SECTION 15. OTHER PROGRAMS CONTENTS Overview Food Stamp Program Administration, Program Variations, and Funding Eligibility Benefits Quality Control (QC) Interaction with Cash Assistance Programs Recipiency Rates Legislative History Medicaid Eligibility Categorically Needy Aged and Disabled Persons The Medically Needy Medicaid and the Poor Services Financing Reimbursement Policy Administration Medicaid and Managed Care Legislative History Program Data Federal Housing Assistance Types of Assistance Trends in Commitments and Payments School Lunch and Breakfast Programs Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) Job Training Partnership Act Head Start Low-Income Home Energy Assistance Program (LIHEAP) Background Program Components Allotments to States Eligibility and Types of Assistance Planning and Administration Veterans Benefits and Services Workers' Compensation Overview Through 1993 Recent Developments in Employers' Costs and Benefit Payments References OVERVIEW A wide variety of Federal programs outside the jurisdiction of the Committee on Ways and Means provide benefits to individuals and families that also receive assistance from programs within the Committee's jurisdiction (see appendix K). This section describes several such programs: food stamps; Medicaid; housing assistance; School Lunch and Breakfast Programs; the Special Supplemental Food Program for Women, Infants, and Children (WIC); the Job Training Partnership Act; Head Start; the Low-Income Home Energy Assistance Program (LIHEAP); veterans benefits and services; and workers' compensation. Most families receiving Aid to Families with Dependent Children \1\ (AFDC) or Supplemental Security Income (SSI) would have incomes low enough to qualify them--or particular members of their families--for assistance under these programs. Unlike the principal assistance programs under the jurisdiction of the Committee on Ways and Means, participation in Head Start, LIHEAP, and other programs is limited by appropriations. Income received from AFDC is counted in determining eligibility and benefit levels for these programs. However, because these programs provide in-kind rather than cash assistance, benefits are not counted in determining eligibility for AFDC. --------------------------------------------------------------------------- \1\ AFDC was replaced by the Temporary Assistance for Needy Families Program by Public Law 104-193 in 1996 (see section 7). --------------------------------------------------------------------------- Tables 15-1 and 15-2 describe the overlap in recipients between programs within the jurisdiction of the Committee on Ways and Means and other major Federal assistance programs. Table 15-1 illustrates that 87.2 percent of AFDC recipient households also received food stamps during the first quarter of 1995; 24.7 percent received WIC; 97.2 percent received Medicaid; 63.1 percent received free or reduced-price school meals; and 31.1 percent received housing assistance. Table 15-2 presents the percentage of recipients of other means-tested programs who are participating in programs under Ways and Means jurisdiction. For example, 48.9 percent of food stamp households received AFDC benefits at some time during the first quarter of 1995; 27.6 percent received SSI; 25.6 percent received Social Security; 2.5 percent received unemployment benefits; and 22.5 percent received Medicare. Table 15-3 shows the percentage of households receiving AFDC or SSI and also receiving assistance from other programs for selected time periods. The figures at the bottom of the AFDC and SSI portions of the table show that the number of households receiving AFDC increased rapidly between 1990 and 1994 and then declined somewhat in 1995. The AFDC rolls increased by nearly one-third over the entire period. The number of households receiving SSI declined slightly in 1990 and 1993, but otherwise increased throughout the period between 1984 and 1995. The rolls increased by more than 50 percent over this period. TABLE 15-1.--PERCENT OF RECIPIENTS IN PROGRAMS WITHIN THE JURISDICTION OF THE COMMITTEE ON WAYS AND MEANS RECEIVING ASSISTANCE FROM OTHER MAJOR FEDERAL ASSISTANCE PROGRAMS, 1995 ---------------------------------------------------------------------------------------------------------------- Ways and Means assistance program ----------------------------------------------------- Other assistance program Social Unemployment AFDC SSI Security compensation Medicare ---------------------------------------------------------------------------------------------------------------- Food stamps............................................... 87.2 50.0 7.7 9.1 7.4 WIC....................................................... 24.7 5.6 1.0 4.4 0.6 Medicaid.................................................. 97.2 100.0 14.0 16.2 14.3 Free or reduced-price school meals........................ 63.1 25.2 4.0 16.5 2.6 Public or subsidized rental housing....................... 31.1 24.1 6.8 4.1 7.2 VA compensation or pensions............................... 0.8 3.6 5.3 1.7 5.6 Number of households receiving benefits (in thousands) 4,652 4,580 27,654 2,246 25,271 ---------------------------------------------------------------------------------------------------------------- Note.--Table shows number of households in the first quarter of 1995. Table reads that 87.2 percent of AFDC households also receive food stamps. SSI recipients living in California receive a higher SSI payment in lieu of food stamps, and thus are not included in the food stamp percentages. Source: U.S. Bureau of the Census. TABLE 15-2.--PERCENT OF RECIPIENTS IN OTHER MAJOR FEDERAL ASSISTANCE PROGRAMS RECEIVING ASSISTANCE UNDER PROGRAMS WITHIN THE JURISDICTION OF THE COMMITTEE ON WAYS AND MEANS, 1995 ---------------------------------------------------------------------------------------------------------------- Other assistance program ------------------------------------------------------------- Free or Public or Ways and Means assistance program Food reduced subsidized VA stamps WIC school rental Medicaid compensation meals housing or pensions ---------------------------------------------------------------------------------------------------------------- AFDC.............................................. 48.9 41.7 30.3 28.7 35.6 1.6 SSI............................................... 27.6 9.3 11.9 22.0 36.1 6.7 Social Security................................... 25.6 9.9 11.4 37.6 30.6 59.3 Unemployment compensation......................... 2.5 3.6 3.8 1.8 2.9 1.6 Medicare.......................................... 22.5 5.8 6.8 36.2 28.4 57.7 Number of households receiving benefits (in thousands)................................... 8,298 2,757 9,681 5,031 12,685 2,465 ---------------------------------------------------------------------------------------------------------------- Note.--Table shows households in the first quarter of 1995. Table reads that 48.9 percent of food stamp recipient households receive AFDC. SSI recipients living in California receive a higher SSI payment in lieu of food stamps, and thus are not included in the food stamp percentages. Source: U.S. Bureau of the Census. The percentage of AFDC and SSI households receiving other benefits fluctuated somewhat over the period, but the general trend was toward increased coverage for all benefits except VA compensation or pensions. The percentage of AFDC households receiving food stamps, for example, increased from 81 percent in 1984 to 87 percent in 1995; receipt of Medicaid over the same period increased from 93 to 97 percent of households. Similarly, the percentage of SSI households receiving food stamps increased from 46 to 50 percent while Medicaid coverage held at or very near 100 percent over the period. The percentage of AFDC and SSI households receiving WIC, school meals, and housing also increased over the period 1984-95. TABLE 15-3.--PERCENT OF HOUSEHOLDS RECEIVING AFDC OR SSI AND ALSO RECEIVING ASSISTANCE FROM OTHER PROGRAMS FOR SELECTED TIME PERIODS ---------------------------------------------------------------------------------------------------------------- Year Assistance program ------------------------------------------------------- 1984 1987 1990 1992 1993 1994 1995 ---------------------------------------------------------------------------------------------------------------- AFDC: Food stamps......................................... 81.4 81.7 82.7 86.2 88.9 88.3 87.2 WIC................................................. 15.3 18.6 18.7 21.5 18.5 21.4 24.7 Free or reduced-price school meals.................. 49.2 55.6 52.7 55.5 56.9 57.5 63.1 Public or subsidized rental housing................. 23.0 19.4 34.7 29.5 33.1 30.3 31.1 Medicaid............................................ 93.2 95.5 97.6 96.2 97.6 96.4 97.2 VA compensation or pensions......................... 2.8 1.9 1.3 1.9 1.1 1.1 0.8 Number of households receiving benefits (in thousands)..................................... 3,585 3,527 3,434 4,057 4,831 4,906 4,652 SSI: Food stamps......................................... 46.5 39.7 41.3 46.2 48.0 50.1 50.0 WIC................................................. 2.5 2.5 3.0 4.3 3.7 5.4 5.6 Free or reduced-price school meals.................. 12.7 11.9 15.3 18.2 21.3 23.8 25.2 Public or subsidized rental housing................. 21.6 20.0 21.4 23.8 23.9 24.9 24.1 Medicaid............................................ 100.0 99.6 99.7 99.8 99.5 100.0 100.0 VA compensation or pensions......................... 4.7 7.7 5.7 4.0 4.5 3.9 3.6 Number of households receiving benefits (in thousands)..................................... 3,008 3,341 3,037 3,957 3,861 4,223 4,580 ---------------------------------------------------------------------------------------------------------------- Note.--SSI recipients living in California receive a higher SSI payment in lieu of food stamps, and thus are not included in the food stamp percentages. Source: U.S. Bureau of the Census. FOOD STAMP PROGRAM Food stamps are designed primarily to increase the food purchasing power of eligible low-income households to a point where they can buy a nutritionally adequate low-cost diet. Participating households are expected to be able to devote 30 percent of their counted monthly cash income to food purchases.\2\ Food stamp benefits then make up the difference between the household's expected contribution to its food costs and an amount judged to be sufficient to buy an adequate low- cost diet. This amount, the maximum food stamp benefit, is set at the level of the U.S. Department of Agriculture's lowest cost food plan (the Thrifty Food Plan), varied by household size, and adjusted annually for inflation. Thus, a participating household with no counted cash income receives the maximum monthly allotment for its household size while a household with some counted income receives a lesser allotment, normally reduced from the maximum at the rate of 30 cents for each dollar of counted income. --------------------------------------------------------------------------- \2\ Because not all of a household's income is actually counted when determining its food stamp benefits, the program, in effect, assumes that most participants are able to spend about 20-25 percent of their total cash monthly income on food. --------------------------------------------------------------------------- Benefits are available to most households that meet Federal eligibility tests for limited monthly income and liquid assets. But household members must fulfill requirements related to work effort and, in general, must be U.S. citizens. Recipients in the two primary cash welfare programs (TANF and SSI) generally are automatically eligible for food stamps, as are recipients of State general assistance payments, if the household is composed entirely of TANF, SSI, or general assistance beneficiaries.\3\ --------------------------------------------------------------------------- \3\ Except for (1) SSI recipients in California, where a State- financed adjustment to SSI benefits has replaced food stamp assistance; and (2) general assistance programs that do not meet minimum Federal standards. --------------------------------------------------------------------------- Administration, Program Variations, and Funding The regular Food Stamp Program operates in all 50 States, the District of Columbia, Guam, and the Virgin Islands. The Federal Government is responsible for most of the rules that govern the program, and, with limited variations for Alaska, Hawaii, and the territories, these rules are nationally uniform. However, major 1996 revisions to the Food Stamp Act grant States a number of significant options to vary from Federal administrative and benefit calculation rules, especially for those who also are recipients of their State's cash welfare programs, and a number of waivers from regular rules and procedures have been (and continue to be) granted. Sales taxes on food stamp purchases may not be charged, and food stamp benefits do not affect other assistance available to low-income households, nor are they taxed as income. Alternative programs are offered in Puerto Rico, the Northern Mariana Islands, and American Samoa, and program variations occur in a number of demonstration projects and in those jurisdictions that have elected to exercise the limited number of program options allowed. Funding is overwhelmingly Federal, although the States and other jurisdictions have financial responsibility for significant administrative costs, as well as liability for erroneous benefit determinations (as assessed under the food stamp ``quality control'' system, discussed later). Federal administrative responsibilities At the Federal level, the program is administered by the Agriculture Department's Food and Consumer Service (FCS). The FCS gives direction to welfare agencies through Federal regulations that define eligibility requirements, benefit levels, and administrative rules. It is also responsible for arranging for printing food stamp coupons and distributing them to welfare agencies, for overseeing State programs for the electronic issuance of food stamp benefits, and for approving and overseeing participation by retail food stores and other outlets that may accept food stamps. Other Federal agencies that have administrative roles to play include: the Federal Reserve System (through which food stamp benefits are redeemed for cash, and which has some jurisdiction over ``electronic benefit transfer'' methods for issuing food stamp benefits), the Social Security Administration (responsible for providing the Social Security numbers recipients must have, for providing limited application ``intake'' services, and for providing information to verify recipients' income), the Internal Revenue Service (providing assistance in verifying recipients' income and assets), the Immigration and Naturalization Service (helping welfare offices confirm alien applicants' status), and the Secret Service and the Agriculture Department's Inspector General (responsible for counterfeiting and trafficking investigations). State and local administrative responsibilities States, the District of Columbia, Guam, and the Virgin Islands, through their local welfare offices, have primary responsibility for the day-to-day administration of the Food Stamp Program. They determine eligibility, calculate benefits, and issue food stamp allotments (using coupons or electronic benefit transfers) following Federal rules. They also have a significant voice in carrying out employment and training programs and in determining some administrative features of the program (e.g., the extent to which verification of household circumstances is pursued, the length of eligibility certification periods, the structure of electronic benefit transfer systems). Most often, the Food Stamp Program is operated through the same welfare agency and staff that runs the Federal/State TANF and Medicaid Programs. Puerto Rico, the Northern Mariana Islands, and American Samoa In addition to the regular Food Stamp Program, the Food Stamp Act directs funding for a Nutrition Assistance Program in the Commonwealth of Puerto Rico and another in American Samoa. Separate legislation authorizes a variant of the Food Stamp Program in the Commonwealth of the Northern Mariana Islands. Since July 1982, Puerto Rico has operated a Nutrition Assistance Program of its own design, funded by an annual Federal ``block grant.'' \4\ The Commonwealth's Nutrition Assistance Program differs from the regular Food Stamp Program primarily in that: (1) funding is limited to an annual amount specified by law \5\; (2) the Food Stamp Act allows the Commonwealth a great deal of flexibility in program design, as opposed to the regular program's extensive Federal rules (e.g., benefits are paid in cash (checks) rather than food stamp coupons); (3) income and liquid assets eligibility limits are about half those used in the regular Food Stamp Program; (4) maximum benefit levels are about one-quarter less than in the 48 contiguous States and the District of Columbia; and (5) different rules are used in counting income for eligibility and benefit purposes. In fiscal year 1996, Puerto Rico's Nutrition Assistance Program aided approximately 1.3 million persons each month with monthly benefits averaging $67 a person ($186 a household). --------------------------------------------------------------------------- \4\ Prior to July 1982, the regular Food Stamp Program operated in Puerto Rico, although with slightly different eligibility and benefit rules. \5\ For fiscal years 1997 and 1998, $1.174 billion and $1.204 billion are earmarked. The block grant funds the full cost of benefits and half the cost of administration. --------------------------------------------------------------------------- Under the terms of the 1976 Covenant with the Commonwealth of the Northern Mariana Islands and implementing legislation (Public Law 96-597), a variant of the Food Stamp Program was negotiated with the Commonwealth and began operations in July 1982. The program in the Northern Marianas differs primarily in that: (1) it is funded entirely by Federal money, up to a maximum grant of $5.1 million a year; (2) a portion of each household's food stamp benefit must be used to purchase locally produced food; (3) maximum allotments are about 20 percent higher than in the 48 contiguous States and the District of Columbia; and (4) income eligibility limits are about half those in the regular program. As of the end of fiscal year 1996, the Northern Marianas' program assisted almost 4,000 people each month with monthly benefits averaging $75 a person (also see chapter 12). As with the Northern Marianas, American Samoa operates a variant of the regular Food Stamp Program. Under the Secretary of Agriculture's authority to extend Agriculture Department programs to American Samoa (Public Law 96-597) and a 1996 amendment to the Food Stamp Act made by the Federal Agriculture Improvement and Reform Act (Public Law 104-127), American Samoa receives an annual grant of up to $5.3 million to operate a Food Stamp Program limited to low-income elderly and disabled persons. As of the end of fiscal year 1996, the program aided about 3,000 persons a month with average monthly benefits of just over $100 a person (also see chapter 12). Program options The Food Stamp Act authorizes demonstration projects to test program variations that might improve operations. At present, three major types of demonstration projects are underway: (1) a limited number of projects that ``cash out'' food stamp benefits (these projects cash out food stamps for the elderly and SSI recipients, very poor households that are eligible for expedited service, and some households that are part of State welfare reform efforts); (2) welfare reform demonstrations in which food stamp rules are changed to support TANF reform efforts (e.g., food stamps are used as a wage supplement or cashed out; food stamps are consolidated with TANF benefits; food stamp income and asset rules are changed to encourage employment); and (3) a project granting quarterly (instead of monthly) benefit payments to SSI recipients eligible for very small benefits. In addition to demonstration projects, States are allowed to implement some optional aspects of the Food Stamp Program. States may require ``monthly reporting'' and ``retrospective budgeting'' for parts of their food stamp caseload. They may issue benefits (at their own cost) to ineligible noncitizens and those ineligible under the new work rule for able-bodied adults without children (discussed later). With 50-percent Federal cost sharing, they can operate ``outreach'' programs to inform low-income persons about food stamps and support nutrition education efforts. They may choose to issue food stamp benefits through electronic benefit transfer systems. They may choose to operate a ``simplified'' program under which they can use many of their TANF rules and procedures when determining food stamp benefits for TANF recipients. They largely determine the length of eligibility certification periods. They may sanction food stamp recipients failing to meet other public asssistance program rules or failing to cooperate in child support enforcement. They may, to a certain extent, waive the application of the new work rule for able- bodied adults without dependents (discussed later); and they may choose to disqualify an entire household if the head of household fails to fulfill work-related requirements. They may include the cash value of food stamp benefits when using welfare to subsidize some recipients' wages and can pay food stamp benefits in cash to other working households getting off cash welfare. Finally, States and localities may opt to run ``workfare'' programs, and States determine the type(s) of employment or training programs in which recipients must participate. Funding The Food Stamp Act provides 100 percent Federal funding of food stamp benefits, except where States choose to ``buy into'' the program and pay for issuing food stamp benefits to ineligible noncitizens or those made ineligible by the new work rule for able-bodied adults without dependents (discussed later). The Federal Government also is responsible for its own administrative costs: overseeing program operations (including oversight of participating food establishments), printing and distributing food stamp coupons to welfare agencies, redeeming food stamp benefits through the Federal Reserve, and paying the Social Security Administration for certain intake services. In most instances, the Federal Government provides half the cost of State welfare agency administration.\6\ However, the 50-percent Federal share can be increased to as much as 60 percent if the State has a very low rate of erroneous benefit determinations. In addition, the Federal Government shares the cost of carrying out employment and training programs for food stamp recipients: (1) each State receives a Federal grant for basic operating costs (a formula share of $79 million in fiscal year 1997, rising to $212 in fiscal year 1998, and slightly larger amounts in later years); and (2) additional operating costs, as well as expenses for support services to participants (e.g., transportation, child care) are eligible for a 50- percent Federal match.\7\ Finally, States are allowed to retain a portion of improperly issued benefits they recover (other than those caused by welfare agency error): 35 percent of recoveries in fraud cases and 20 percent in other circumstances. The growth in Federal and State Food Stamp Act spending since 1979 is shown in table 15-4. --------------------------------------------------------------------------- \6\ Until April 1994, the cost of certain activities was matched at more than the 50-percent rate: costs associated with the development of computer capability and fraud control activities were eligible for 63 and 75 percent Federal sharing, respectively; costs for implementing the Systematic Alien Verification for Entitlements (SAVE) Program were fully reimbursed by the Federal Government. \7\ The overwhelming majority (80 percent) of the formula grant funds must be spent on services to those covered by a new work requirement for able-bodied adults without dependents (see later discussion of work requirements). TABLE 15-4.--RECENT FOOD STAMP ACT EXPENDITURES [In millions of dollars] ------------------------------------------------------------------------ Administration \2\ -------------------- Fiscal year Benefits \1\ State Total (Federal) Federal and local ------------------------------------------------------------------------ 1979......................... $6,480 $515 $388 $7,383 1980......................... 