[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]
HEALTH COVERAGE FOR FAMILIES LEAVING WELFARE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HUMAN RESOURCES
of the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
__________
MAY 16, 2000
__________
Serial 106-111
__________
Printed for the use of the Committee on Ways and Means
U.S. GOVERNMENT PRINTING OFFICE
68-979 DTP WASHINGTON : 2001
_______________________________________________________________________
For sale by the U.S. Government Printing Office
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20402
COMMITTEE ON WAYS AND MEANS
BILL ARCHER, Texas, Chairman
PHILIP M. CRANE, Illinois CHARLES B. RANGEL, New York
BILL THOMAS, California FORTNEY PETE STARK, California
E. CLAY SHAW, Jr., Florida ROBERT T. MATSUI, California
NANCY L. JOHNSON, Connecticut WILLIAM J. COYNE, Pennsylvania
AMO HOUGHTON, New York SANDER M. LEVIN, Michigan
WALLY HERGER, California BENJAMIN L. CARDIN, Maryland
JIM McCRERY, Louisiana JIM McDERMOTT, Washington
DAVE CAMP, Michigan GERALD D. KLECZKA, Wisconsin
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. McNULTY, New York
JENNIFER DUNN, Washington WILLIAM J. JEFFERSON, Louisiana
MAC COLLINS, Georgia JOHN S. TANNER, Tennessee
ROB PORTMAN, Ohio XAVIER BECERRA, California
PHILIP S. ENGLISH, Pennsylvania KAREN L. THURMAN, Florida
WES WATKINS, Oklahoma LLOYD DOGGETT, Texas
J.D. HAYWORTH, Arizona
JERRY WELLER, Illinois
KENNY HULSHOF, Missouri
SCOTT McINNIS, Colorado
RON LEWIS, Kentucky
MARK FOLEY, Florida
A.L. Singleton, Chief of Staff
Janice Mays, Minority Chief Counsel
______
Subcommittee on Human Resources
NANCY L. JOHNSON, Connecticut, Chairman
PHILIP S. ENGLISH, Pennsylvania BENJAMIN L. CARDIN, Maryland
WES WATKINS, Oklahoma FORTNEY PETE STARK, California
RON LEWIS, Kentucky ROBERT T. MATSUI, California
MARK FOLEY, Florida WILLIAM J. COYNE, Pennsylvania
SCOTT McINNIS, Colorado WILLIAM J. JEFFERSON, Louisiana
JIM McCRERY, Louisiana
DAVE CAMP, Michigan
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C O N T E N T S
__________
Page
Advisory of May 9, 2000, announcing the hearing.................. 2
WITNESSES
Library of Congress, Congressional Research Service, Jean Hearne,
Specialist in Social Legislation............................... 14
Health Care Financing Administration, Cindy Mann, Director,
Family and Children's Health Programs, Center for Medicaid &
State Operations............................................... 25
______
Families USA, Ronald F. Pollack.................................. 36
Florida Department of Children and Families, Don Winstead........ 70
Health Management Associates, Vernon K. Smith.................... 59
Indiana Family and Social Services Administration, Kathleen
Gifford........................................................ 74
Henry J. Kaiser Family Foundation, and Commission on Medicaid and
the Uninsured, Barbara Lyons................................... 40
Mathematica Policy Research, Inc., Marilyn Ellwood............... 32
Oklahoma Health Care Authoriy, Lynn Mitchell, M.D................ 80
Stark, Hon. Fortney Pete, a Representative in Congress from the
State of California............................................ 9
SUBMISSION FOR THE RECORD
Community Legal Services, Inc., Philadelphia, PA, statement...... 91
HEALTH COVERAGE FOR FAMILIES LEAVING WELFARE
----------
TUESDAY MAY 16, 2000
House of Representatives,
Committee on Ways and Means,
Subcommittee on Human Resources,
Washington, D.C.
The Subcommittee met, pursuant to call, at 10:00 a.m., in
room B-318 Rayburn House Office Building, Hon. Nancy L.
Johnson (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY
FROM THE
COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HUMAN RESOURCES
CONTACT: (202) 225-1025
FOR IMMEDIATE RELEASE
May 9, 2000
No. HR-20
Johnson Announces Hearing on Health Coverage for Families Leaving
Welfare
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Human Resources of the Committee on Ways and Means, today announced
that the Subcommittee will hold a hearing on maintaining the health
insurance coverage of children in families leaving the Temporary
Assistance for Needy Families (TANF) program for work. The hearing will
take place on Tuesday, May 16, 2000, in room B-318 Rayburn House Office
Building, beginning at 10:00 a.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only.
