the welfare-related rules. Ellwood and Adams (1990) found that the majority of cases leaving Aid to Families with Dependent Children (AFDC) in California and Georgia were not continuing on Medicaid, despite the availability of transitional coverage for families going from welfare to work. Short and Freedman (1998), using data from the 1990 panel of the Survey of Income and Program Participation (SIPP), found that two- thirds of mothers who left Medicaid became uninsured. Short and Freedman also reported that 10 percent of the Medicaid caseload they were studying turned over in a four-month period.

Studies using more recent data confirm the persistence of Medicaid enrollment problems and raise other concerns as well. Selden et al. (1998), using 1996 data from the Medical Expenditure Panel Survey, found that 4.7 million children in 1996 were uninsured despite being eligible for Medicaid. Using a national survey of welfare leavers from 1995 to 1997, Garrett and Holahan (2000 a and b) found that 44 percent of mothers and 30 percent of children who left welfare less than six months earlier were not enrolled in Medicaid. They also found that rates of uninsurance for families leaving welfare increased with the number of months since leaving welfare. Important to this study, a person’s health status, they found, was important in determining whether Medicaid coverage was maintained after leaving welfare. Women who had health conditions that limited their ability to work were more likely to stay on Medicaid after leaving welfare, compared to women without limiting health conditions. Results were similar, though weaker, for children. These findings are important because they suggest that welfare leavers remaining on Medicaid are likely to have greater health care needs and incur greater expenses than those who leave both welfare and Medicaid.

Theories abound as to why eligible families do not participate in Medicaid, including families who may have had some period of enrollment in the past. Focus groups and surveys have identified the following barriers to participation (Smith et al. 1998; Perry et al. 1998; and Shuptrine et al. 1998):

  • The stigma associated with welfare receipt extends to Medicaid as well, and keeps many families from applying for coverage or continuing on Medicaid once they are off welfare.
  • Many low-income people think Medicaid is for families on welfare, not working families.
  • Some people confuse the new rules associated with welfare reform with Medicaid rules, leading them to believe mistakenly that Medicaid is now time-limited, like welfare, or that Medicaid coverage (without welfare) counts as part of the new welfare lifetime limit, or that the welfare work requirements extend to Medicaid.
  • Immigrants, in particular, are worried that participation by any family member in Medicaid (even children who are citizens) may cause parents to be considered public charges and thus disqualify them from eventual citizenship.
  • Families who have been on welfare and Medicaid in the past say they dropped out because the eligibility process is burdensome and demeaning, or they were frustrated by the complexity of the rules.
  • Families say they are healthy, and they believe they can get Medicaid if they need it.

Thus, even when states make their Medicaid eligibility policies more generous, other barriers to participation may prevent the expansions from maintaining or increasing enrollment.