8,685 503 375 9,563 1981......................... 10,630 678 504 11,812 1982......................... 10,408 709 557 11,674 1983......................... 11,955 778 612 13,345 1984......................... 11,499 971 805 13,275 1985......................... 11,556 1,043 871 13,470 1986......................... 11,415 1,113 935 13,463 1987......................... 11,344 1,195 996 13,535 1988......................... 11,999 1,290 1,080 14,369 1989......................... 12,483 1,332 1,101 14,916 1990......................... 15,090 1,422 1,174 17,686 1991......................... 18,249 1,516 1,247 21,012 1992......................... 21,883 1,656 1,375 24,914 1993......................... 23,033 1,716 1,572 26,321 1994......................... 23,736 1,789 1,643 27,168 1995......................... 23,759 1,917 1,748 27,424 1996......................... 23,510 1,984 1,842 27,336 ------------------------------------------------------------------------ \1\ All benefit costs associated with the Food Stamp Program and Puerto Rico's block grant are included. The benefit amounts shown in the table reflect small downward adjustments for overpayments collected from recipients and, beginning in 1989, issued but unredeemed benefits. Over time, the figures reflect both changes in benefit levels and numbers of recipients. \2\ All Federal administrative costs associated with the Food Stamp Program and Puerto Rico's block grant are included: Federal matching for the various administrative and employment and training expenses of States and other jurisdictions, and direct Federal administrative costs. Figures for Federal administrative costs beginning with fiscal year 1989 include only those paid out of food stamp appropriation and the food stamp portion of the general appropriation for food program administration. Figures for earlier years include estimates of food stamp related Federal administrative expenses paid out of other Agriculture Department accounts. State and local costs are estimated based on the known Federal shares and represent an estimate of all administrative expenses of participating States and other jurisdictions (including Puerto Rico). Source: U.S Department of Agriculture budget justification materials for fiscal years 1981-98. Compiled by the Congressional Research Service. Eligibility The Food Stamp Program has financial, employment/training- related, and ``categorical'' tests for eligibility. Its financial tests require that most of those eligible have monthly income and liquid assets below limits set by food stamp law. Under the employment/training-related tests, certain household members must register for work, accept suitable job offers, and fulfill work or training requirements (such as looking or training for a job) established by State welfare agencies. And, under a new work requirement established in 1996 law, food stamp eligibility for able-bodied adults without dependents is limited to 3-6 months in any 36-month period unless they are working at least half time or in a work or training activity. Categorical eligibility rules make some automatically eligible for food stamps (many TANF, SSI, and general assistance recipients), and categorically deny eligibility to others (e.g., strikers and most noncitizens, postsecondary students, and people living in institutional settings). Applications cannot be denied because of the length of a household's residence in a welfare agency's jurisdiction or because the household has no fixed mailing address or does not reside in a permanent dwelling. The food stamp household The basic food stamp beneficiary unit is the ``household.'' A food stamp household can be either a person living alone or a group of individuals living together; there is no requirement for cooking facilities. The food stamp household is unrelated to recipient units in other welfare programs (e.g., TANF families with dependent children, elderly or disabled individuals or couples in the SSI Program). Generally speaking, individuals living together constitute a single food stamp household if they customarily purchase food and prepare meals in common. Members of the same household must apply together, and their income, expenses, and assets normally are aggregated in determining food stamp eligibility and benefits. However, persons who live together can sometimes be considered separate ``households'' for food stamp purposes, related coresidents generally are required to apply together, and special rules apply to those living in institutional settings. Most often, persons living together receive larger aggregate benefits if they are treated as more than one food stamp household. Persons who live together, but purchase food and prepare meals separately, may apply for food stamps separately, except for: (1) spouses; (2) parents and their children (21 years or younger), and (3) minors 18 years or younger (excluding foster children, who may be treated separately) who live under the parental control of a caretaker. In addition, persons 60 years or older who live with others and cannot purchase food and prepare meals separately because of a substantial disability may apply separately from their coresidents as long as their coresidents' income is below prescribed limits. Although those living in institutional settings generally are barred from food stamps, individuals in certain types of group living arrangements may be eligible and are automatically treated as separate households, regardless of how food is purchased and meals are prepared. These arrangements must be approved by State or local agencies and include: residential drug addict or alcoholic treatment programs, small group homes for the disabled, shelters for battered women and children, and shelters for the homeless. Thus, different food stamp households can live together, food stamp recipients can reside with nonrecipients, and food stamp households themselves may be ``mixed'' (include recipients and nonrecipients of other welfare benefits). Income eligibility Except for households composed entirely of TANF, SSI, or general assistance recipients (who generally are automatically eligible for food stamps), monthly cash income is the primary food stamp eligibility determinant.\8\ In establishing eligibility for households without an elderly or disabled member,\9\ the Food Stamp Program uses both the household's basic (or ``gross'') monthly income and its counted (or ``net'') monthly income. When judging eligibility for households with elderly or disabled members, only the household's counted monthly income is considered; in effect, this procedure applies a more liberal income test to elderly and disabled households. --------------------------------------------------------------------------- \8\ Although they do not have to meet food stamp income and assets tests, TANF, SSI, and general assistance households must still have their income calculated under food stamp rules to determine their food stamp benefits. \9\ In the Food Stamp Program, ``elderly'' persons are those 60 years or older. The ``disabled'' generally are beneficiaries of governmental disability-based payments (e.g., Social Security or SSI disability recipients, disabled veterans, certain disability retirement annuitants, and recipients of disability-based Medicaid or general assistance). --------------------------------------------------------------------------- Basic (or gross) monthly income includes all of a household's cash income except the following ``exclusions'' (disregards): (1) most payments made to third parties (rather than directly to the household); (2) unanticipated, irregular, or infrequent income, up to $30 a quarter; (3) loans (deferred repayment student loans are treated as student aid, see below); (4) income received for the care of someone outside the household; (5) nonrecurring lump-sum payments such as income tax refunds and retroactive lump-sum Social Security payments (these are instead counted as liquid assets); (6) Federal energy assistance; (7) expense reimbursements that are not a ``gain or benefit'' to the household; (8) income earned by schoolchildren 17 or younger; (9) the cost of producing self- employment income; (10) Federal postsecondary student aid (e.g., Pell grants, student loans); (11) advance payments of Federal earned income credits; (12) ``on-the-job'' training earnings of dependent children under 19 in Job Training Partnership Act (JTPA) Programs, as well as JTPA monthly ``allowances''; (13) income set aside by disabled SSI recipients under an approved ``plan to achieve self- sufficiency'' (PASS); and (14) payments required to be disregarded by provisions of Federal law outside the Food Stamp Act (e.g., various payments under laws relating to Indians, payments under the Older Americans Act Employment Program for the Elderly). Counted (or net) monthly income is computed by subtracting certain ``deductions'' from a household's basic (or gross) monthly income. This procedure is based on the recognition that not all of a household's income is equally available for food purchases. Thus, a standard portion of income, plus amounts representing work expenses or excessively high nonfood living expenses, are disregarded. For households without an elderly or disabled member, counted monthly income equals their gross monthly income less the following deductions: --A standard deduction set at $134 a month, regardless of household size; different standard deductions are used for Alaska ($229), Hawaii ($189), Guam ($269), and the Virgin Islands ($118). --Any amounts paid as legally obligated child support; --Twenty percent of any earned income, in recognition of taxes and work expenses; --Out-of-pocket dependent care expenses, when related to work or training, up to $175 a month per dependent, $200 a month for children under age 2; --Shelter expenses that exceed 50 percent of counted income after all other deductions, up to a periodically adjusted ceiling now standing at $250 a month. Different ceilings prevail in Alaska, Hawaii, Guam, and the Virgin Islands: $434, $357, $304, and $184, respectively. For households with an elderly or disabled member, counted monthly income equals gross monthly income less the following deductions: --The same standard, child support, earned income, and dependent care deductions noted above; --Any shelter expenses, to the extent they exceed 50 percent of counted income after all other deductions, with no limit; and --Any out-of-pocket medical expenses (other than those for special diets) that are incurred by an elderly or disabled household member, to the extent they exceed a ``threshold'' of $35 a month. Except for those households comprised entirely of TANF, SSI, or general assistance recipients, in which case food stamp eligibility generally is automatic, all households must have net monthly income that does not exceed the Federal poverty guidelines, as adjusted for inflation each October. Households without an elderly or disabled member also must have gross monthly income that does not exceed 130 percent of the inflation-adjusted Federal poverty guidelines. Both these income eligibility limits are uniform for the 48 contiguous States, the District of Columbia, Guam, and the Virgin Islands; somewhat higher limits (based on higher poverty guidelines) are applied in Alaska and Hawaii. The net and gross eligibility limits on income are summarized in table 15-5. Allowable assets Except for households automatically eligible for food stamps because they are composed entirely of TANF, SSI, or general assistance recipients, eligible households must have counted or liquid assets that do not exceed federally prescribed limits. Households without an elderly member cannot have counted liquid assets above $2,000. Households with an elderly member cannot have counted liquid assets above $3,000. TABLE 15-5.--COUNTED (NET) AND BASIC (GROSS) MONTHLY INCOME ELIGIBILITY LIMITS FOR THE FOOD STAMP PROGRAM, FISCAL YEAR 1998 ------------------------------------------------------------------------ 48 States, the District of Household size Columbia, and Alaska Hawaii the territories ------------------------------------------------------------------------ Counted (net) monthly income eligibility limits \1\: 1 person...................... $658 $823 $756 2 persons..................... 885 1,106 1,017 3 persons..................... 1,111 1,390 1,278 4 persons..................... 1,338 1,673 1,539 5 persons..................... 1,565 1,956 1,800 6 persons..................... 1,791 2,240 2,060 7 persons..................... 2,018 2,523 2,321 8 persons..................... 2,245 2,806 2,582 Each additional person........ +227 +284 +261 Basic (gross) monthly income eligibility limits \2\: 1 person...................... 855 1,070 983 2 persons..................... 1,150 1,438 1,322 3 persons..................... 1,445 1,806 1,661 4 persons..................... 1,739 2,175 2,000 5 persons..................... 2,034 2,543 2,339 6 persons..................... 2,329 2,911 2,678 7 persons..................... 2,623 3,280 3,018 8 persons.................... 2,918 3,648 3,357 Each additional person....... +295 +369 +340 ------------------------------------------------------------------------ \1\ Set at the applicable Federal poverty guidelines, updated for inflation through calendar 1996. \2\ Set at 130 percent of the applicable Federal poverty guidelines, updated for inflation through calendar 1996. Source: U.S. Department of Agriculture, Food and Consumer Service. Counted liquid assets include cash on hand, checking and savings accounts, savings certificates, stocks and bonds, individual retirement accounts (IRAs) and ``Keogh'' plans (less any early withdrawal penalties), and nonrecurring lump-sum payments such as insurance settlements. Certain ``less liquid'' assets are also counted: a portion of the value of vehicles (generally, the fair market value in excess of $4,650) and the equity value of property not producing income consistent with its value (e.g., recreational property). Counted assets do not include the value of the household's residence (home and surrounding property), business assets, personal property (household goods and personal effects), lump- sum earned income tax credit payments, burial plots, the cash value of life insurance policies and pension plans (other than Keogh plans and IRAs), and certain other resources whose value is not accessible to the household or are required to be disregarded by other Federal laws. Work-related requirements Unless exempt, most able-bodied adults must (to gain or retain eligibility) (1) register for work (typically with the welfare agency or a State employment service office), (2) accept a suitable job if offered one, (3) fulfill any work, job search, or training requirements established by administering welfare agencies, (4) provide the administering welfare agency with sufficient information to allow a determination with respect to their job availability, and (5) not voluntarily quit a job without good cause or reduce work effort below 30 hours a week. If the household head fails to fulfill any of these requirements, the entire household may, at State option, be disqualified for up to 180 days. Individual disqualification periods differ according to whether the violation is the first, second, or third; minimum periods (which may be increased by the State welfare agency) range from 1 to 6 months. Those who are exempt by law from these basic work requirements include: persons physically or mentally unfit for work, those under age 16 or over age 59, and individuals between 16 and 18 if they are not head of household or are attending school or a training program; persons working at least 30 hours a week or earning the minimum wage equivalent; persons caring for dependents who are disabled or under age 6, and those caring for children between ages 6 and 12 if adequate child care is not available (this second exemption is limited to allowing these persons to refuse a job offer if care is not available); individuals already subject to and complying with another assistance program's work, training, or job search requirements; otherwise eligible postsecondary students; and residents of drug addiction and alcoholic treatment programs. Those not exempted by one of the above-listed rules must, at least, register for work and accept suitable job offers. However, their State welfare agency may require them to fulfill some type of work, job search, or training obligation. Welfare agencies must operate an employment and training program of their own design for work registrants whom they designate. Welfare agencies may require all work registrants to participate in one or more components of their program, or limit participation by further exempting additional categories and individuals for whom participation is judged impracticable or not cost effective. Program components can include any or all of the following activities: supervised job search or training for job search, workfare, work experience or training programs, education programs to improve basic skills, or any other employment or training activity approved by the Agriculture Department. However, at least 80 percent of unmatched Federal money provided for States' employment and training programs must be spent on services to those covered by the new work rule for able-bodied adults without dependents (see below). In fiscal year 1996, there were some 5.5 million work registrants, of whom 40 percent were exempted from employment and training program participation requirements. Of the remainder, about 1.5 million persons participated in some employment activity and almost 600,000 received ``notices of adverse action'' because they failed to meet participation requirements. The overwhelming majority of those fulfilling an employment activity requirement participated in work or job search or job search training (as opposed to education or other training). Recipients who take part in an employment or training activity beyond work registration cannot be required to work more than the minimum wage equivalent of their household's benefit, and total hours of participation (including both work and any other required activity) cannot exceed 120 hours a month. Welfare agencies also must provide participants support for costs directly related to participation (e.g., transportation and child care). Agencies may limit this support to $25 per participant per month for all support costs other than dependent care, and to local market rates for necessary dependent care. In addition to the above-noted work-related requirements (e.g., work registration, participation in an employment and training program if called on, a ban on voluntarily quitting a job), the 1996 welfare reform law (the Personal Responsibility and Work Opportunity Reconciliation Act) added a new work requirement for most able-bodied adults (between 18 and 50) without dependents. They are ineligible for food stamps if, during the prior 36 months, they received food stamps for 3 months while not working at least 20 hours a week or participating in an approved work/training activity (including workfare). Those disqualified under this rule are able to reenter the Food Stamp Program if, during a 30-day period, they work 80 hours or more or participate in a work/training activity. If they then become unemployed or leave work/ training, they are eligible for an additional 3-month period on food stamps without working at least 20 hours a week or participating in a work/training activity. But they are allowed only one of these added 3-month eligibility periods in any 36 months for a potential total of 6 months on food stamps in any 36 months without half-time work or enrollment in a work/ training program. At State request, this rule can be waived for areas with very high unemployment (over 10 percent) or lack of available jobs. Moreover, States may, on their own initiative, exempt up to 15 percent of those covered under the new work rule. Categorical eligibility rules and other limitations Some rules deny food stamp eligibility for reasons other than financial need or compliance with work-related requirements. Most noncitizens are barred (other than refugees and asylees for a limited period of time, veterans, and those with a substantial history of work covered under the Social Security system). Households with members on strike are denied benefits unless eligible prior to the strike. With some exceptions, postsecondary students (in school half time or more) who are fit for work and between ages 18 and 50 are ineligible. Persons living in institutional settings are denied eligibility, except those in special SSI-approved small group homes for the disabled, persons living in drug addiction or alcohol treatment programs, and persons in shelters for battered women and children or shelters for the homeless. Boarders cannot receive food stamps unless they apply together with the household in which they are boarding. Those who transfer assets for the purpose of qualifying for food stamps are barred. Persons who fail to provide Social Security numbers or cooperate in providing information needed to verify eligibility or benefit determinations are ineligible. Food stamps are denied those who intentionally violate program rules, for specific time periods ranging from 1 year (on a first violation) to permanently (on a third violation or other serious infraction); and States may impose food stamp disqualification when an individual is disqualified from another public assistance program. Automatic disqualification is required for those applying in multiple jurisdictions, fleeing arrest, or convicted of a drug-related felony. And States may disqualify individuals not cooperating with child support enforcement authorities or in arrears on their child support obligations. Benefits Food stamp benefits are a function of a household's size, its net monthly income, and maximum monthly benefit levels (in some cases, adjusted for geographic location). An eligible household's net income is determined (i.e., deductions are subtracted from gross income), its maximum benefit level is established, and a benefit is calculated by subtracting its expected contribution (30 percent of its counted net income) from its maximum allotment. Thus, a 3-person household with $400 in counted net income (after deductions) would receive a monthly allotment of $201 (the maximum 3-person benefit in the 48 States, $321, less 30 percent of net income, $120). Allotments are not taxable and food stamp purchases may not be charged sales taxes. Receipt of food stamps does not affect eligibility for or benefits provided by other welfare programs, although some programs use food stamp participation as a ``trigger'' for eligibility and others take into account the general availability of food stamps in deciding what level of benefits to provide. In fiscal year 1996, monthly benefits averaged $73 a person and about $183 a household. Maximum monthly allotments Maximum monthly food stamp allotments are tied to the cost of purchasing a nutritionally adequate low-cost diet, as measured by the Agriculture Department's Thrifty Food Plan (TFP). Maximum allotments are set at: the monthly cost of the TFP for a four-person family consisting of a couple between ages 20 and 50 and two school-age children, adjusted for family size (using a formula reflecting economies of scale developed by the Human Nutrition Information Service), and rounded down to the nearest whole dollar. Allotments are adjusted for food price inflation annually, each October, to reflect the cost of the TFP in the immediately previous June. Maximum allotments are standard in the 48 contiguous States and the District of Columbia; they are higher, reflecting substantially different food costs, in Alaska, Hawaii, Guam, and the Virgin Islands (table 15-6). Minimum and prorated benefits Eligible one- and two-person households are guaranteed a minimum monthly food stamp allotment of $10. Minimum monthly benefits for other household sizes vary from year to year, depending on the relationship between changes in the income eligibility limits and the adjustments to the cost of the TFP. In a few cases, benefits can be reduced to zero before income eligibility limits are exceeded. At present, minimum monthly allotments for households of three or more persons range from $2 to over $80. In addition, a household's calculated monthly allotment can be prorated (reduced) for 1 month. On application, a household's first month's benefit is reduced to reflect the date of application. If a previously participating household does not meet eligibility recertification requirements in a timely fashion, but does become certified for eligibility subsequently, benefits for the first month of its new certification period normally are prorated to reflect the date when recertification requirements were met. TABLE 15-6.--MAXIMUM MONTHLY FOOD STAMP ALLOTMENTS, FISCAL YEAR 1998 ---------------------------------------------------------------------------------------------------------------- 48 States and the Virgin Household size District Alaska \1\ Hawaii Guam Islands of Columbia ---------------------------------------------------------------------------------------------------------------- 1 person....................................................... $122 $154 $197 $180 $157 2 persons...................................................... 224 283 361 331 288 3 persons...................................................... 321 405 517 474 413 4 persons...................................................... 408 514 657 602 525 5 persons...................................................... 485 611 780 715 623 6 persons...................................................... 582 733 936 858 748 7 persons...................................................... 643 810 1,035 948 827 8 persons...................................................... 735 926 1,183 1,083 945 Each additional person........................................ +92 +116 +148 +135 +118 ---------------------------------------------------------------------------------------------------------------- \1\ Maximum monthly allotments for designated urban areas of Alaska. Two separate higher allotment levels are applied in remote rural areas of Alaska. They are 28 and 55 percent higher than the urban allotments shown here. Source: U.S. Department of Agriculture. Application, processing, and issuing food stamps Food stamp benefits normally are issued monthly. The local welfare agency must either deny eligibility or make food stamps available within 30 days of initial application and must provide food stamps without interruption if an eligible household reapplies and fulfills recertification requirements in a timely manner. Households in immediate need because of little or no income and very limited cash assets, as well as the homeless and those with extraordinarily high shelter expenses, must be given expedited service (provision of benefits within 7 days of initial application). Food stamp issuance is a welfare agency responsibility, and issuance practices differ among welfare agencies. Most food stamp coupons are issued by: (1) providing (usually mailing) recipients an authorization-to-participate (ATP) card that is then turned in at a local issuance point (e.g., a bank or post office) when picking up their monthly allotment; or (2) mailing food stamp coupon allotments directly to recipients. However, in a growing number of States, electronic benefit transfer (EBT) systems are used. EBT systems replace coupons with an ATM-like card used to make food purchases at the point of sale by deducting the purchase amount from the recipient's food stamp benefit account. EBT issuance is used (either statewide or in part of the State) in over a dozen States (reaching more than 20 percent of food stamp recipients). All remaining States are well along in the process of converting to EBT issuance. Using food stamps Food stamp benefits are usually issued in the form of booklets of coupons. The smallest coupon denomination is $1; if change of less than $1 is due on a food stamp purchase, it is returned in cash. Typically, participating households use their food stamps in approved grocery stores to buy food items for home preparation and consumption; food stamp purchases are not taxable. However, the actual list of approved uses for food stamps is more extensive, and includes: (1) food for home preparation and consumption, not including alcohol, tobacco, or hot foods intended for immediate consumption; (2) seeds and plants for use in gardens to produce food for personal consumption; (3) in the case of the elderly and SSI recipients and their spouses, meals prepared and served through approved communal dining programs; (4) in the case of the elderly and those who are disabled to an extent that they cannot prepare all of their meals, home-delivered meals provided by programs for the homebound; (5) meals prepared and served to residents of drug addiction and alcoholic treatment programs, small group homes for the disabled, shelters for battered women and children, and shelters or other establishments serving the homeless; and (6) where the household lives in certain remote areas of Alaska, equipment for procuring food by hunting and fishing (e.g., nets, hooks, fishing rods, and knives). As noted earlier, food stamp benefits also can be used through EBT cards. In this case, the card is swiped through an approved retailer's point-of-sale device, automatically debiting the recipient's food stamp account and crediting the retailer's bank account; unlike coupon transactions, recipients receive no cash change. Quality Control (QC) Since the early 1970s, the Food Stamp Program, like other welfare programs, has had a quality control system to monitor the degree to which erroneous eligibility and benefit determinations are made by State welfare agencies. The system was established by regulation in the 1970s as an administrative tool to enable welfare officials to identify problems and take corrective actions. Today, by legislative directive, the QC system also is used to calculate and impose fiscal sanctions on States that have very high rates of erroneous benefit and eligibility decisions. Under the quality control system, welfare agencies, with Federal oversight, continuously sample their active food stamp caseloads, as well as their decisions to deny or end benefits. The agencies perform indepth investigations of the eligibility and benefit status of the randomly chosen cases looking for errors in applying Federal rules and otherwise erroneous benefit and eligibility outcomes. Over 90,000 cases are reviewed each year, and each State's sample is designed to provide a statistically valid picture of erroneous decisions and, in most instances, their dollar value in benefits. The resulting error rate information is used by program managers to chart needed changes in administrative practices, and by the Federal Government to assess fiscal sanctions on States with error rates above certain tolerance levels. This information also is used to reward States with error rates below a separate lower tolerance level, and to review welfare agency plans for action to correct procedures to control errors. Both error rate findings and any assessed sanctions are subject to appeal through administrative law judges and the Federal courts. Sanctions may be reduced or waived if the State shows good cause or if it is determined that the sanction amounts should be invested in improved State administration. Interest may be charged on outstanding sanction liabilities if the administrative appeals process takes more than 1 year. Quality control reviews generate annual estimates of the proportion of cases in which administrators or recipients make an ``error'' and the dollar value of those errors. Caseload and dollar error rates are calculated for overpayments (including incorrect payments to eligible and ineligible households) and underpayments. The accuracy of welfare agency decisions denying or terminating assistance also is measured, with an error rate reflecting the proportion of denials and terminations that were improper; no dollar value is calculated. The national weighted average for the dollar value of overpayments was estimated at 6.9 percent in fiscal year 1996 (table 15-7). This was just under the all-time low of 7 percent in 1991. Error rates for underpayments have been relatively unchanged over time. In fiscal year 1996, the national weighted average underpayment dollar error rate was estimated at 2.3 percent. Finally, the rate of denials and terminations found improper in the most recent estimate (1994) was 3.8 percent. TABLE 15-7.--FOOD STAMP QUALITY CONTROL ERROR RATES, FISCAL YEAR 1996 [Percent of benefits paid or not paid in error] ------------------------------------------------------------------------ Overpayment Underpayment Combined State error rate error rate error rate ------------------------------------------------------------------------ Alabama......................... 4.87 0.93 5.80 Alaska.......................... 5.22 2.27 7.50 Arizona......................... 6.99 1.45 8.44 Arkansas........................ 3.64 0.90 4.54 California..................... 5.65 3.73 9.32 Colorado........................ 6.04 1.70 7.74 Connecticut.................... 8.92 1.74 10.65 Delaware........................ 6.90 1.79 8.68 District of Columbia............ 4.72 2.05 6.77 Florida......................... 7.43 2.27 9.70 Georgia......................... 7.20 3.06 10.26 Guam............................ 7.11 2.51 9.62 Hawaii.......................... 2.46 1.53 3.99 Idaho.......................... 3.89 2.39 6.28 Illinois....................... 10.24 2.19 12.43 Indiana........................ 7.07 2.61 9.68 Iowa........................... 9.40 2.80 12.20 Kansas......................... 5.60 1.89 7.49 Kentucky........................ 3.70 1.63 5.33 Louisiana...................... 4.48 1.49 5.97 Maine.......................... 5.98 1.39 7.37 Maryland....................... 8.83 2.43 11.26 Massachusetts................... 3.40 1.29 4.69 Michigan....................... 9.56 1.67 11.23 Minnesota...................... 5.51 1.44 6.95 Mississippi.................... 8.21 1.80 10.01 Missouri....................... 9.91 3.47 13.38 Montana........................ 5.85 2.88 8.73 Nebraska........................ 6.76 3.78 10.54 Nevada......................... 7.79 2.84 10.63 New Hampshire.................. 7.19 2.17 9.37 New Jersey..................... 6.22 2.48 8.70 New Mexico..................... 5.94 2.02 7.96 New York........................ 6.11 2.77 8.88 North Carolina................. 7.73 2.27 10.00 North Dakota................... 4.44 1.66 6.10 Ohio........................... 9.31 3.32 12.63 Oklahoma....................... 7.16 3.03 10.19 Oregon......................... 9.03 2.14 11.17 Pennsylvania.................... 6.99 2.22 9.21 Rhode Island.................... 4.83 1.83 6.66 South Carolina................. 4.32 2.00 6.32 South Dakota................... 2.40 1.11 3.50 Tennessee....................... 7.14 1.84 8.99 Texas........................... 5.50 0.95 6.45 Utah........................... 7.23 2.40 9.63 Vermont........................ 9.28 1.59 10.87 Virginia........................ 10.92 3.03 13.95 Virgin Islands................. 6.92 1.84 8.76 Washington...................... 9.50 1.83 11.34 West Virginia.................. 9.05 3.35 12.40 Wisconsin...................... 9.27 2.13 11.40 Wyoming........................ 5.34 2.04 7.37 --------------------------------------- U.S. average................ 6.92 2.31 9.22 ------------------------------------------------------------------------ Note.--Underpayment and overpayment rates may not add to combined rates due to rounding. Source: Food and Consumer Service (1997). The dollar error rates reported through the food stamp quality control system are used as the basis for assessing the financial liability of States for overpaid and underpaid benefits. Although over $1 billion in sanctions have been assessed since the early 1980s, less than $10 million has been collected. The appeals process has delayed collection, and sanctions have been forgiven or waived both by Congress and the administration. In amending the rules governing sanctions in 1988 and 1990, Congress forgave accumulated sanctions, and, in late 1992, the administration waived sanctions by allowing States to invest the amounts in improved administration. Permission for States to invest sanction amounts in improved program administration has now become the rule, and States regularly apply and agree to invest sanction amounts under Federal guidelines rather than pay the Federal Government. Rules governing fiscal sanctions have changed a number of times. Under the most recent revision (1993), sanctions are assessed States with combined (overpayment and underpayment) dollar error rates above the national weighted average combined error rate for the year in question (9.2 percent in 1996). Each State's sanction amount is determined by using a ``sliding scale'' so that its penalty assessment equals an amount reflecting the degree to which the State's combined error rate exceeds the national average (the ``tolerance level''). For example, if the tolerance level is 10 percent and a State's error rate is 12 percent, the State would be assessed a sanction of 0.4 percent of benefits paid in the State that year (the State's error rate is 2 percentage points, or 20 percent, above the tolerance level, and it is assessed a sanction representing 20 percent of the amount by which it exceeds the tolerance level; 2 percentage points 0.2 = 0.4). A State with a combined error rate of 14 percent would owe a penalty of 1.6 percent of benefits, or 40 percent of the amount by which it exceeds the 10-percent tolerance level (4 percentage points 0.4 = 1.6). Thus, the degree to which a State is assessed sanctions increases as its error rate rises, rather than having sanctions assessed equally on each dollar above the tolerance level. In fiscal year 1996, 24 States and Guam had combined error rates above the 9.2 percent tolerance level and were assessed some $60 million. States also can receive increased Federal funding for administration if their error rates are below a second, much lower threshold. States with a combined error rate below 6 percent are entitled to a larger-than-normal Federal share of their administrative costs. The regular 50-percent Federal match is, depending on the degree to which the State's error rate is below 6 percent, raised to a maximum of 60 percent, as long as the State's rate of improper denials and terminations is below the national average. This ``enhanced'' administrative funding has typically totaled $10-$20 million a year; in fiscal year 1996, six States had combined error rates below 6 percent and received $15 million in enhanced funding. Finally, the quality control system identifies the various sources of error and requires that States develop and carry out corrective action plans to improve payment accuracy. These reviews generally show that the primary responsibility for overpayment errors is almost evenly split between welfare agencies and clients. The most common errors are related to establishing food stamp expense deductions and households' income. Intentional program violations (e.g., fraud) can occur in a number of ways; the most common are intentionally misrepresenting household circumstances in order to obtain food stamps or increase benefits and trafficking in food stamp coupons. About one-quarter of the dollar value of erroneous benefit and eligibility determinations identified through quality control reviews are fraudulent--under 2 percent of all benefits issued in 1996. The most recent Agriculture Department study on the extent of food stamp coupon trafficking estimated it at some $800 million in 1993--3.7 percent of all benefits issued that year. Interaction With Cash Assistance Programs The Food Stamp Program is intertwined with cash assistance in two ways: it is administratively linked to cash welfare aid at the State and local levels, and its recipient population is made up largely of recipients of other government benefits. At the State and local levels, the Food Stamp Program is administered by the same welfare offices and personnel that administer cash assistance such as TANF and general assistance. Joint food stamp and cash welfare application and interview procedures are the general rule. This coadministration does not apply for most elderly or disabled persons, whose cash assistance from the Supplemental Security Income Program (SSI) is administered through Social Security Administration offices, although these offices do provide limited intake services for the Food Stamp Program. For most persons participating in the Food Stamp Program, food stamp aid represents a second or third form of government payment. Fewer than 20 percent of food stamp households rely solely on nongovernmental sources for their cash income, although over 25 percent have some income from these sources (e.g., earnings, private retirement income). According to quality control data, the AFDC Program (the predecessor to TANF) contributed to the income of nearly 40 percent of food stamp households, and for almost all of them AFDC is their only cash income. SSI benefits go to some 23 percent of food stamp households, and almost one-third of these have no other income. About 20 percent of food stamp households receive Social Security or veterans benefits; over 10 percent are paid general assistance, unemployment insurance, or workers' compensation benefits. Recipiency Rates Table 15-8 shows food stamp participation rates from 1975 to 1996 using three different measures. Food stamp enrollment has fluctuated widely over the last 20 years, reaching its peak in fiscal year 1994; in that year, it averaged 27.5 million persons a month, with an all-time high of 28 million in the spring of 1994 (not including 1.4 million persons receiving aid in Puerto Rico). A recent (October 1994) report from the U.S. Department of Agriculture provides a more refined analysis of participation rates and the extent to which the program is serving its target population. The report estimates that 74 percent of persons eligible participated (69 percent of eligible households). These participants received 82 percent of benefits payable if all eligibles had been enrolled. However, subgroups of the food-stamp-eligible population participated at very diferent rates: (1) most eligible children were enrolled (86 percent); (2) only one-third of eligible elderly persons participated, and the majority of those not participating lived alone; (3) virtually all eligible single-parent households were enrolled, while only 78 percent of eligible households with children and two or more adults participated; (4) eligible households headed by African-Americans participated at a greater rate (92 percent) than households headed by Hispanics (61 percent) or white non-Hispanics (59 percent); and (5) virtually all eligible households with income below half the Federal poverty guidelines were enrolled, but the participation rate fell for eligible households with larger incomes (e.g., the participation rate for those with income between half the poverty guidelines and the guidelines themselves was 76 percent). Finally, another (December 1995) report from the Agriculture Department notes that about half of the major increase in food stamp enrollment from 1988 to 1993 (a rise of over 40 percent) was a result of a higher participation rate among eligibles--as opposed to an increased number of eligible persons. TABLE 15-8.--FOOD STAMP PARTICIPATION RATES IN THE UNITED STATES, 1975-96 ---------------------------------------------------------------------------------------------------------------- Food stamp participation as a percent Number of of-- food stamp ---------------------------------------- Year participants Pretransfer (in Total Poor poor millions) population \1\ population population ---------------------------------------------------------------------------------------------------------------- 1975..................................................... 16.3 7.6 63.0 NA 1976..................................................... 17.0 7.9 68.1 NA 1977..................................................... 15.6 7.2 63.1 NA 1978..................................................... 14.4 6.5 58.8 NA 1979..................................................... 15.9 7.1 61.0 57.1 1980..................................................... 19.2 8.4 65.6 60.7 1981..................................................... 20.6 9.0 64.7 60.8 1982..................................................... 20.4 8.8 59.3 56.3 1983..................................................... 21.6 9.2 61.2 58.5 1984..................................................... 20.9 8.8 62.0 58.5 1985..................................................... 19.9 8.3 60.2 56.6 1986..................................................... 19.4 8.0 59.9 56.2 1987..................................................... 19.1 7.8 59.1 55.6 1988..................................................... 18.7 7.6 58.9 55.2 1989..................................................... 18.8 7.6 59.6 55.6 1990..................................................... 20.0 8.0 59.6 55.7 1991..................................................... 22.6 9.0 63.3 59.3 1992..................................................... 25.4 10.0 68.9 64.0 1993..................................................... 27.0 10.4 68.7 NA 1994..................................................... 27.5 10.5 72.1 NA 1995..................................................... 26.6 10.1 73.0 NA 1996..................................................... 25.5 9.6 69.8 NA ---------------------------------------------------------------------------------------------------------------- \1\ Calculated as a percent of total U.S. resident population at the end of the fiscal year. Total U.S. resident population was 266.22 million persons at the end of fiscal year 1996. NA--Not available. Note.--Participants in Puerto Rico are not included in this table. Source: U.S. Bureau of the Census. Table 15-9 shows the average monthly number of people (in thousands) who received food stamp benefits in each State, the District of Columbia, and the participating Commonwealths and territories for selected years between 1975 (when the Food Stamp Program became nationally available) and 1996. There has been a general increase in food stamp participants since 1975, with enrollment peaking in 1994. The number of recipients has declined significantly since its height in the spring of 1994. Legislative History In the early 1980s, Congress enacted major revisions to the Food Stamp Program to hold down costs and tighten administrative rules. The Omnibus Budget Reconciliation Act of 1981, the Agriculture and Food Act of 1981, and the Omnibus Budget Reconciliation Act of 1982 all contained amendments that the Congressional Budget Office has estimated held food stamp spending for fiscal years 1982 through 1985 nearly $7 billion (13 percent) below what would have been spent under pre-1981 law. These laws delayed various inflation indexing adjustments, reduced the maximum benefit guarantee by 1 percent (restored in 1984), established income eligibility ceilings at 130 percent of the Federal poverty levels, initiated prorating of first- month benefits, replaced the Food Stamp Program in Puerto Rico with a nutrition assistance block grant, reduced benefits for those with earnings and high shelter expenses, ended eligibility for most postsecondary students and strikers, and raised fiscal penalties for States with high rates of erroneous benefit and eligibility determinations. In 1985, the Food Security Act (Public Law 99-198) reauthorized food stamp appropriations through fiscal year 1990 and reversed the earlier trend, significantly liberalizing food stamp rules. Major new initiatives included: a requirement for States to implement employment and training programs for food stamp recipients, automatic food stamp eligibility for AFDC and SSI recipients, and a prohibition on collection of sales taxes on food stamp purchases. Benefits were raised for some disabled and those with earnings, high shelter costs, and dependent care costs. Puerto Rico's nutrition assistance block grant was increased. Eligibility standards were liberalized, primarily by increasing and easing limits on assets. This was followed by several laws in 1986 and 1987 that opened up access to and increased benefits for the homeless, liberalized treatment of student aid, energy assistance, and income received from employment programs for the elderly and charitable organizations, further added to benefits for those with high shelter costs, and allowed Washington State to operate a special AFDC/food stamp demonstration project (followed by similar authorization for Minnesota in 1989). TABLE 15-9.--FOOD STAMP RECIPIENTS BY STATE, SELECTED FISCAL YEARS 1975-96 [Thousands of persons] -------------------------------------------------------------------------------------------------------------------------------------------------------- State 1975 \1\ 1979 \2\ 1985 \3\ 1990 \3\ 1991 \3\ 1992 \3\ 1993 \3\ 1994 \3\ 1995 \3\ 1996 \3\ -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama............................................. 393 525 588 449 504 550 560 551 525 509 Alaska.............................................. 12 25 22 25 30 38 43 46 45 46 Arizona............................................. 166 129 206 317 388 457 489 512 480 427 Arkansas............................................ 268 277 253 235 258 277 285 283 272 274 California.......................................... 1,517 1,334 1,615 1,936 2,212 2,558 2,866 3,155 3,175 3,143 Colorado............................................ 162 145 170 221 241 260 273 268 252 244 Connecticut......................................... 189 155 145 133 171 202 215 223 227 223 Delaware............................................ 39 45 40 33 41 51 58 59 57 58 District of Columbia................................ 112 100 72 62 72 82 87 91 94 93 Florida............................................. 767 828 630 781 1,021 1,404 1,500 1,474 1,395 1,371 Georgia............................................. 569 559 567 536 648 751 807 830 816 793 Hawaii.............................................. 84 96 99 77 83 94 103 115 125 130 Idaho............................................... 39 47 59 59 65 72 79 82 80 80 Illinois............................................ 948 837 1,110 1,013 1,096 1,156 1,178 1,189 1,151 1,105 Indiana............................................. 255 275 406 311 375 448 497 521 470 390 Iowa................................................ 118 117 203 170 180 192 196 196 184 177 Kansas.............................................. 63 73 119 142 156 175 188 192 184 172 Kentucky............................................ 449 405 560 458 496 529 530 522 520 478 Louisiana........................................... 502 523 644 727 742 779 779 756 711 670 Maine............................................... 151 121 114 94 116 133 138 136 132 131 Maryland............................................ 273 299 291 254 304 343 375 387 399 375 Massachusetts....................................... 560 429 337 347 397 429 443 442 410 374 Michigan............................................ 685 706 985 917 978 994 1,022 1,031 971 935 Minnesota........................................... 191 143 228 263 286 309 317 316 308 295 Mississippi......................................... 390 452 495 499 520 536 537 511 480 457 Missouri............................................ 299 280 362 431 490 549 591 593 576 554 Montana............................................. 38 33 58 57 61 66 70 71 71 71 Nebraska............................................ 50 55 94 95 99 107 113 111 105 102 Nevada.............................................. 34 27 32 50 63 80 93 97 99 97 New Hampshire....................................... 66 44 28 31 47 58 60 62 58 53 New Jersey.......................................... 565 524 464 381 441 495 531 545 540 541 New Mexico.......................................... 154 159 157 157 188 221 244 244 239 235 New York............................................ 1,398 1,704 1,834 1,546 1,717 1,885 2,045 2,154 2,183 2,099 North Carolina...................................... 537 517 474 419 517 597 627 630 614 631 North Dakota........................................ 19 20 33 39 41 46 48 45 41 40 Ohio................................................ 924 760 1,133 1,078 1,171 1,251 1,269 1,245 1,155 1,045 Oklahoma............................................ 184 184 263 267 296 346 370 376 375 354 Oregon.............................................. 208 160 228 216 240 265 283 286 289 288 Pennsylvania........................................ 893 923 1,032 954 1,052 1,137 1,186 1,208 1,173 1,124 Rhode Island........................................ 104 80 69 64 78 87 92 93 100 91 South Carolina...................................... 421 369 373 299 329 369 394 385 364 358 South Dakota........................................ 31 37 48 50 52 55 56 53 50 49 Tennessee........................................... 435 531 518 527 608 702 774 735 662 638 Texas............................................... 1,085 1,027 1,263 1,880 2,155 2,454 2,659 2,730 2,564 2,372 Utah................................................ 50 44 75 99 110 123 133 128 119 110 Vermont............................................. 46 40 44 38 47 54 58 65 59 56 Virginia............................................ 293 320 360 346 414 495 535 547 546 538 Washington.......................................... 239 205 281 337 385 432 462 468 476 476 West Virginia....................................... 204 182 278 262 281 310 322 321 329 300 Wisconsin........................................... 163 171 363 286 294 334 337 330 320 283 Wyoming............................................. 11 11 27 28 31 33 34 34 34 33 American Samoa...................................... NA NA NA NA NA NA NA 2 3 3 Guam................................................ 21 18 20 12 11 20 13 15 16 18 Northern Marianas................................... NA NA 4 4 2 2 3 4 4 4 Puerto Rico......................................... 1,800 1,822 1,480 1,480 1,490 1,480 1,440 1,410 1,370 1,330 Virgin Islands...................................... 25 34 32 18 15 16 18 20 23 31 --------------------------------------------------------------------------------------------------- Total......................................... 19,199 18,926 21,385 21,510 24,105 26,888 28,426 28,888 27,995 26,871 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Year end participation, July 1975. Total does not match totals in other tables, which are annual average participation. \2\ Year end participation, September 1979. Total does not match totals in other tables, which are annual average participation. During fiscal year 1979, and into 1980, participation increases were largely due to the elimination of the food stamp purchase requirement. Figures for Alabama and Mississippi are estimates. \3\ Annual average monthly participation. NA--Not available. Source: U.S. Department of Agriculture, Food and Consumer Service. Compiled by the Congressional Research Service. Legislation expanding eligibility and benefits continued into 1988 and 1989. The Hunger Prevention Act of 1988 (Public Law 100-435) increased food stamp benefits across the board, liberalized several eligibility and benefit rules, eased program access and administrative rules, and restructured the employment and training program and quality control system. The across-the-board benefit increase in maximum benefits (above normal inflation adjustments) called for by the act was 0.65 percent in fiscal year 1989, 2.05 percent in fiscal year 1990, and 3 percent in later years. Eligibility and benefit liberalizations included higher benefits for those with dependent care expenses, extension of liberal treatment for disabled applicants and recipients to new categories of disability, addition of a new income disregard for earned income tax credits, and liberalized treatment for farm households. Major provisions pertaining to program access and administration authorized 50-percent Federal cost sharing for State-option outreach activities, required coordination with cash welfare program application procedures, loosened rules governing monthly reporting and retrospective budgeting, allowed training of community volunteers to help screen applicants, and required, in some instances, issuance of the first 2 months' worth of benefits in a single allotment. Employment and training rules were revised by allowing some expansion in the types of activities supported (e.g., basic skills education), requiring increased support for participants' dependent care expenses, and mandating new performance standards for States. Finally, the food stamp quality control system was completely revamped to substantially reduce fiscal sanctions on States for erroneous benefit determinations, retroactive to fiscal year 1986. The 1990 Food, Agriculture, Conservation, and Trade Act (Public Law 101-624) reauthorized food stamp appropriations through fiscal year 1995. Although early versions of this act would have significantly liberalized food stamp eligibility and benefit rules, budget constraints dictated minimal expansions. The changes included: limited revisions for postsecondary students, forgiveness of most pre-1986 quality control sanctions on States, a few changes in administrative rules to open up program access and strengthen penalties for trafficking, and new pilot projects and study commissions for welfare program coordination. In addition, other laws eliminated a special requirement for single food stamp/SSI applications for those about to be discharged from institutions and barred the Food Stamp Program from counting (as a liquid asset) lump-sum earned income tax credit payments. The Mickey Leland Childhood Hunger Relief Act (incorporated in the 1993 Omnibus Budget Reconciliation Act, Public Law 103- 66) increased food stamp benefits and eased eligibility rules by: increasing and then removing the limit on special benefit adjustments (deductions) for households with very high shelter expenses, ending a practice of reducing benefits when there are short ``procedural'' breaks in enrollment, disregarding child support payments as income to the payor, increasing the degree to which vehicles are disregarded as assets in judging eligibility, revising the definition of a food stamp household to allow more persons who live together to apply separately, increasing the degree to which dependent care expense deductions can be claimed, expanding the degree to which earned income credits are disregarded as assets and State/local general assistance is disregarded as income, and boosting Puerto Rico's block grant. The act also lowered the Federal share of some State administrative expenses (to 50 percent), reduced quality control fiscal penalties on States with high rates of erroneous benefit and eligibility determinations, and liberalized the appeals process for those penalties. Finally, it expanded support for employment and training programs for food stamp recipients, added a new method for collecting claims against recipients, and increased penalties for trafficking in food stamps. The net cost of the 1993 amendments was estimated at $2.5 billion over fiscal years 1994-98. The 1996 Omnibus ``farm bill'' (the Federal Agriculture Improvement and Reform Act; Public Law 104-127) extended the Food Stamp Act's overall authorization for appropriations through fiscal year 1997, with no specific dollar limits. It also: (1) continued the requirement for nutrition assistance grants to Puerto Rico and American Samoa, and for employment and training programs, through fiscal year 2002; (2) revised rules for penalizing food stores in trafficking cases involving management; and (3) extended authority for several pilot projects. Most recently table 15-10 provides an overview of the characteristics of food stamp households for selected years since 1980; table 15-11 summarizes annual vital statistics about the program since 1972. TABLE 15-10.--CHARACTERISTICS OF FOOD STAMP HOUSEHOLDS, SELECTED YEARS 1980-95 [In percent] -------------------------------------------------------------------------------------------------------------------------------------------------------- Year and month survey was conducted ----------------------------------------------------------------------------------------------------------- Food stamp recipient households 1980 1985 1987 1988 1989 1990 1991 1992 1993 1994 1995 (Aug.) (Summer) (Summer) (Summer) (Summer) (Summer) (Summer) (Summer) (Summer) (Summer) (Annual) -------------------------------------------------------------------------------------------------------------------------------------------------------- With gross monthly income: Below the Federal poverty levels........ 87 94 94 92 92 92 91 92 91 90 92 Between the poverty levels and 130 percent of the poverty levels.......... 10 6 6 8 8 8 9 8 8 9 8 Above 130 percent of the poverty levels. 2 (\3\) (\3\) (\3\) (\3\) (\3\) (\3\) (\3\) 1 1 (\3\) With earnings............................... 19 20 21 20 20 19 20 21 21 21 21 With public assistance income \1\........... 65 68 74 72 73 73 70 66 68 69 68 With AFDC income........................ NA 39 41 42 42 43 41 40 40 38 38 With SSI income......................... 18 19 21 20 21 19 19 19 20 23 23 With children............................... 60 59 61 61 60 61 61 62 60 61 60 And female heads of household........... NA 46 50 50 50 51 51 51 52 51 50 With elderly members \2\.................... 23 21 21 19 20 18 17 15 16 16 16 With elderly female heads of household \2\.................................... NA 16 15 14 14 11 10 9 NA 11 NA ----------------------------------------------------------------------------------------------------------- Average household size...................... 2.8 2.7 2.7 2.6 2.6 2.6 2.6 2.5 2.6 2.5 2.5 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Public assistance income includes Aid to Families with Dependent Children, Supplemental Security Income, and general assistance. \2\ Elderly members and heads of household include those age 60 or older. \3\ Percentage equals 0.5 or less. NA--Not available. Note.--The proportion of households with public assistance income shown in this table is an estimate that generally overcounts them because it is not corrected for households with multiple sources of public assistance income. The proportion of households with elderly female heads shown in this table for years prior to 1994 is an estimate that generally undercounts them because it counts only single-person female households. The 1995 figures represent characteristics over the full course of fiscal year 1995. Source: U.S. Department of Agriculture, Food and Consumer Service surveys of the characteristics of food stamp households. Compiled by the Congressional Research Service. TABLE 15-11.--HISTORICAL FOOD STAMP STATISTICS, 1972-96 ---------------------------------------------------------------------------------------------------------------- Total Federal spending Average monthly (in millions) \1\ Average benefits (per person) Four-person ------------------------ monthly ------------------------ maximum Fiscal year Constant participation Constant monthly Current (1996) (in millions Current (1996) allotment \2\ dollars dollars \3\ of persons) dollars dollars \3\ ---------------------------------------------------------------------------------------------------------------- 1972 \4\.......................... $1,871 $7,072 11.1 $13.50 $49.30 $108 1973.............................. 2,211 8,048 12.2 14.60 49.20 112 1974.............................. 2,843 9,496 12.9 17.60 49.60 116 1975 \5\.......................... 4,624 13,872 17.1 21.40 55.00 150 1976.............................. 5,692 15,995 18.5 23.90 57.80 162 Transition quarter \6\............ 1,367 3,705 17.3 24.40 58.60 166 1977.............................. 5,469 14,274 17.1 24.70 57.30 166 1978.............................. 5,573 13,598 16.0 26.80 56.80 170 1979 \7\.......................... 6,995 15,459 17.7 30.60 58.10 182 1980.............................. 9,188 17,917 21.1 34.40 60.90 204 1981.............................. 11,308 19,789 22.4 39.50 64.00 209 1982 \8\.......................... 11,117 18,121 22.0 39.20 61.20 233 1983 \8\.......................... 12,733 20,118 23.2 43.00 66.20 253 1984 \8\.......................... 12,470 18,830 22.4 42.70 64.10 253 1985 \8\.......................... 12,599 18,395 21.4 45.00 66.20 264 1986 \8\.......................... 12,528 17,790 20.9 45.50 65.50 268 1987 \8\.......................... 12,539 17,304 20.6 45.80 62.70 271 1988 \8\.......................... 13,289 17,674 20.1 49.80 66.20 290 1989 \8\.......................... 13,815 17,545 20.2 51.90 64.40 300 1990 \8\.......................... 16,512 19,980 21.5 59.00 69.00 331 1991 \8\.......................... 19,765 22,730 24.1 63.90 71.60 352 1992 \8\.......................... 23,539 26,364 26.9 68.50 76.70 370 1993 \8\.......................... 24,749 26,729 28.4 68.00 74.80 375 1994.............................. 25,525 27,057 28.9 69.00 73.80 375 1995.............................. 25,676 26,446 28.0 71.30 73.40 386 1996.............................. 25,494 25,494 26.9 73.30 73.30 397 ---------------------------------------------------------------------------------------------------------------- \1\ Spending for benefits and administration, including Puerto Rico. \2\ For the 48 contiguous States and the District of Columbia, as in effect at the beginning of the fiscal year in current dollars. \3\ Constant dollar adjustments were made using the overall Consumer Price Index for Urban Consumers (CPI-U) for spending and the CPI-U ``food at home'' component for benefits. \4\ The first fiscal year in which benefit and eligibility rules were, by law, nationally uniform and indexed for inflation. \5\ The first fiscal year in which food stamps were available nationwide. \6\ July through September 1976. \7\ The fiscal year in which the food stamp purchase requirement was eliminated, on a phased in basis. \8\ Includes funding for Puerto Rico's nutrition assistance grant; earlier years include funding for Puerto Rico under the regular Food Stamp Program. Participation figures include enrollment in Puerto Rico (averaging 1.3 to 1.5 million persons a month under the nutrition assistance grant and higher figures in earlier years). Average benefit figures do not reflect somewhat lower benefits in Puerto Rico under its nutrition assistance grant. Note.--Figures in this table have been revised from similar tables presented in earlier versions of the Green Book to reflect more recent spending information and more precise inflation adjustments for constant dollar amounts. Source: Compiled by the Congressional Research Service. MEDICAID Medicaid, authorized under title XIX of the Social Security Act, is a Federal-State matching entitlement program providing medical assistance to low-income persons who are aged, blind, disabled, members of families with dependent children, and certain other pregnant women and children. Within Federal guidelines, each State designs and administers its own program. Thus, there is substantial variation among States in coverage, types and scope of benefits offered, and amounts of payments for services. Recent legislation has expanded the authority of States to decide who should be eligible for Medicaid, changed the rules governing Medicaid reimbursement to hospitals and community health centers, and increased States' flexibility to enroll Medicaid recipients into managed care programs. Eligibility Medicaid does not provide medical assistance to all poor persons. States are required to serve some population groups and are permitted to serve others. In general, eligibility for Medicaid is limited to low-income children and pregnant women, adults in families with dependent children, low-income persons with disabilities, and low-income elderly persons. Applicants' income and assets must be within program financial standards. For some population groups, these standards vary among States. For others, standards are set by Federal law. Medicaid is available to two broad classes of eligible persons: the ``categorically needy'' and the ``medically needy.'' The two terms once distinguished between welfare-related beneficiaries and those qualifying only under special Medicaid rules. However, nonwelfare groups have been added to the ``categorically needy'' list over the years, and recent legislation has partially severed the automatic connection between Medicaid and welfare. As a result, the terms are no longer especially helpful in sorting out the various populations for whom mandatory or optional Medicaid coverage has been made available, and some analysts believe they should be abandoned. However, the distinction between the categorically and medically needy is still an important one because the scope of covered services that States must provide to the categorically needy is much broader than the minimum scope of services for the medically needy. All States must cover certain mandatory groups of categorically needy individuals.\10\ Coverage of additional categorically needy groups is optional, as is coverage of the medically needy. The following discussion describes the mandatory and optional categorically eligible groups; the medically needy are discussed separately at the end of this section. --------------------------------------------------------------------------- \10\ Arizona does not operate a traditional Medicaid Program. Since 1982 it has operated a federally assisted medical assistance program for low-income persons under a demonstration waiver. --------------------------------------------------------------------------- Categorically Needy Families, Pregnant Women, and Children Prior to the enactment of the Personal Responsibility and Work Opportunities Act of 1996 (PRWORA, Public Law 104-193), there were two major routes to Medicaid for low-income women and children. The first was through cash welfare: individuals who qualified for Aid to Families with Dependent Children (AFDC) cash assistance or Supplemental Security Income (SSI) were automatically eligible for Medicaid. The second was through legislation in the last decade that extended coverage to low-income pregnant women and children who have no ties to the welfare system. PRWORA replaced the AFDC Program with a block grant to States for Temporary Assistance for Needy Families (TANF), severing the automatic connection between cash assistance and Medicaid. AFDC-related groups Prior to the enactment of the Personal Responsibility and Work Opportunities Act of 1996, States were required to provide Medicaid to all persons receiving cash assistance under AFDC, as well as to additional AFDC-related groups that did not actually receive cash payments. These groups included: persons who did not receive a payment because the amount would be less than $10; persons whose payments were reduced to zero because of recovery of previous overpayments; certain work supplementation participants; certain children for whom adoption assistance agreements were in effect or for whom foster care payments were being made under title IV-E of the Social Security Act; and persons who were ineligible for AFDC because of a requirement that could not be imposed under Medicaid. States were required to continue Medicaid for specified periods for certain families who lost AFDC benefits after receiving them in at least 3 of the preceding 6 months. If the family lost AFDC benefits because of increased income from earnings or hours of employment, Medicaid coverage had to be extended for 12 months. (During the second 6 months a premium could be imposed, the scope of benefits could be limited, or alternate delivery systems could be used.) If the family lost AFDC because of increased child or spousal support, coverage had to be extended for 4 months. States were also required to furnish Medicaid to certain two-parent families whose principal earner was unemployed and who did not receive cash assistance because the State was one of those permitted (under the Family Support Act of 1988) to set a time limit on AFDC coverage for such families. States were permitted, but not required, to provide coverage to additional AFDC-related groups. The most important of these were the ``Ribicoff children,'' whose income and resources were within AFDC standards but who did not meet the definition of ``dependent child.'' States could cover these children up to a maximum age of 21, and could limit coverage to reasonable subgroups, such as children in privately subsidized foster care, or those who lived in certain institutional settings. States could also furnish Medicaid to persons who would have received AFDC if the State's AFDC Program were as broad as permitted under Federal law. PRWORA repealed the AFDC Program, replacing it with the block grant program Temporary Assistance for Needy Families (TANF). Unlike AFDC, TANF eligibility does not confer automatic Medicaid eligibility. Although the automatic link between AFDC and Medicaid has been broken, the new law preserves Medicaid entitlement for individuals who meet the requirements for the AFDC Program that were in their State on July 16, 1996, even if they do not qualify for assistance under TANF. States are required to use the eligibility determination process already in place for AFDC and Medicaid, including the same income and resource standards and other rules formerly used to determine if a family's income and composition made them eligible for AFDC and Medicaid. States must continue Medicaid assistance for recipients of adoption assistance and foster care under title IV-E of the Social Security Act. As under prereform law, if a family becomes ineligible for Medicaid because of earnings or child or spousal support income and received Medicaid in three of the preceding 6 months, the family is eligible for a period of transitional Medicaid assistance. States also may continue Medicaid coverage to children up to age 21 who meet what were the AFDC income and resources requirements in effect in their State on July 16, 1996, but do not meet the definition of dependent child. States are permitted to deny Medicaid benefits to nonpregnant adults and heads of households who lose TANF benefits because of refusal to work, but must continue to provide Medicaid coverage to their children. PRWORA allows States to modify their ``prereform'' AFDC income and resource standards as follows: (1) States may lower their income eligibility standards, but not below those it used on May 1, 1988; (2) States may increase their income and resource standards up to the percentage increase in the Consumer Price Index (CPI); (3) States may use less restrictive income and resource standards than those in effect on July 16, 1996. Poverty level pregnant women and children Between 1986 and 1991, Congress gradually extended Medicaid to groups of pregnant women and children defined in terms of family income, rather than in terms of their ties to the AFDC Program. States are required to cover pregnant women and children under age 6 with family incomes below 133 percent of the Federal poverty income guidelines. In 1997, the poverty guideline in the 48 contiguous States and the District of Columbia is $13,330 for a family of three. Coverage for pregnant women is limited to services related to the pregnancy or complications of the pregnancy. Eligibility extends to 60 days after termination of the pregnancy. Children receive full Medicaid coverage. Since July 1, 1991, States have been required to cover all children who are under age 19, who were born after September 30, 1983, and whose family income is below 100 percent of the Federal poverty level. The 1983 start date means that the age of mandatory coverage will increase each year until reaching age 18 in fiscal year 2002. States are permitted, but not required, to cover pregnant women and infants under 1 year old not covered under the mandatory rules whose family income is no more than 185 percent of the Federal poverty level. As of August 1996, 30 States and the District of Columbia made use of this option to cover pregnant women and infants with family incomes over 133 percent of poverty. States wishing to further expand eligibility have several options under Medicaid law, including waivers of Federal rules. As of August 1996, six States had expanded eligibility to pregnant women, infants, or children in families with incomes over 185 percent of the Federal poverty level. The recently enacted Balanced Budget Act of 1997 (BBA 1997), Public Law 105-33, gives States the option to provide 12 months continuous Medicaid coverage for children regardless of whether they continue to meet income eligibility tests and to presume eligibility for low-income children, allowing the States to provide services during the time that eligibility is determined. Aged and Disabled Persons SSI-related groups States are generally required to cover recipients of SSI. However, States may use more restrictive eligibility standards for Medicaid than those for SSI if they were using those standards on January 1, 1972 (before the implementation of SSI). States that have chosen to apply at least one more restrictive standard are known as ``section 209(b)'' States, after the section of the Social Security Amendments of 1972 (Public Law 92-603) that established the option. These States may vary in their definition of disability, or in their standards related to income or resources. There are 12 section 209(b) States: Connecticut Hawaii Illinois Indiana Minnesota Missouri New Hampshire North Carolina North Dakota Ohio Oklahoma Virginia States using more restrictive income standards must allow applicants to deduct medical expenses from income (not including SSI or State supplemental payments, SSP) in determining eligibility. This process is known as ``spend down.'' For example, if an applicant has a monthly income of $400 (not including any SSI or SSP) and the State's maximum allowable income is $350, the applicant would be required to incur $50 in medical expenses before qualifying for Medicaid. As will be discussed below, the spend down process is also used in establishing eligibility for the medically needy. States must continue Medicaid coverage for several defined groups of individuals who have lost SSI or SSP eligibility. The ``qualified severely impaired'' are disabled persons who have returned to work and have lost eligibility as a result of employment earnings, but still have the condition that originally rendered them disabled and meet all nondisability criteria for SSI except income (the current law threshold for earnings is $1,053 per month). Medicaid must be continued if such an individual needs continued medical assistance to continue employment and the individual's earnings are insufficient to provide the equivalent of SSI, Medicaid, and attendant care benefits the individual would qualify for in the absence of earnings. States must also continue Medicaid coverage for persons who were once eligible for both SSI and Social Security payments and who lose SSI because of a cost of living adjustment (COLA) in their Social Security benefits. Similar Medicaid continuations have been provided for certain other persons who lose SSI as a result of eligibility for or increases in Social Security or veterans benefits. Finally, States must continue Medicaid for certain SSI-related groups who received benefits in 1973, including ``essential persons'' (persons who care for a disabled individual). States are permitted to provide Medicaid to individuals who are not receiving SSI but are receiving State-only supplementary cash payments. Effective August 1997, States have the option of creating a new eligibility category for disabled SSI beneficiaries with incomes up to 250 percent of poverty. Beneficiaries can ``buy into'' Medicaid by paying a sliding scale premium based on the individual's income as determined by the State. Qualified Medicare beneficiaries and related groups Effective January 1, 1991, States must provide limited Medicaid coverage for ``qualified Medicare beneficiaries'' (QMBs). These are aged and disabled persons who are receiving Medicare, whose income is below 100 percent of the Federal poverty level ($7,890 for an individual and $10,610 for a couple in 1997), and whose resources do not exceed twice the allowable amount under SSI ($4,000 for an individual and $6,000 for a couple). States must pay Medicare part B premiums (and, if applicable, part A premiums) for QMBs, along with required Medicare coinsurance and deductible amounts. In addition, all States must pay part B premiums (but not part A premiums or part A or B coinsurance and deductibles) for ``specified low-income Medicare beneficiaries'' (SLMBs). These are beneficiaries who would be QMBs except that their incomes are between 100 and 120 percent of the poverty level. Beginning January 1998, the income eligibility level for the SLMB Program will increase to 135 percent of poverty and States will be required to cover a portion of the part B premium for Medicare beneficiaries with incomes between 135 percent and 175 percent of poverty. States also are required to pay part A premiums, but no other expenses, for ``qualified disabled and working individuals.'' These are persons who formerly received Social Security disability benefits and hence Medicare, have lost eligibility for both programs, but are permitted under Medicare law to continue to receive Medicare in return for payment of the part A premium. Medicaid must pay this premium on behalf of such individuals who have incomes below 200 percent of poverty and resources no greater than twice the SSI standard. States are permitted to provide full Medicaid benefits, rather than just Medicare premiums and cost sharing, to QMBs who meet a State-established income standard that is no higher than 100 percent of the Federal poverty level. Seven States make use of this option. Institutionalized persons and related groups (all optional) States may provide Medicaid to certain otherwise ineligible groups of persons who are in nursing facilities or other institutions, or who would require institutional care if they were not receiving alternative services at home or in the community. States may establish a special income standard for institutionalized persons, not to exceed 300 percent of the maximum SSI benefits payable to a person who is living at home and has no other resources. States may also provide Medicaid to persons who would qualify for SSI but for the fact that they are in an institution. A State may obtain a waiver under section 2176 of OBRA 1981 to provide home and community-based services to a defined group of individuals who would otherwise require institutional care.\11\ Persons served under such a waiver may receive Medicaid coverage if they would be eligible if they lived in an institution. Such individuals may also be covered in a State that terminates its waiver program in order to take advantage of a new, no-waiver home and community-based services option created by OBRA 1990. --------------------------------------------------------------------------- \11\ These waivers are also known as 1915(c) waivers. --------------------------------------------------------------------------- A State may also provide Medicaid to several other classes of persons who need the level of care provided by an institution and who would be eligible if they were in an institution. These include children being cared for at home, persons of any age who are ventilator-dependent, and persons receiving hospice benefits in lieu of institutional services. Aliens Legal immigrants arriving in the United States after August 22, 1996 are ineligible for Medicaid benefits for 5 years. Coverage of such persons after the 5 year ban is a State option. States are required to provide Medicaid coverage to legal immigrants who resided in the country and were receiving benefits on August 22,1996, and for those residing in the country as of that date who become disabled in the future. States are also required to provide coverage to: refugees for the first 7 years after entry into the United States; asylees for the first 7 years after asylum is granted; individuals whose deportation is being withheld by the Immigration and Naturalization Service for the first 7 years after grant of deportation withholding; lawful permanent aliens after they have been credited with 40 quarters of coverage under Social Security; and honorably discharged U.S. military veterans, active duty military personnel, and their spouses and unmarried dependent children. Qualified aliens and nonqualified aliens who meet the financial and categorical eligibility requirements for Medicaid may receive emergency Medicaid services. The Medically Needy Forty States and other jurisdictions provide Medicaid to at least some groups of ``medically needy'' persons. These are persons who meet the nonfinancial standards for inclusion in one of the groups covered under Medicaid, but who do not meet the applicable income or resource requirements for categorically needy eligibility. The State may establish higher income or resource standards for the medically needy. In addition, individuals may spend down to the medically needy standard by incurring medical expenses, in the same way that SSI recipients in section 209(b) States may spend down to Medicaid eligibility. For the medically needy, spend down may involve the reduction of assets and income. The State may set its separate medically needy income standard for a family of a given size at any level up to 133 percent of the maximum payment for a similar family under the State's AFDC Program as in place on July 16, 1996. States may limit the groups of individuals who may receive medically needy coverage. If the State provides any medically needy program, however, it must include all children under 18 who would qualify under one of the mandatory categorically needy groups, and all pregnant women who would qualify under either a mandatory or optional group, if their income or resources were lower. As of October 1, 1995, the following 40 States and territories covered some groups of the medically needy: American Samoa Arkansas California Connecticut District of Columbia Florida Georgia Hawaii Illinois Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Montana Nebraska New Hampshire New Jersey New York North Carolina North Dakota Northern Mariana Islands Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island Tennessee Texas Utah Vermont Virgin Islands Virginia Washington West Virginia Wisconsin Medicaid and the Poor In 1996, Medicaid covered 12 percent of the total U.S. population (excluding institutionalized persons) and 44.6 percent of those with incomes below the Federal poverty level. Because categorical eligibility requirements for children are less restrictive than those for adults, poor children are much more likely to receive coverage. Table 15-12 shows Medicaid coverage by age and income status in 1995, as reported in the March 1996 Current Population Survey (CPS) conducted by the Census Bureau. Note that persons shown as receiving Medicaid may have had other health coverage as well. Nearly all the elderly, for example, have Medicare and/or private coverage. Children under age 6 with family incomes below poverty are most likely to be covered. Coverage rates drop steadily with age and income until age 65. Services States are required to offer the following services to categorically needy recipients under their Medicaid Programs: inpatient and outpatient hospital services; laboratory and x- ray services; nursing facility (NF) services for those over age 21; home health services for those entitled to NF care; early and periodic screening, diagnosis, and treatment (EPSDT) for those under age 21; family planning services and supplies; physicians' services; and nurse-midwife services. OBRA 1989 required States to provide ambulatory services offered by federally qualified health centers, effective April 1, 1990, and services furnished by certified family or pediatric nurse practitioners, effective July 1, 1990. States may also provide additional medical services such as drugs, eyeglasses, and inpatient psychiatric care for individuals under age 21 or over 65 (see table 15-24). TABLE 15-12.--MEDICAID COVERAGE BY AGE AND FAMILY INCOME, 1995 [In thousands] ------------------------------------------------------------------------ Percent Age Covered by Persons in with Medicaid age group Medicaid ------------------------------------------------------------------------ In poverty: 0-5.......................... 4,131 5,854 70.6 6-10......................... 2,687 4,228 63.5 11-18........................ 2,785 5,555 50.1 19-44........................ 4,598 13,770 33.4 45-64........................ 1,546 4,764 32.4 65 or older.................. 1,008 3,355 30.0 -------------------------------------- Total...................... 16,750 37,530 44.6 ====================================== Family income between 100 and 133 percent of poverty: 0-5.......................... 842 1,804 46.7 6-10......................... 558 1,545 36.1 11-18........................ 677 2,267 29.9 19-44........................ 1,177 6,202 19.0 45-64........................ 415 2,281 18.2 65 or older.................. 495 3,093 16.0 -------------------------------------- Total...................... 4,163 17,190 24.2 ====================================== Family income between 133 and 185 percent of poverty: 0-5.......................... 951 2,879 33.0 6-10......................... 467 2,299 20.3 11-18........................ 607 3,136 19.4 19-44........................ 1,095 10,060 10.9 45-64........................ 343 3,452 9.9 65 or older.................. 376 4,766 7.9 -------------------------------------- Total...................... 3,839 26,590 14.4 ====================================== Family income greater than 185 percent of poverty: 0-5.......................... 1,189 13,650 8.7 6-10......................... 797 11,490 6.9 11-18........................ 1,098 19,480 5.6 19-44........................ 1,974 75,190 2.6 45-64........................ 867 42,170 2.1 65 or older.................. 942 20,440 4.6 -------------------------------------- Total...................... 6,867 182,400 3.8 ====================================== All persons: 0-5.......................... 7,112 24,186 29.4 6-10......................... 4,508 19,563 23.0 11-18........................ 5,166 30,437 17.0 19-44........................ 8,843 105,222 8.4 45-64........................ 3,171 52,667 6.0 65 or older.................. 2,820 31,654 8.9 -------------------------------------- Total...................... 31,618 263,710 12.0 ------------------------------------------------------------------------ Source: CRS tabulations from the March 1996 Current Population Survey (CPS). Table excludes persons in institutions and approximately 250,000 children under age 15 living with nonfamily caretakers. Number of recipients is lower than the number on administrative records due to underreporting by CPS respondents. Federal law establishes the following requirements for coverage of the medically needy: (1) if a State provides medically needy coverage to any group, it must provide ambulatory services to children and prenatal and delivery services for pregnant women; (2) if a State provides institutional services for any medically needy group, it must also provide ambulatory services for this population group; and (3) if the State provides medically needy coverage for persons in intermediate care facilities for the mentally retarded (ICF/ MRs) or in institutions for mental diseases, it must offer to all groups covered in its medically needy program either all of the mandatory services or alternatively the care and services listed in 7 of the 25 paragraphs in the law defining covered services. Financing The Federal Government helps States pay the cost of Medicaid services by means of a variable matching formula which is adjusted annually. The Federal matching rate, which is inversely related to a State's per capita income, can range from 50 to 83 percent, though, in 1997, the highest rate is 77.22 percent, with 11 States and the District of Columbia receiving the minimum match of 50 percent. Beginning in fiscal year 1998 the Federal matching rate for the District of Columbia will increase permanently to 70 percent; Alaska's matching percentage will increase to 59.8 percent for fiscal years 1998, 1999, and 2000. Federal matching for the territories is set at 50 percent with a maximum dollar limit placed on the amount each territory can receive. The Federal share of administrative costs is 50 percent for all States except for certain items where the authorized rate is higher. Reimbursement Policy States establish their own service reimbursement policies within general Federal guidelines. OBRA 1989 codified the regulatory requirement that payments must be sufficient to enlist enough providers so that covered services will be available to Medicaid beneficiaries at least to the extent they are available to the general population in a geographic area. Beginning April 1, 1990, States were required to submit to the Secretary their payment rates for pediatric and obstetrical services along with additional data that would assist the Secretary in evaluating the State's compliance with this requirement. Effective October 1, 1997, States no longer must assure adequate payment levels to obstetricians and pediatricians nor provide annual reports on their payment levels for these services. Until 1980, States were required to follow Medicare rules in paying for institutional services. The Boren amendment, enacted with respect to nursing homes in 1980 and extended to hospitals in 1981, authorized States to establish their own payment systems, as long as rates were reasonable and adequate to meet the costs of efficiently and economically operated facilities. Rates for hospitals had to also be sufficient to assure reasonable access to inpatient services of adequate quality. BBA 1997 repeals the Boren amendment. Effective October 1, 1997, States must instead provide public notice of the proposed rates for hospitals, nursing facilities, and ICFs/ MR and the methods used to establish those rates. State hospital reimbursement systems must provide for additional payments to facilities serving a disproportionate share of low-income patients. Unlike the comparable Medicare payments, Medicaid payments must follow a formula that considers a hospital's charity patients as well as its Medicaid caseload. OBRA 1990 established new rules for Medicaid reimbursement of prescription drugs. The law denies Federal matching funds for drugs manufactured by a firm that has not agreed to provide rebates. Under amendments made by the Veterans Health Care Act of 1992, a manufacturer is not deemed to have a rebate agreement unless the manufacturer has entered into a master agreement with the Secretary of Veterans Affairs. Rebate amounts vary depending on the nature of the drug. The minimum rebate is 11 percent of the average price. OBRA 1990 established a 4-year moratorium on reductions in most payment rates for pharmacists. Practitioners and providers are required to accept payments under the program as payment in full for covered services except where nominal cost-sharing charges may be required. States may generally impose such charges with certain exceptions. They are precluded from imposing cost sharing on services for children under 18, services related to pregnancy, family planning or emergency services, and services provided to nursing facility inpatients who are required to spend all of their income for medical care except for a personal needs allowance. Effective August 5, 1997 States are permitted to pay Medicaid rates to providers for services to ``dual eligibles'' (those Medicare beneficiaries who are also eligible for full Medicaid benefits) and qualified Medicare beneficiaries (QMBs). State Medicaid Programs are not required to pay Medicare cost- sharing expenses for these persons if the Medicare payment for the service exceeds the amount that the State Medicaid Program would have paid for the service to a recipient who was not a dual eligible or QMB. Administration Medicaid is a State-administered program. At the Federal level, the Health Care Financing Administration (HCFA) of the Department of Health and Human Services is responsible for overseeing State operations. Federal law requires that a single State agency be charged with administration of the Medicaid Program. Generally, that agency is either the State welfare agency, the State health agency, or an umbrella human resources agency. The single State agency may contract with other State entities to conduct some program functions. Further, States may process claims for reimbursement themselves or contract with fiscal agents or health insuring agencies to process these claims. Medicaid and Managed Care To contain escalating health care costs and improve access to the Medicaid Program, States are increasingly adopting managed care delivery systems. Between 1991 and 1996, enrollment in Medicaid managed care increased by nearly 400 percent. According to the Health Care Financing Administration (HCFA), by 1996, 13.3 million Medicaid beneficiaries representing 40 percent of the total Medicaid population were enrolled in some form of managed care. Medicaid managed care refers to a system of health care delivery where the provision of an agreed upon set of Medicaid-covered health care services is coordinated by a health plan or a primary care case manager. These plans, or case managers, are obligated by contract or agreement to be responsible for the care provided (or not provided) to enrollees. The goal of managed care systems is to provide access to quality health care while containing costs by ensuring that all necessary services are provided to individuals. Until recently, States wishing to require Medicaid beneficiaries to enroll in managed care plans had to obtain one of two types of waivers from the HCFA. States could operate voluntary managed care programs without a waiver. The first type of waiver, known as a ``freedom-of-choice'' waiver, is permitted by section 1915(b) of the Social Security Act. Section 1915(b) waivers allow States to waive specific requirements for a specific population or geographical area, and have been used to require Medicaid beneficiaries to enroll in managed care plans and to restrict the providers from whom enrollees receive Medicaid-covered services. There are currently some 100 freedom-of-choice programs operating in 42 States. The second, a section 1115(a) waiver, offers States the greatest flexibility, allowing HCFA to waive a broad range of Medicaid requirements. As of October 1997, statewide section 1115(a) waivers were approved in 18 States, implemented in 15, and pending in eight States. In addition to permitting States to require Medicaid beneficiaries to enroll in managed care and to restrict their choice of providers, these waivers allow States to expand coverage to those not traditionally eligible for Medicaid, to impose premiums and copayments on those new eligibles, and to modify the Medicaid benefit package. Section 1115(a) waivers are approved on condition that they are budget neutral to the Federal Government--that Federal costs over the life of the waiver (typically 5 years) are no more than if the State had continued operating its prewaiver Medicaid Program. To enforce budget neutrality, some waivers employ aggregate caps on Federal matching and others use per capita expenditure caps. Some States exempt aged, blind, and disabled Medicaid eligibles, who often incur high medical expenses, from mandatory managed care participation. Most Medicaid managed care programs have operated under waiver authorities allowed by Medicaid statute. Medicaid managed care programs generally fall into two categories: those where the health plan assumes full financial risk for services it provides to enrollees, referred to as ``risk-based'' programs; and those where an individual health care provider (a physician or other licensed health professional) is paid a small monthly amount by the State in return for managing health care services for a defined population, referred to as ``primary care case management (PCCM)'' programs. In the latter case, the provider acts as a gatekeeper for services needed by an individual, but does not assume financial risk for health care services provided. As of July 1996, 38 States had risk-based programs, and 32 States had PCCM programs (National Academy for State Health Policy, 1997, p. 2). The Medicaid population covered by State managed care programs is composed primarily of low-income women and children. As of July 1996, all States operating risk-based programs enrolled the AFDC-related population; 36 enrolled poverty-level children; and 33 enrolled poverty-level pregnant women (p. 32). Some States enroll populations with more complex medical needs, such as the noninstitutionalized elderly, and persons with mental and physical disabilities. As of July 1996, 20 States covered the noninstitutional elderly in their risk- based programs; 24 covered SSI eligible children; and 23 covered SSI eligible adults living in the community. In general, States tend to require risk-based managed care plans to provide a comprehensive range of Medicaid-covered services. The exception to this are long-term care services needed by the elderly and disabled, which generally are not included under managed care, and behavioral health services, which are sometimes provided under a separate contract. This is in contrast to States that operate PCCM programs, where most States limit the PCCM providers to gatekeeper functions for a smaller range of services. The Balanced Budget Act of 1997 (BBA 1997) included several provisions that will significantly affect the operation of State Medicaid managed care programs. Effective October 1, 1997, States no longer need a waiver of Federal law to require the majority of Medicaid beneficiaries to enroll in managed care. Waivers are still required to mandate the enrollment of children with special health care needs, Native Americans/ Alaskan Natives, and dual-eligible Medicaid-Medicare beneficiaries. BBA 1997 permits States to contract with managed care organizations serving only Medicaid beneficiaries and to ``lock'' beneficiaries into the same plan for up to 12 months. Prior to the new law, States required a 1115 waiver to implement these requirements. BBA 1997 establishes new rules intended to safeguard the quality of care provided under managed care arrangements. These include provisions related to enrollment and disenrollment; information that States must provide enrollees and potential enrollees; assurances of adequate capacity and access to care; balance billing protections; solvency standards; marketing materials; grievance procedures; and other quality assurance standards the Secretary of HHS is charged with developing. The law adopts the ``prudent layperson'' standard to whether a Medicaid managed care organization would have to pay for services provided to an enrollee in an emergency room and includes a ban on so-called ``gag rules,'' prohibiting interference with physician advice to enrollees. Legislative History The following is a summary of the major Medicaid changes enacted as part of the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990), Public Law 101-508: 1. Reimbursement for prescribed drugs.--The law requires manufacturers of prescription drugs to provide rebates to State Medicaid Programs. States are required to cover all the drugs manufactured by a firm entering into a rebate agreement. The minimum rebate is 10 percent of the average manufacturer price for the product. Beginning in 1993, States are required to have prospective (i.e., point-of-sale) and retrospective drug utilization review (DUR) programs, to assure that prescriptions are appropriate and medically necessary. Until the end of 1993, enhanced Federal matching payments were provided for State administrative costs related to the rebate and DUR programs. The law establishes a 4-year moratorium on reductions in most payment rates for pharmacists. 2. Required payment of premiums and cost sharing for enrollment under group health plans where cost effective.--Effective January 1, 1991, the law requires States to pay premiums for group health plans for which Medicaid beneficiaries are eligible, when it is cost effective to do so. States pay any cost sharing required by a plan and continue to furnish any Medicaid benefits not covered under the plan. Providers under group health plans are required to accept plan payment as payment in full for Medicaid enrollees. 3. Protection of low-income Medicare beneficiaries.--The law accelerates phase in of the requirement that States pay Medicare premiums and cost sharing for QMBs, Medicare beneficiaries with incomes below 100 percent of the Federal poverty level. For all but five States, the requirement was effective January 1, 1991. All States must pay part B premiums (but not part A premiums or cost sharing) for beneficiaries with incomes below 120 percent of the poverty level beginning in 1995. 4. Child health provisions.--Effective July 1, 1991, all States are required to cover children under age 19 who were born after September 30, 1983, and whose family income is below 100 percent of the Federal poverty level. States are required to accept Medicaid applications for mothers and children at locations other than welfare offices, and are required to continue benefits for pregnant women until 2 months after the end of the pregnancy, and for infants through the first year of life. States are required to make additional payments for outlier cases and are prohibited from imposing durational limits on coverage for patients who are under age 1 in any hospital or under age 6 in a disproportionate share hospital. 5. Home and community-based care as optional service.--The law permits States to provide home and community-based services to functionally disabled Medicaid beneficiaries age 65 or over, effective the later of July 1, 1991, or 30 days after the publication of interim rules. States are permitted to limit eligibility for the services without waivers and thus to provide the services without meeting cost- effectiveness tests. Federal matching payments cannot exceed 50 percent of what it would have cost to provide Medicare nursing facility care to the same group of beneficiaries. Total Federal expenditures were limited to $580 million over the period fiscal years 1991-95. 6. Community supported living arrangements.--The law permits between two and eight States to provide community supported living arrangement services to developmentally disabled individuals who live with their families or in small community residential settings, effective the later of July 1, 1991, or 30 days after the publication of interim rules. Services include personal assistance, training and habilitation, and other services needed to help with activities of daily living. Total Federal expenditures were limited to $100 million over the period fiscal years 1991-95. 7. Payments for COBRA continuation coverage.--The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, Public Law 99-272) provides that employees or dependents leaving an employee health insurance group in a firm with 20 or more employees must be offered an opportunity to continue buying insurance through the group for 18 to 36 months (depending on the reason for leaving the group). OBRA 1990 permits State Medicaid Programs to pay for COBRA continuation coverage, when it is cost effective to do so, effective January 1, 1991. States may pay premiums for individuals with incomes below 100 percent of poverty and resources less than twice the SSI limit who are eligible for continuation coverage under a group health plan offered by an employer with 75 or more employees. 8. Miscellaneous.--The law establishes demonstration projects in three to four States to test the effect of providing Medicaid to families with incomes below 150 percent of the Federal poverty level that do not meet categorical eligibility requirements, and projects in two States to provide Medicaid coverage for early intervention services for HIV-infected individuals who do not meet disability criteria. The law also includes new measures to ensure the quality of physician services under Medicaid, technical corrections in nursing home reform provisions, and numerous other technical and miscellaneous amendments. The following is a summary of the major changes enacted in the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law 102-234. 1. Voluntary contributions and provider-specific taxes.--The law caps Federal matching payments for State Medicaid spending that is financed with revenues from provider donations or taxes. Generally effective January 1, 1992, before the Federal share is computed, a State's expenditures for Medicaid are reduced by revenues received by a State or local government from provider- related donations, and health care-related taxes that are not broad based. Broad based taxes are those that are uniformly imposed on all providers in a class, or all businesses in a class furnished by the providers. States with non-broad-based taxes in effect or approved as of November 22, 1991, are permitted to continue them temporarily, but the taxes may not be increased. States with voluntary contribution programs in effect or reported as of September 30, 1991, for States' fiscal year 1992, may continue them temporarily but may not increase them. During fiscal years 1993-95, Federal matching funds for revenue from voluntary contributions, provider specific taxes, and broad-based taxes were limited to the greater of 25 percent of the State share of Medicaid expenditures or the amount of donations and taxes collected in the State in fiscal year 1992. Federal matching funds are allowable for certain donations. These are bona fide provider donations that are not related to Medicaid payments to the provider, and donations in the form of payment for outstationing Medicaid eligibility workers. Beginning in fiscal year 1993, the latter type of donations are limited to 10 percent of a State's Medicaid administrative costs. 2. Payments for disproportionate share hospitals.--The law places an aggregate national cap of 12 percent of Medicaid expenditures on payment adjustments for disproportionate share hospitals (DSH). Beginning with fiscal year 1993, States with DSH payments of 12 percent or more of total Medicaid expenditures in fiscal year 1992 cannot exceed this dollar level in the future; States with DSH payments of less than 12 percent may increase them at the same rate as their overall Medicaid expenditure growth. Two 1991 acts concern enrollment in two health maintenance organizations. The law specifies that no more than 75 percent of the enrollees of an HMO may be Medicaid or Medicare beneficiaries. Public Law 102-276 authorized a waiver of this requirement for the Dayton Area Health Plan; Public Law 102-317 authorized a similar waiver for the Tennessee Primary Care Network. The following is a summary of major Medicaid changes enacted in the Veterans Health Care Act of 1992, Public Law 102-585, pertaining to Medicaid reimbursement policies for prescription drugs. 1. Calculation of best price.--The law excludes certain prices from calculation of best price (the lowest price available from a manufacturer) for Medicaid drug rebates. The law excludes the prices charged to the Indian Health Service, the Department of Veterans Affairs, veterans State homes, the Department of Defense, the Public Health Service and certain private and nonprofit hospitals, as well as any prices charged under the Federal Supply Schedule of the General Services Administration or under State pharmaceutical assistance programs. 2. Rebate amounts.--The law changes the minimum basic rebates for brand name drugs to 15.7 percent of the average manufacturer price (AMP) in calendar year 1993, 15.4 percent of the AMP in 1994, 15.2 percent of the AMP in 1995, and 15.1 percent of the AMP thereafter. In each calendar year, the basic rebate is the greater of the percentage stated, or the difference between the AMP and the best price. The following is a summary of major Medicaid changes enacted in the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993), Public Law 103-66. 1. Medicaid fraud control units.--The law changed the State option to a requirement that each State operate a Medicaid fraud and abuse control unit unless the State demonstrates that effective operation of a unit would not be cost effective and that, in the absence of a unit, beneficiaries would be protected from abuse and neglect. 2. Prescription drug formularies.--States have been prohibited from using drug formularies (lists of covered and excluded drug products) and from imposing restrictions on new drug products for 6 months after a drug is approved by the Food and Drug Administration. States are allowed to use formularies to cover only the State's designated drug(s) in a class of therapeutic alternatives and impose certain requirements on prescriptions for new drugs. 3. Asset and trust provisions.--Some individuals must spend their assets down to a State-established level before Medicaid pays for nursing facility and other medical care. To try to ensure that these persons apply their assets to the cost of their care and do not give them away in order to gain Medicaid eligibility sooner than they otherwise would, Medicaid prohibits persons from transferring assets for less than fair market value. OBRA 1993 amends Medicaid law to close loopholes that allow individuals to shelter or divest assets in order to become eligible for Medicaid-covered long-term care. States are required to provide for a delay in Medicaid eligibility for institutionalized persons or their spouses who dispose of assets for less than fair market value. A transfer that occurred during the 36-month period prior to an application for coverage would trigger a period of ineligibility beginning with the month the assets were transferred. Under the OBRA 1993 amendments, the period of ineligibility is determined by comparing the cost of care and the fair market value of the assets transferred. States are required to seek recovery of Medicaid expenditures from the estate of a deceased beneficiary who received certain Medicaid benefits. Amounts paid by Medicaid for nursing facility services, home and community-based care, and related hospital and prescription drug services must be recovered from the estates of individuals who were over age 55 when such services were received. OBRA 1993 provides for exemptions to these asset transfer and recovery provisions if application of the law would result in ``undue hardship'' according to criteria established by the Secretary. 4. Child support enforcement.--A child who is covered by Medicaid may also be covered by private health insurance that is carried by a noncustodial parent. To improve medical support for children, Medicaid law is amended to mandate that States have laws in effect to require the cooperation of employers and insurers in obtaining parental coverage. 5. Disproportionate share hospitals (DSH).--States are prohibited from designating a hospital as a DSH unless Medicaid beneficiaries account for at least 1 percent of the hospital's impatient days. In addition, the law requires that DSH payments to a State or locally owned or operated facility cannot exceed the costs the facility incurs in furnishing inpatient or outpatient service to Medicaid beneficiaries or uninsured patients. For this purpose, a facility's cost is net of payments received from Medicaid (other than DSH payments) and from uninsured individuals. 6. Physician referral.--Medicaid payments for designated health services (including clinical laboratory, physical and occupational therapy, radiology, or other diagnostic services, home health and other services) are limited if such services are furnished upon referral from a physician who has a specified financial relationship with the provider furnishing the service. 7. Childhood immunization.--A new entitlement program is established under which States are entitled to receive vaccines purchased by the Federal Government for federally eligible children up to age 18. Providers registered in a State's immunization program are entitled to receive free vaccines for children covered under the new law. Children eligible to receive federally purchased vaccines are Medicaid-eligible, American Indian or Alaska Native, children whose health insurance does not cover the cost of vaccines, and children who receive immunization at federally qualified health centers or rural health clinics. 8. Tuberculosis-related services.--States are permitted to provide Medicaid coverage for outpatient tuberculosis- related services to tuberculosis-infected individuals who meet the income and resource limits that apply to disabled persons. The following is a summary of major Medicaid changes enacted in the Contract with America Advancement Act of 1996, Public Law 104-121: 1. Alcoholics and drug addicts.--SSI benefits are terminated for individuals receiving disability cash assistance based on a finding of alcoholism and drug addiction. Persons who lose SSI eligibility, which gives them automatic Medicaid coverage, may still be eligible for Medicaid if they meet other Medicaid eligibility criteria. States are required to perform a redetermination of Medicaid eligibility in any case where an individual loses SSI and that determination affects his or her Medicaid eligibility. The following is a summary of major Medicaid changes enacted in the Personal Responsibility and Work Opportunity Act of 1996, Public Law 104-193: 1. Eligibility.--A new cash welfare block grant to States, Temporary Aid for Needy Families (TANF), is established. The automatic link between AFDC and Medicaid is severed. Families who meets AFDC eligibility criteria as of July 16, 1996 are eligible for Medicaid, even if they do not qualify for TANF. States must use the same income and resource standards and other rules previously used to determine eligibility, and the prereform AFDC family composition requirement still must be met. A State may lower its income standard, but not below the standard it applied on May 1, 1988. A State may increase its income and resource standards up to the percentage increase in the Consumer Price Index (CPI) subsequent to July 16, 1996. States may use less restrictive methods for counting income and resources than were required by law as in effect on July 16, 1996. States are permitted to deny Medicaid benefits to adults and heads of households who lose TANF benefits because of refusal to work; States may not apply this requirement to poverty-related pregnant women and children. 2. Disabled children.--The definition of disability used to establish the eligibility of children for SSI is narrowed. Children who lose SSI eligibility, which gives them automatic Medicaid coverage, may still be eligible for Medicaid if they meet other Medicaid eligibility criteria. States are required to perform a redetermination of Medicaid eligibility in any case where an individual loses SSI and that determination affects his or her Medicaid eligibility. 3. Aliens.--For legal resident aliens and other qualified aliens who entered the United States on or after August 22, 1996 whose coverage is not mandatory (e.g., they have been credited with 40 quarters of Social Security coverage), Medicaid is barred for 5 years. Except for emergency services, Medicaid coverage for such aliens entering before August 22, 1996 and coverage after the 5 year ban are State options. 4. Administration.--A State may use the same application form for Medicaid as they use for TANF. A State may choose to administer the Medicaid Program through the same agency that administers TANF or through a separate Medicaid agency. A special fund of $500 million is provided for enhanced Federal matching for States' expenditures attributable to the administrative costs of Medicaid eligibility determinations due to the law. The following is a summary of major Medicaid changes enacted in the Balanced Budget Act of 1997, Public Law 105-33: 1. Eligibility.--The Balanced Budget Act restores Medicaid eligibility and SSI coverage for legal immigrants who entered the country prior to August 22, 1996 and later become disabled; guarantees continued Medicaid eligibility for children with disabilities who are expected to lose their SSI eligibility as the result of restrictions enacted in 1996; and extends the exemption from the ban on Medicaid and other forms of public assistance for refugees and individuals seeking asylum from 5 to 7 years. States are permitted to provide continuous Medicaid coverage for 12 months to all children, regardless of whether they continue to meet income eligibility tests. States are permitted to create a new Medicaid eligibility category for individuals with incomes up to 250 percent of poverty and who would, but for income, be eligible for SSI. Such individuals can ``buy into'' Medicaid by paying a sliding scale premium based on the individuals' income as determined by the State. 2. Payment methodology.--The law repeals the Boren amendment, which directed that payment rates to institutional providers be ``reasonable and adequate'' to cover the cost of ``efficiently and economically operated'' facilities, and repeals the law requiring States to assure adequate payment levels for services provided by obstetricians and pediatricians. The requirement to pay federally qualified health centers and rural health clinics 100 percent of reasonable costs will be phased out over 6 fiscal years, with special payment rules in place during fiscal years 1998-2002 to ease the transition. 3. Payments for disproportionate share hospitals.--The law reduces State DSH allotments by imposing freezes and making graduated proportionate reductions. Limitations are placed on payments to institutions for mental disease (IMDs). The act establishes additional caps on the State DSH allotments for fiscal years beginning in 1998 and specifies those caps for 1998 to 2002. States are required to report annually on the method used to target DSH funds and to describe the payments made to each hospital. 4. Managed care.--The law eliminates the need for 1915(b) waivers for most Medicaid populations. Under the new law, States can require the majority of Medicaid recipients to enroll in managed care simply by amending their State plan. Waivers are still required to mandate that children with special health care needs and certain dual eligibles Medicaid-Medicare beneficiaries enroll with managed care entities. The law establishes a statutory definition of primary care case management (PCCM), adds it as a covered service, and sets contractual requirements for both PCCM and Medicaid managed care organizations. The act also includes managed care provisions that establish standards for quality and solvency, and provide protections for beneficiaries. The law repeals the provision that requires managed care organizations to have no more than 75 percent of their enrollment be Medicaid and Medicare beneficiaries and the prohibition on cost sharing for services furnished by health maintenance organizations. Program Data Under current law, Federal Medicaid outlays are projected to reach $104.4 billion in fiscal year 1998, a 6-percent increase over the $98.5 billion projected for fiscal year 1997. This and other Medicaid Program data are presented in tables 15-13 to 15-24. TABLE 15-13.--HISTORY OF MEDICAID PROGRAM COSTS, 1966-98 ---------------------------------------------------------------------------------------------------------------- Total Federal State -------------------------------------------------------------- Fiscal year Dollars Dollars Dollars (in Percent (in Percent (in Percent millions) increase millions) increase millions) increase ---------------------------------------------------------------------------------------------------------------- 1966 \1\......................................... $1,658 ........ $789 ........ $869 ........ 1967 \1\......................................... 2,368 42.8 1,209 53.2 1,159 33.4 1968 \1\......................................... 3,686 55.7 1,837 51.9 1,849 59.5 1969 \1\......................................... 4,166 13.0 2,276 23.9 1,890 2.2 1970 \1\......................................... 4,852 16.5 2,617 15.0 2,235 18.3 1971............................................. 6,176 27.3 3,374 28.9 2,802 25.4 1972 \2\......................................... 8,434 36.6 4,361 29.3 4,074 45.4 1973............................................. 9,111 8.0 4,998 14.6 4,113 1.0 1974............................................. 10,229 12.3 5,833 16.7 4,396 6.9 1975............................................. 12,637 23.5 7,060 21.0 5,578 26.9 1976............................................. 14,644 15.9 8,312 17.7 6,332 13.5 TQ \3\....................................... 4,106 NA 2,354 NA 1,752 NA 1977............................................. 17,103 \4\ 16.8 9,713 \4\ 16.9 7,389 \4\ 16.7 1978............................................. 18,949 10.8 10,680 10.0 8,269 11.9 1979............................................. 21,755 14.8 12,267 14.9 9,489 14.8 1980............................................. 25,781 18.5 14,550 18.6 11,231 18.4 1981............................................. 30,377 17.8 17,074 17.3 13,303 18.4 1982............................................. 32,446 6.8 17,514 2.6 14,931 12.2 1983............................................. 34,956 7.7 18,985 8.4 15,971 7.0 1984............................................. 37,569 7.5 20,061 5.7 17,508 9.6 1985 \5\......................................... 40,917 8.9 \6\ 22,65 5 12.9 \6\ 18,26 2 4.3 1986............................................. 44,851 9.6 24,995 10.3 19,856 8.7 1987............................................. 49,344 10.0 27,435 9.8 21,909 10.3 1988............................................. 54,116 9.7 30,462 11.0 23,654 8.0 1989............................................. 61,246 13.2 34,604 13.6 26,642 12.6 1990............................................. 72,492 18.4 41,103 18.8 31,389 17.8 1991............................................. 91,519 26.2 52,532 27.8 38,987 24.2 1992............................................. 118,166 29.1 67,827 29.1 50,339 29.1 1993............................................. 131,775 11.5 75,774 11.7 56,001 11.2 1994............................................. 143,204 8.7 82,034 8.3 61,170 9.2 1995............................................. 156,395 9.2 89,070 8.6 67,325 10.1 1996............................................. 161,963 3.6 91,990 3.3 69,973 3.9 1997 \7\......................................... 174,310 7.6 98,503 7.1 75,807 8.3 1998 \7\......................................... 184,712 6.0 104,384 6.0 80,328 6.0 ---------------------------------------------------------------------------------------------------------------- \1\ Includes related programs which are not separately identified, though for each successive year a larger portion of the total represents Medicaid expenditures. As of January 1, 1970, Federal matching was only available under Medicaid. \2\ Intermediate care facilities (ICFs) transferred from the cash assistance programs to Medicaid effective January 1, 1972. Data for prior periods do not include these costs. \3\ Transitional quarter (beginning of Federal fiscal year moved from July 1 to October 1). \4\ Represents increase over fiscal year 1976, i.e., five calendar quarters. \5\ Includes transfer of function of State fraud control units to Medicaid from Office of Inspector General. \6\ Temporary reductions in Federal payments authorized for fiscal years 1982-84 were discontinued in fiscal year 1985. \7\ Current law estimate. NA--Not available. Note.--Totals may not add due to rounding. Source: Budget of the U.S. Government, fiscal years 1969-98 and Health Care Financing Administration. TABLE 15-14.--UNDUPLICATED NUMBER OF MEDICAID RECIPIENTS BY ELIGIBILITY CATEGORY, FISCAL YEARS 1972-95 [Numbers in thousands] ---------------------------------------------------------------------------------------------------------------- Adults in Permanent Dependent family Fiscal year Total Age 65 or Blindness and total children with Other \1\ recipients over disabled under age dependent title XIX 21 children ---------------------------------------------------------------------------------------------------------------- 1972........................ 17,606 3,318 108 1,625 7,841 3,137 1,576 1973........................ 19,622 3,496 101 1,804 8,659 4,066 1,495 1974........................ 21,462 3,732 135 2,222 9,478 4,392 1,502 1975........................ 22,007 3,615 109 2,355 9,598 4,529 1,800 1976........................ 22,815 3,612 97 2,572 9,924 4,774 1,836 1977 \2\.................... 22,832 3,636 92 2,710 9,651 4,785 1,959 1978........................ 21,965 3,376 82 2,636 9,376 4,643 1,852 1979........................ 21,520 3,364 79 2,674 9,106 4,570 1,727 1980 \3\.................... 21,605 3,440 92 2,819 9,333 4,877 1,499 1981 \3\.................... 21,980 3,367 86 2,993 9,581 5,187 1,364 1982 \3\.................... 21,603 3,240 84 2,806 9,563 5,356 1,434 1983 \3\.................... 21,554 3,371 77 2,844 9,535 5,592 1,129 1984 \3\.................... 21,607 3,238 79 2,834 9,684 5,600 1,187 1985 \3\.................... 21,814 3,061 80 2,937 9,757 5,518 1,214 1986 \3\.................... 22,515 3,140 82 3,100 10,029 5,647 1,362 1987 \3\.................... 23,109 3,224 85 3,296 10,168 5,599 1,418 1988 \3\.................... 22,907 3,159 86 3,401 10,037 5,503 1,343 1989 \3\.................... 23,511 3,132 95 3,496 10,318 5,717 1,175 1990........................ 25,255 3,202 83 3,635 11,220 6,010 1,105 1991........................ 28,280 3,359 85 3,983 13,415 6,778 658 1992........................ 30,926 3,742 84 4,378 15,104 6,954 664 1993........................ 33,432 3,863 84 4,932 16,285 7,505 763 1994........................ 35,053 4,035 87 5,372 17,194 7,586 779 1995........................ 36,282 4,119 92 5,767 17,164 7,604 1,537 ---------------------------------------------------------------------------------------------------------------- \1\ This category is composed predominantly of children not meeting the definition of ``dependent'' children, that is, ``Ribicoff children.'' \2\ Fiscal year 1977 began in October 1976 and was the first year of the new Federal fiscal cycle. Before 1977, the fiscal year began in July. \3\ Beginning in fiscal year 1980, recipients' categories do not add to the unduplicated total due to the small number of recipients that are in more than one category during the year. Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-15.--MEDICAID RECIPIENTS BY BASIS OF ELIGIBILITY BY STATE, FISCAL YEAR 1995 -------------------------------------------------------------------------------------------------------------------------------------------------------- Total AFDC Other title State recipients Aged Blind Disabled children AFDC adults IX -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama...................................................... 539,251 71,301 1,515 129,850 243,999 88,912 2,879 Alaska....................................................... 68,117 4,464 90 6,578 38,834 18,151 -- Arizona...................................................... 493,693 24,651 792 60,748 296,550 110,952 -- Arkansas..................................................... 353,370 52,618 1,239 86,160 119,702 58,665 31,644 California................................................... 5,016,645 486,356 25,645 716,667 2,198,066 1,377,013 93,680 Colorado..................................................... 293,723 36,851 121 49,345 128,301 71,962 -- Connecticut.................................................. 380,327 66,428 317 49,498 177,792 86,285 7 Delaware..................................................... 78,555 6,102 114 12,528 42,830 15,947 632 District of Columbia......................................... 138,444 8,021 168 23,733 73,181 33,264 77 Florida...................................................... 1,735,141 211,814 3,206 272,622 996,873 209,152 41,474 Georgia...................................................... 1,147,443 103,985 14,020 177,401 597,092 244,346 100 Hawaii....................................................... 51,674 17,366 15 13,664 11,229 7,658 -- Idaho........................................................ 115,014 9,337 51 18,432 61,850 24,785 559 Illinois..................................................... 1,551,949 127,142 1,368 275,631 763,633 331,662 52,513 Indiana...................................................... 559,020 65,968 1,029 66,466 297,569 109,870 9,326 Iowa......................................................... 304,304 37,978 543 49,514 140,081 74,056 743 Kansas....................................................... 255,702 25,739 139 39,040 129,222 55,611 7 Kentucky..................................................... 640,930 63,219 1,817 154,518 270,303 125,936 -- Louisiana.................................................... 785,399 102,421 1,718 158,416 376,075 146,769 -- Maine........................................................ 153,180 19,404 230 31,741 65,978 31,299 3,977 Maryland..................................................... 414,261 47,957 318 85,320 196,813 73,724 10,129 Massachusetts................................................ 727,506 103,504 6,879 153,622 310,943 152,558 -- Michigan..................................................... 1,168,435 86,101 2,016 220,836 543,287 300,692 3,036 Minnesota.................................................... 473,420 63,098 617 74,953 234,174 100,578 -- Mississippi.................................................. 519,697 66,639 1,558 124,253 247,312 76,328 2,076 Missouri..................................................... 695,458 92,948 1,115 96,592 347,712 155,552 -- Montana...................................................... 98,708 9,260 86 16,255 34,947 17,397 19,200 Nebraska..................................................... 168,383 21,310 235 23,715 42,586 27,099 53,438 Nevada....................................................... 105,233 11,311 427 15,754 51,492 23,006 1,924 New Hampshire................................................ 96,954 12,240 399 11,337 49,552 22,552 313 New Jersey................................................... 789,666 91,674 1,205 142,824 356,618 188,048 290 New Mexico................................................... 286,763 17,385 645 39,161 170,368 59,204 -- New York..................................................... 3,035,477 378,165 3,766 506,807 1,353,135 626,200 167,404 North Carolina............................................... 1,084,337 152,218 1,364 142,610 536,678 251,467 -- North Dakota................................................. 61,383 10,791 34 8,686 26,074 12,402 2,291 Ohio......................................................... 1,532,547 188,866 1,086 231,435 777,100 329,710 4,350 Oklahoma..................................................... 393,613 51,666 686 55,479 198,806 86,032 944 Oregon....................................................... 451,959 37,783 1,341 44,816 119,661 55,512 -- Pennsylvania................................................. 1,230,193 167,477 564 268,478 548,087 219,112 24,078 Rhode Island................................................. 135,230 19,294 224 25,028 60,761 29,923 -- South Carolina............................................... 495,500 77,488 1,857 92,681 234,783 86,897 1,794 South Dakota................................................. 74,077 9,380 149 13,337 38,011 13,200 -- Tennessee.................................................... 1,466,194 108,325 3,063 217,635 460,778 172,713 14,475 Texas........................................................ 2,561,957 307,993 4,158 266,035 1,451,316 532,455 -- Utah......................................................... 160,408 9,125 128 18,882 87,330 43,324 781 Vermont...................................................... 99,693 10,327 78 14,621 50,406 21,019 -- Virginia..................................................... 681,313 85,366 1,112 104,621 363,954 126,260 -- Washington................................................... 639,256 53,111 380 104,436 316,436 163,507 60 West Virginia................................................ 388,667 34,765 342 74,303 178,801 96,283 4,173 Wisconsin.................................................... 460,016 65,133 1,185 103,560 127,206 79,946 80,339 Wyoming...................................................... 51,374 5,924 14 6,218 27,249 10,947 587 Puerto Rico.................................................. 1,054,638 180,065 444 69,129 582,038 222,962 -- Virgin Islands............................................... 17,389 1,095 7 877 10,130 4,618 662 ------------------------------------------------------------------------------------------ United States............................................ 35,209,559 3,937,789 91,168 5,696,842 16,571,536 7,375,942 629,300 All jurisdictions........................................ 36,281,586 4,118,949 91,619 5,766,848 17,163,704 7,603,522 629,962 -------------------------------------------------------------------------------------------------------------------------------------------------------- Note.--Total recipients include unknowns which are not reflected in this table. Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-16.--MEDICAID EXPENDITURES BY BASIS OF ELIGIBILITY BY STATE, FISCAL YEAR 1995 [In millions of dollars] -------------------------------------------------------------------------------------------------------------------------------------------------------- Aged, blind and AFDC State Total Aged Blind Disabled AFDC AFDC Other disabled children expenditures children adults title XIX (percent) (percent) -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama.................................... $1,455 $452 $6 $589 $194 $171 $10 71.9 13.3 Alaska..................................... 252 45 1 76 79 52 ......... 48.1 31.3 Arizona.................................... 218 16 1 66 75 60 ......... 38.2 34.2 Arkansas................................... 1,376 387 8 662 121 79 108 76.9 8.8 California................................. 10,521 2,386 139 4,242 1,394 2,043 216 64.3 13.3 Colorado................................... 1,063 321 3 451 144 136 ......... 72.9 13.5 Connecticut................................ 2,125 955 4 768 229 170 0 81.3 10.8 Delaware................................... 324 76 1 148 58 38 2 69.2 17.8 District of Columbia....................... 532 132 2 251 87 60 0 72.2 16.4 Florida.................................... 4,802 1,552 16 1,785 1,093 293 64 69.8 22.8 Georgia.................................... 3,076 572 154 1,077 643 610 0 58.6 20.9 Hawaii..................................... 258 156 0 93 3 3 ......... 97.0 1.3 Idaho...................................... 360 94 0 165 52 47 1 72.1 14.5 Illinois................................... 5,600 1,068 11 2,744 958 654 165 68.3 17.1 Indiana.................................... 1,878 685 6 688 309 168 16 73.4 16.5 Iowa....................................... 1,036 296 2 457 169 111 1 72.8 16.3 Kansas..................................... 831 251 1 346 135 90 0 72.0 16.2 Kentucky................................... 1,945 468 8 882 294 264 ......... 69.9 15.1 Louisiana.................................. 2,708 683 11 1,170 509 335 ......... 68.8 18.8 Maine...................................... 760 247 1 319 99 74 20 74.6 13.0 Maryland................................... 2,019 509 3 923 328 189 67 71.1 16.3 Massachusetts.............................. 3,972 1,499 101 1,701 393 278 ......... 83.1 9.9 Michigan................................... 3,409 796 11 1,595 451 429 10 70.5 13.2 Minnesota.................................. 2,550 903 10 1,182 274 181 ......... 82.1 10.8 Mississippi................................ 1,266 352 6 528 232 139 7 70.0 18.3 Missouri................................... 2,039 696 5 726 374 236 ......... 70.0 18.3 Montana.................................... 326 107 1 130 32 30 25 73.0 13.4 Nebraska................................... 608 213 2 217 45 45 85 71.3 13.2 Nevada..................................... 350 78 3 139 59 47 18 62.7 13.0 New Hampshire.............................. 473 190 10 165 68 39 0 77.2 12.8 New Jersey................................. 3,813 1,191 10 1,741 374 483 1 77.1 12.6 New Mexico................................. 714 124 6 301 182 102 ......... 60.2 12.4 New York................................... 22,086 7,726 187 9,484 2,657 1,707 325 78.8 12.2 North Carolina............................. 3,175 959 11 1,034 633 538 ......... 63.1 12.0 North Dakota............................... 297 121 0 119 30 22 3 80.8 11.8 Ohio....................................... 5,585 2,029 5 2,118 857 574 2 74.3 11.6 Oklahoma................................... 1,055 321 2 376 243 111 1 66.3 11.4 Oregon..................................... 1,327 270 34 499 215 79 ......... 60.5 11.2 Pennsylvania............................... 4,633 1,956 2 1,759 551 323 42 80.2 11.0 Rhode Island............................... 673 273 2 302 54 42 ......... 85.7 10.8 South Carolina............................. 1,438 400 7 607 262 160 2 70.5 10.6 South Dakota............................... 305 102 1 136 44 22 ......... 78.4 10.4 Tennessee.................................. 2,772 603 10 876 366 217 119 53.7 10.2 Texas...................................... 6,565 1,841 23 2,024 1,527 1,150 ......... 59.2 10.0 Utah....................................... 464 84 1 185 92 89 10 58.1 9.8 Vermont.................................... 320 95 1 143 50 30 ......... 74.5 9.6 Virginia................................... 1,833 566 6 722 329 210 ......... 70.6 9.4 Washington................................. 1,461 508 2 562 173 214 0 73.4 9.2 West Virginia.............................. 1,169 296 1 467 176 181 48 65.4 9.0 Wisconsin.................................. 1,894 782 9 747 90 105 131 81.2 8.8 Wyoming.................................... 171 50 0 66 29 24 1 67.8 8.6 Puerto Rico................................ 244 41 0 16 135 52 ......... 23.6 8.3 Virgin Islands............................. 12 3 0 2 4 4 0 36.8 8.1 ------------------------------------------------------------------------------------------------------------ United States.......................... 119,885 36,483 848 48,552 17,838 13,456 1,499 71.6 7.9 All jurisdictions...................... 120,141 36,527 848 48,570 17,976 13,511 1,499 71.5 7.7 -------------------------------------------------------------------------------------------------------------------------------------------------------- Note.--Total expenditures include unknowns which are not reflected in this table. Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-17.--TOTAL AND PER CAPITA MEDICAID PAYMENTS FOR CATEGORICALLY NEEDY AND MEDICALLY NEEDY, FISCAL YEARS 1975, 1981, 1992, AND 1995 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 1975 1981 1992 1995 Percent change -------------------------------------------------------------------------------------------------------------------------- 1975-95 Category of needy Total Percent Total Percent Total Percent Total Percent ------------------- amount of Per amount of Per amount of Per amount of Per Total Per (millions) total capita (millions) total capita (millions) total capita (millions) total capita spending capita ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Categorically needy: Receiving cash payments......................... $7,188 58.7 $431 $14,534 53.4 $861 $41,742 46.0 $2,238 $53,718 44.7 $2,773 647.3 543.4 Aged...................................... 1,341 11.0 555 2,480 9.1 1,270 5,795 6.4 3,778 7,089 5.9 4,540 428.6 718.0 Blind..................................... 61 0.5 717 109 0.4 1,527 334 0.4 4,669 464 0.4 6,745 660.2 840.7 Disabled.................................. 2,042 16.7 1,094 5,616 20.6 2,490 19,863 21.9 6,097 29,524 24.6 6,926 1,345.9 533.1 AFDC children............................. 1,850 15.1 222 3,002 11.0 361 8,376 9.2 891 9,193 7.7 1,006 396.9 353.2 Adults in AFDC families................... 1,895 15.5 478 3,328 12.2 769 7,374 8.1 1,682 7,448 6.2 1,715 293.0 258.8 Not receiving cash payments................... 1,753 14.3 1,261 4,736 17.4 2,641 16,064 17.7 4,243 20,458 17.0 4,369 1,067.0 246.5 Aged...................................... 1,275 10.4 2,331 3,143 11.6 5,273 7,085 7.8 11,658 8,935 7.4 13,823 600.8 493.0 Blind..................................... 12 0.1 1,094 19 0.1 2,785 80 0.1 15,310 70 0.1 14,167 483.3 1,195.0 Disabled.................................. 353 2.9 1,854 1,214 4.5 5,146 5,065 5.6 11,913 6,248 5.2 11,375 1,670.0 513.5 AFDC children............................. 61 0.5 152 153 0.6 302 1,764 1.9 1,156 2,560 2.1 1,222 4,096.7 703.9 Adults in AFDC families................... 27 0.2 144 87 0.3 298 1,428 1.6 1,606 1,720 1.4 1,679 6,270.4 1,066.0 Other title XIX........................... 25 0.2 463 120 0.4 734 643 0.7 1,927 925 0.8 2,560 3,600.0 452.9 --------------------------------------------------------------------------------------------------------------------------------------------- Total................................... 8,941 73.0 495 19,270 70.8 1,032 57,807 63.7 2,577 74,176 61.7 3,084 729.6 523 ============================================================================================================================================= Medically needy: Aged.......................................... 1,742 14.2 2,672 4,303 15.8 5,260 8,927 9.8 11,724 10,203 8.5 12,396 485.7 363.9 Blind......................................... 20 0.2 1,472 27 0.1 3,132 71 0.1 21,865 133 0.1 35,709 565.0 2,325.9 Disabled...................................... 657 5.4 2,202 2,471 9.1 4,924 5,243 5.8 13,876 7,200 6.0 15,831 995.9 618.9 AFDC children................................. 274 2.2 324 353 1.3 460 1,592 1.8 943 1,953 1.6 1,101 612.8 239.8 Adults in AFDC families....................... 140 1.1 368 348 1.3 613 1,265 1.4 1,930 1,628 1.4 1,730 1,062.9 370.1 Other title XIX............................... 467 3.8 267 433 1.6 360 268 0.3 1,844 293 0.2 2,208 -37.3 727.0 --------------------------------------------------------------------------------------------------------------------------------------------- Total....................................... 3,301 27.0 838 7,935 29.2 2,145 17,367 19.1 4,782 21,410 17.8 5,186 548.6 518.9 ============================================================================================================================================= Grand total................................. 12,242 100.0 556 27,205 100.0 1,216 90,814 100.0 2,936 120,140 100.0 3,311 881.4 495.5 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Note.--Totals may not addd due to rounding. Fiscal year 1975 ends in June; fiscal years 1981, 1992, and 1995 end in September. Total includes other coverage groups and unknowns. Other categories not shown in the total for 1995 are: Other coverage pre-1988, $15,475; coverage from 1988, $7,871; and medical assistance status unknown, $1,209. Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-18.--MEDICAID RECIPIENTS AND PAYMENTS BY BASIS OF ELIGIBILITY, FISCAL YEAR 1995 ---------------------------------------------------------------------------------------------------------------- Amount (in Percent of Recipients Percent of Per capita Basis of eligibility millions) total (in thousands) total payments ---------------------------------------------------------------------------------------------------------------- Age 65 and over......................... $36,527 30.4 4,119 11.4 $8,868 Blind................................... 848 0.7 92 0.3 9,256 Disabled................................ 48,570 40.4 5,767 15.9 8,422 Dependent children under age 21......... 17,976 15 17,164 47.3 1,047 Adults in families with dependent children............................... 13,511 11 7,604 21 1,777 Other title XIX......................... 1,499 1.2 630 1.7 2,380 ----------------------------------------------------------------------- Total \1\........................... 120,140 100.0 36,282 100.0 3,311 ---------------------------------------------------------------------------------------------------------------- \1\ Total expenditure and recipient data includes unknowns. Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-19.--MEDICAID PAYMENTS AND PER CAPITA PAYMENTS BY BASIS OF ELIGIBILITY, SELECTED FISCAL YEARS 1975-95 [In millions of dollars] -------------------------------------------------------------------------------------------------------------------------------------------------------- Fiscal year Percent Basis of eligibility ------------------------------------------------------------------------------------------------------------ change 1975 1981 1984 1986 1988 1989 1990 1991 1992 1994 1995 1975-95 -------------------------------------------------------------------------------------------------------------------------------------------------------- In nominal dollars --------------------------------------------------------------------------------------------------------------------- Payments: Age 65 and over................. $4,358 $9,226 $12,815 $15,097 $17,135 $18,558 $21,508 $25,453 $29,078 $33,618 $36,527 738.2 Blind........................... 93 154 219 277 344 409 434 475 530 644 848 811.8 Disabled........................ 3,052 9,301 11,758 14,635 18,250 20,476 23,969 27,798 33,326 41,654 48,570 1,491.4 Dependent children under age 21. 2,186 3,508 3,979 5,135 5,848 6,892 9,100 11,690 14,491 17,302 17,976 722.3 Adults in families with dependent children............. 2,062 3,763 4,420 4,880 5,883 6,897 8,590 10,439 12,185 13,585 13,511 555.2 Other........................... 492 552 700 980 1,198 1,137 1,051 973 1,032 1,243 1,499 204.7 --------------------------------------------------------------------------------------------------------------------- Total \1\..................... 12,242 27,204 33,891 41,005 48,710 54,500 64,859 77,048 90,814 108,270 120,140 881.4 ===================================================================================================================== Per capita payment: Age 65 and over................. 1,205 2,948 3,957 4,808 5,425 5,926 6,717 7,577 7,770 8,331 8,868 635.9 Blind........................... 850 1,784 2,766 3,401 4,005 4,319 5,212 5,572 6,298 7,412 9,256 988.9 Disabled........................ 1,296 3,108 4,149 4,721 5,366 5,858 6,595 6,979 7,612 7,755 8,422 549.8 Dependent children under age 21. 228 366 411 512 583 668 811 871 959 1,006 1,047 359.2 Adults in families with dependent children............. 455 725 789 864 1,069 1,206 1,429 1,540 1,752 1,791 1,777 290.5 Other title XIX................. 273 405 590 719 891 967 1,062 1,732 1,814 2,169 2,380 771.8 --------------------------------------------------------------------------------------------------------------------- Total, per capita payment..... 556 1,238 1,569 1,821 2,126 2,318 2,568 2,725 2,936 3,089 3,311 495.5 --------------------------------------------------------------------------------------------------------------------- In constant 1995 dollars --------------------------------------------------------------------------------------------------------------------- Payments: Age 65 and over................. 12,476 16,907 18,863 20,919 22,169 22,919 25,300 28,503 31,610 34,562 36,527 192.8 Blind........................... 266 262 322 384 445 505 511 532 576 662 848 218.5 Disabled........................ 8,737 15,842 17,307 20,279 23,611 25,288 28,195 31,129 36,227 42,823 48,570 455.9 Dependent children under age 21. 6,258 5,975 5,857 7,115 7,566 8,512 10,704 13,091 15,753 17,788 17,976 187.2 Adults in families with dependent children............. 5,903 6,409 6,506 6,762 7,611 8,518 10,105 11,690 13,246 13,966 13,511 128.9 Other........................... 1,408 940 1,030 1,358 1,550 1,404 1,236 1,090 1,122 1,278 1,499 6.4 --------------------------------------------------------------------------------------------------------------------- Total \1\..................... 35,046 46,336 49,886 56,818 63,019 67,308 76,295 86,281 98,721 111,309 120,140 242.8 ===================================================================================================================== Per capita payment: Age 65 and over................. 3,450 5,021 5,825 6,662 7,019 7,319 7,901 8,485 8,446 8,565 8,868 157.1 Blind........................... 2,433 3,039 4,071 4,713 5,182 5,334 6,131 6,240 6,846 7,620 9,256 280.4 Disabled........................ 3,710 5,294 6,107 6,542 6,942 7,235 7,758 7,815 8,275 7,973 8,422 127.0 Dependent children under age 21. 653 623 605 709 754 825 954 975 1,042 1,034 1,047 60.4 Adults in families with dependent children............. 1,303 1,235 1,161 1,197 1,383 1,489 1,681 1,725 1,905 1,841 1,777 36.4 Other........................... 782 690 868 996 1,153 1,194 1,249 1,940 1,972 2,230 2,380 204.5 --------------------------------------------------------------------------------------------------------------------- Total, per capita payment..... 1,592 2,109 2,310 2,523 2,751 2,863 3,021 3,052 3,192 3,176 3,311 108.0 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Data includes unknowns. Note.--Total may not add due to rounding. Fiscal year 1975 ends in June; all other fiscal years end in September. Nominal dollars converted to constant dollars using CPI-U price index. Total expenditures includes other coverage groups and unknowns for fiscal year 1994. Source: Health Care Financing Administration, U.S. Department of Health and Human Services, and Congressional Research Service. TABLE 15-20.--MEDICAID PAYMENTS BY SERVICE CATEGORY, FISCAL YEARS 1975, 1981, 1990, AND 1995 [In millions of constant 1995 dollars] -------------------------------------------------------------------------------------------------------------------------------------------------------- 1975 1981 1990 1995 Average -------------------------------------------------------------------------------- annual Service category percent Amount Percent Amount Percent Amount Percent Amount Percent change 1975- of total 95 -------------------------------------------------------------------------------------------------------------------------------------------------------- Inpatient hospital........................................ $10,818 30.9 $13,747 29.7 $21,630 28.4 $28,841 24.0 5.3 General................................................. 9,659 27.6 12,253 26.4 19,582 25.7 26,331 21.9 5.4 Mental.................................................. 1,159 3.3 1,494 3.2 2,016 2.6 2,511 2.1 4.2 Skilled nursing facilities................................ 6,968 19.9 6,873 14.8 9,441 12.4 29,052 24.2 7.8 Intermediate care facilities.............................. 6,484 18.5 12,780 27.6 20,022 26.2 (\2\) (\1\) (\1\) Intermediate care facilities for the mentally retarded.. 1,088 3.1 5,103 11.0 8,651 11.3 10,383 8.6 2.5 Other................................................... 5,396 15.4 7,677 16.6 11,371 14.9 (\2\) (\1\) (\1\) Physician................................................. 3,507 10.0 3,579 7.7 4,726 6.2 7,360 6.1 4.0 Dental.................................................... 970 2.8 925 2.0 698 0.9 1,019 0.8 0.3 Other practitioner........................................ 364 1.0 388 0.8 438 0.6 986 0.8 5.4 Outpatient hospital....................................... 1,068 3.0 2,400 5.2 3,910 5.1 6,627 5.5 10.1 Clinic.................................................... 1,114 3.2 635 1.4 1,986 2.6 4,280 3.6 7.3 Lab and x ray............................................. 361 1.0 250 0.5 848 1.1 1,180 1.0 6.4 Home health............................................... 200 0.6 729 1.6 4,004 5.2 9,406 7.8 22.5 Prescribed drugs.......................................... 2,333 6.7 2,615 5.6 5,199 6.8 9,791 8.1 7.8 Family planning........................................... 192 0.5 237 0.5 312 0.4 514 0.4 5.3 Early and periodic screening.............................. (\2\) 0.0 114 0.2 233 0.3 1,169 1.0 (\1\) Rural health clinic....................................... (\2\) 0.0 7 0.0 40 0.1 216 0.2 (\1\) Other..................................................... 667 1.9 1,054 2.3 2,806 3.7 9,214 7.7 14.8 --------------------------------------------------------------------------------------------- Total \3\............................................. 35,046 100.0 46,336 100.0 76,295 100.0 120,141 100.0 6.7 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Prior to fiscal year 1991, there were two categories of Medicaid nursing home care: skilled nursing facilities and intermediate nursing facilities. \2\ 1975 data not available. \3\ Total includes unknowns. Note.--Totals may not add due to rounding. Fiscal year 1975 ends in June; all other fiscal years end in September. Spending amounts converted to constant dollars using the Consumer Price Index (CPI-U). Source: Health Care Financing Administration, U.S. Department of Health and Human Services, and Congressional Research Service. TABLE 15-21.--MEDICAID RECIPIENTS BY SERVICE CATEGORY, SELECTED FISCAL YEARS 1975-95 [In thousands] -------------------------------------------------------------------------------------------------------------------------------------------------------- Fiscal year Service category ------------------------------------------------------------------------------------------------------- 1975 1981 1989 1990 1991 1992 1994 1995 -------------------------------------------------------------------------------------------------------------------------------------------------------- Inpatient hospital: General..................................... 3,432 3,703 4,171 4,593 5,137 5,768 5,866 5,561 Mental...................................... 67 90 90 92 5,072 77 85 84 Nursing facilities \1\.......................... 1,312 1,385 1,452 1,461 1,499 1,573 1,639 1,667 Intermediate care facilities for the mentally retarded....................................... 69 151 148 147 146 151 159 151 Physician....................................... 15,198 14,403 15,686 17,078 19,321 21,627 24,267 23,789 Dental.......................................... 3,944 5,173 4,214 4,552 5,209 5,700 6,352 6,383 Other practitioner.............................. 2,673 3,582 3,555 3,873 4,282 4,711 5,409 5,528 Outpatient hospital............................. 7,437 10,018 11,344 12,370 14,137 15,120 16,567 16,712 Clinic.......................................... 1,086 1,755 2,391 2,804 3,511 4,115 5,258 5,322 Laboratory & x ray.............................. 4,738 3,822 7,759 8,959 10,505 11,804 13,412 13,064 Home health..................................... 343 402 609 719 813 925 1,293 1,639 Prescribed drugs................................ 14,155 14,256 15,916 17,294 19,602 22,030 24,471 23,723 Family planning................................. 1,217 1,473 1,564 1,752 2,185 2,550 2,566 2,501 Early and periodic screening.................... (\2\) 1,969 2,524 2,952 3,957 4,982 6,456 6,612 Rural health clinics............................ (\2\) 81 166 224 405 743 945 1,242 Other........................................... 2,911 2,344 4,583 5,126 5,957 6,702 9,908 11,416 ------------------------------------------------------------------------------------------------------- Unduplicated total........................ 22,007 21,980 23,511 25,255 28,280 30,926 35,053 36,282 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\ Prior to fiscal year 1991, there were two categories of Medicaid nursing home care: skilled nursing facilities and intermediate nursing facilities. \2\ 1975 data not available. Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-22.--AMOUNTS OF MEDICAL VENDOR PAYMENTS BY BASIS OF ELIGIBILITY AND TYPE OF SERVICE, FISCAL YEAR 1995 ---------------------------------------------------------------------------------------------------------------- AFDC Type of service Aged Blind Disabled ------------------------ Other Total Children Adults title XIX ---------------------------------------------------------------------------------------------------------------- In millions of dollars ----------------------------------------------------------------------------------- Inpatient hospital services. $2,049.8 $86.2 $11,334.9 $6,587.5 $5,544.1 $529.1 $26,131.8 Mental hospital services for the aged................... 1,124.1 0.2 44.7 8.3 1.1 12.8 1,191.2 SNF/ICF mental health services for the aged...... 25.3 0.0 5.3 91.1 0.0 0.0 121.7 Inpatient psychiatric services, aged under 21.... 0.7 0.3 487.9 587.6 13.3 162.6 1,252.3 ICF services for the mentally retarded.......... 636.9 191.5 9,488.6 46.5 3.5 7.7 10,374.7 ICF services--all other..... 1,956.4 5.0 296.1 0.2 0.9 0.3 2,258.9 SNF services................ 22,191.5 214.0 4,283.0 28.1 38.2 20.3 26,775.0 Physicians services......... 556.1 28.9 2,074.9 2,079.6 2,162.2 200.7 7,102.5 Dental services............. 61.5 1.7 180.2 547.0 201.9 23.8 1,016.0 Other practitioners services 95.8 3.5 431.7 252.8 156.2 44.7 984.7 Outpatient hospital services 534.5 25.2 2,425.9 1,862.6 1,651.8 94.5 6,594.5 Clinic services............. 258.3 30.9 2,388.7 884.9 609.0 77.6 4,249.3 Home health services........ 2,806.9 124.8 5,735.2 375.5 79.0 53.1 9,174.5 Family planning services.... 1.6 0.6 48.6 54.1 398.9 7.6 511.4 Lab and x-ray services...... 73.0 4.0 380.2 242.1 458.4 15.6 1,173.4 Prescribed drugs............ 2,861.3 69.6 4,724.7 1,116.6 939.1 63.9 9,775.3 Early and periodic screening 0.2 1.9 215.8 854.7 31.5 34.1 1,138.3 Rural health clinic services 197.3 0.5 42.3 279.3 54.3 0.7 574.3 Other care.................. 1,009.2 59.0 3,974.2 2,174.1 1,167.7 150.2 8,534.4 Unknown/error............... 1.3 0.2 7.3 1.7 0.0 0.0 10.4 ----------------------------------------------------------------------------------- Total................. 36,441.5 848.0 48,570.1 18,074.4 13,511.0 1,499.4 118,944.4 ----------------------------------------------------------------------------------- In percent ----------------------------------------------------------------------------------- Inpatient hospital services. 5.6 10.2 23.3 36.4 41.0 35.3 22.0 Mental hospital services for the aged................... 3.1 0.0 0.1 0.0 0.0 0.9 1.0 SNF/ICF mental health services for the aged...... 0.1 0.0 0.0 0.5 0.0 0.0 0.1 Inpatient psychiatric services, aged under 21.... 0.0 0.0 1.0 3.3 0.1 10.8 1.1 ICF services for the mentally retarded.......... 1.7 22.6 19.5 0.3 0.0 0.5 8.7 ICF services--all others.... 5.4 0.6 0.6 0.0 0.0 0.0 1.9 SNF services................ 60.9 25.2 8.8 0.2 0.3 1.4 22.5 Physicians services......... 1.5 3.4 4.3 11.5 16.0 13.4 6.0 Dental services............. 0.2 0.2 0.4 3.0 1.5 1.6 0.9 Other practitioners services 0.3 0.4 0.9 1.4 0.0 3.0 0.8 Outpatient hospital services 1.5 3.0 5.0 10.3 12.2 6.3 5.5 Clinic services............. 0.7 3.6 4.9 4.9 4.5 5.2 3.6 Home health services........ 7.7 14.7 11.8 2.1 0.6 3.5 7.7 Family planning services.... 0.0 0.1 0.1 0.3 3.0 0.5 0.0 Lab and x-ray services...... 0.2 0.5 0.8 1.3 3.4 1.0 1.0 Prescribed drugs............ 7.9 8.2 9.7 6.2 7.0 4.3 8.2 Early and periodic screening 0.0 0.2 0.4 4.7 0.2 2.3 1.0 Rural health clinic services 0.5 0.1 0.1 1.5 0.4 0.0 0.5 Other care.................. 2.8 7.0 8.2 12.0 8.6 10.0 7.2 Unknown/error............... 0.0 0.0 0.0 0.0 0.0 0.0 0.0 ----------------------------------------------------------------------------------- Total................. 100.0 100.0 100.0 100.0 100.0 100.0 100.0 ---------------------------------------------------------------------------------------------------------------- Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-23.--AVERAGE EXPENDITURE PER RECIPIENT BY BASIS OF ELIGIBILITY BY STATE, FISCAL YEAR 1995 ---------------------------------------------------------------------------------------------------------------- AFDC Other State Total Aged Blind Disabled -------------------- title Children Adults XIX ---------------------------------------------------------------------------------------------------------------- Alabama................................... $2,698 $6,339 $3,795 $4,534 $794 $1,920 $3,372 Alaska.................................... 3,698 10,056 7,571 11,500 2,033 2,849 - Arizona................................... 442 656 1,449 1,087 251 542 - Arkansas.................................. 3,893 7,361 6,433 7,684 1,014 1,355 3,403 California................................ 2,097 4,906 5,425 5,919 634 1,484 2,310 Colorado.................................. 3,619 8,714 27,940 9,131 1,120 1,883 - Connecticut............................... 5,588 14,373 13,890 15,512 1,286 1,966 449 Delaware.................................. 4,128 12,472 7,613 11,778 1,348 2,384 3,441 District of Columbia...................... 3,843 16,439 9,062 10,572 1,195 1,814 777 Florida................................... 2,768 7,325 4,974 6,548 1,096 1,401 1,534 Georgia................................... 2,681 5,500 10,998 6,070 1,076 2,498 3,398 Hawaii.................................... 4,983 9,002 6,215 6,837 300 416 - Idaho..................................... 3,129 10,040 8,239 8,975 846 1,889 2,129 Illinois.................................. 3,608 8,399 8,181 9,955 1,254 1,972 3,148 Indiana................................... 3,359 10,389 5,578 10,353 1,038 1,532 1,714 Iowa...................................... 3,406 7,794 4,496 9,220 1,209 1,499 959 Kansas.................................... 3,250 9,768 6,387 8,856 1,045 1,620 213 Kentucky.................................. 3,035 7,408 4,597 5,711 1,089 2,094 - Louisiana................................. 3,449 6,665 6,584 7,384 1,354 2,286 - Maine..................................... 4,965 12,738 6,486 10,043 1,502 2,349 4,966 Maryland.................................. 4,873 10,615 8,941 10,816 1,668 2,565 6,589 Massachusetts............................. 5,460 14,483 14,740 11,069 1,264 1,824 - Michigan.................................. 2,918 9,245 5,348 7,223 831 1,426 3,259 Minnesota................................. 5,386 14,311 15,901 15,765 1,172 1,799 - Mississippi............................... 2,436 5,277 3,645 4,251 938 1,826 3,424 Missouri.................................. 2,932 7,492 4,836 7,518 1,075 1,516 - Montana................................... 3,300 11,546 6,631 8,009 916 1,732 1,307 Nebraska.................................. 3,609 10,019 8,831 9,171 1,063 1,652 1,584 Nevada.................................... 3,322 6,863 6,803 8,806 1,145 2,048 9,405 New Hampshire............................. 4,880 15,559 24,356 14,570 1,377 1,735 531 New Jersey................................ 4,828 12,988 8,237 12,188 1,049 2,567 2,581 New Mexico................................ 2,491 7,110 8,608 7,685 1,067 1,730 - New York.................................. 7,276 20,431 49,636 18,713 1,964 2,727 1,939 North Carolina............................ 2,928 6,301 8,281 7,251 1,179 2,139 - North Dakota.............................. 4,839 11,176 5,837 13,713 1,156 1,805 1,487 Ohio...................................... 3,644 10,742 5,042 9,152 1,103 1,742 350 Oklahoma.................................. 2,680 6,217 3,291 6,781 1,225 1,288 934 Oregon.................................... 2,937 7,149 25,375 11,140 1,798 1,418 - Pennsylvania.............................. 3,766 11,679 4,113 6,553 1,006 1,473 1,752 Rhode Island.............................. 4,973 14,155 8,095 12,053 882 1,416 - South Carolina............................ 2,902 5,157 3,979 6,552 1,118 1,840 884 South Dakota.............................. 4,120 10,926 5,645 10,192 1,164 1,645 - Tennessee................................. 1,891 5,567 3,108 4,024 793 1,256 8,195 Texas..................................... 2,562 5,978 5,491 7,608 1,052 2,160 - Utah...................................... 2,895 9,240 6,122 9,792 1,058 2,064 13,209 Vermont................................... 3,210 9,160 6,741 9,801 999 1,448 - Virginia.................................. 2,690 6,627 5,356 6,901 904 1,662 - Washington................................ 2,285 9,572 4,428 5,384 547 1,308 4,278 West Virginia............................. 3,009 8,517 4,252 6,283 985 1,876 11,571 Wisconsin................................. 4,118 12,010 7,413 7,215 704 1,307 1,630 Wyoming................................... 3,328 8,389 1,606 10,648 1,067 2,225 2,014 Puerto Rico............................... 232 229 685 234 232 232 - Virgin Islands............................ 670 2,453 3,190 1,803 355 772 295 --------------------------------------------------------------------- United States......................... 3,405 9,265 9,298 8,523 1,076 1,824 2,382 All jurisdictions..................... 3,311 8,868 9,256 8,422 1,047 1,777 2,380 ---------------------------------------------------------------------------------------------------------------- Source: Health Care Financing Administration, U.S. Department of Health and Human Services. TABLE 15-24.--OPTIONAL MEDICAID SERVICES AND NUMBER OF STATES \1\ OFFERING EACH SERVICE, OCTOBER 1996 ------------------------------------------------------------------------ States States offering Access to offering services to include Service services to both Medicaid categorically categorically services needy only and medically to the needy uninsured ------------------------------------------------------------------------ Podiatrists' services......... 9 27 10 Optometrists' services........ 11 28 10 Chiropractors' services....... 4 20 4 Psychologists' services....... 6 20 6 Medical social workers' services..................... 1 6 3 Nurse anesthetists' services.. 8 16 5 Private duty nursing.......... 4 16 6 Clinic services............... 13 33 9 Dental services............... 11 26 9 Physical therapy.............. 10 29 6 Occupational therapy.......... 6 24 6 Speech, hearing and language disorder..................... 11 26 5 Prescribed drugs.............. 14 32 10 Dentures...................... 7 25 6 Prosthetic devices............ 14 31 10 Eyeglasses.................... 12 27 9 Diagnostic services........... 5 22 7 Screening services............ 5 20 7 Preventive services........... 6 20 6 Rehabilitative services....... 13 31 9 Services for age 65 and older in mental institutions: A. Inpatient hospital services................. 12 21 9 B. SNF services........... 9 17 6 C. ICF/MR services........ 18 22 10 Inpatient psychiatric services 12 21 9 Christian science nurses...... 1 2 1 Christian science sanitoria... 3 7 4 SNF for under age 21.......... 16 26 10 Emergency hospital services... 11 25 8 Personal care services........ 7 18 6 Transportation services....... 13 32 10 Case management services...... 11 27 8 Hospice services.............. 8 22 8 Respiratory care services..... 2 9 3 TB related services........... 1 5 3 ------------------------------------------------------------------------ \1\ Includes the territories. Source: Health Care Financing Administration, U.S. Department of Health and Human Services. ---------------------------------------------------------------------------