Witnesses will include representatives from the Administration,
Congressional Research Service, advocates, researchers, and State
administrators . However, any individual or organization not scheduled
for an oral appearance may submit a written statement for consideration
by the Committee and for inclusion in the printed record of the
hearing.
BACKGROUND:
In 1997, after an increase of about 4.5 million in the previous
five years, the number of children on Medicaid dropped. Observers
studying this drop in children's enrollment have determined that it may
be associated with the replacement of the Aid to Families with
Dependent Children (AFDC) program by the TANF program in 1996. Before
1996, families qualifying for the AFDC cash welfare program were
automatically enrolled in Medicaid in nearly every State. But as States
transitioned from the AFDC program to the new TANF program beginning in
1996, the welfare rolls declined rapidly. By 1997, they had declined by
over 20 percent and by the end of 1999, they had declined by over 50
percent. Given the close link between enrollment in the cash welfare
program and enrollment in the Medicaid program, the decline in Medicaid
rolls after implementation of the TANF program may not be surprising.
However, the welfare reform law included a requirement that States
delink the eligibility process for cash welfare and Medicaid and
required States to provide transitional Medicaid to individuals leaving
welfare for work.
Recent studies have shown that States can take a series of
administrative actions to halt and even reverse the decline in
children's Medicaid enrollment. These administrative actions include
ensuring that the families leaving the welfare rolls understand that
they are still qualified for Medicaid, making continued enrollment in
Medicaid as family-friendly as possible, sending clear and simple
notices about eligibility and application requirements to families, and
making announcements and forms available in Spanish and other
languages.
In announcing the hearing, Chairman Johnson stated: ``When we
passed the 1996 welfare reform law, we were intent on ensuring that
children would remain eligible for health coverage after their mother
left welfare for work. Now we must be certain that States are
implementing the Federal statutes so that children actually receive the
coverage to which they are entitled. Our hearing will show that several
States have already implemented programs that achieve this very
important goal.''
FOCUS OF THE HEARING:
The hearing will examine the recent decline in children's
enrollment in Medicaid and the successful policies that selected States
are now implementing to reverse the decline.
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noted above.
Chairman Johnson. Good morning. The purpose of today's
hearing is to review whether children whose mothers leave
welfare are getting the Medicaid coverage to which they are
entitled and, if not, to examine policy and programs to ensure
that these children continue to receive Medicaid.
Our previous hearings have established that since the
enactment of the 1996 welfare reform law, the rolls of TANF
have declined steadily, that employment by single mothers,
especially never-married mothers, has increased greatly and
that poverty has declined every year since 1995. But our
hearings have also suggested that many eligible children are
not receiving Medicaid or food stamps. Thus, we want to conduct
this hearing to focus on documenting the Medicaid problem and
on possible solutions.
Let me state clearly that I think the Federal statutes are
not the problem. Chairman Bliley, John Chafee and I, including
many others, worked very hard to ensure that no child would
lose Medicaid coverage as a result of the welfare reform. I
have not seen evidence that the reason for declining enrollment
of children is flaws in the Federal statute but, just in case,
we have asked Jean Hearne of the Congressional Research Service
to begin our hearing by reviewing the criteria.
We are also fortunate to have a panel of highly qualified
witnesses to describe what has happened at the State level to
contribute to these declines.
If I have read the reports correctly, the major causes of
the decline are administrative. Some people that would have
entered welfare in the past do not now often even join the
rolls, and many others have left after fairly short stays. It
is more difficult to ensure that these families know they are
eligible and to track them so that they can be helped to
maintain their eligibility.
We have invited States that have taken the strong
administrative action necessary to ensure that families know
that they are eligible and that State procedures make it as
easy and convenient as possible for them to apply for Medicaid
and maintain their eligibility once they join the rolls. As we
will see, these States--Florida, Indiana and Oklahoma--have
shown that aggressive State action can increase the number of
children getting coverage.
I am happy that the administration is here, because I want
to know what can be done by the Federal Government to ensure
that all States produce the results that Florida, Indiana and
Oklahoma have achieved. More specifically, we want to know if
the administration has demonstrated adequate leadership on this
issue and whether there are specific actions the administration
should be taking to increase children's Medicaid enrollment.
The problem of declining Medicaid enrollment is very, very
important and, as this hearing will show, can be solved.
A major reason for conducting this hearing is that Ben
Cardin and I want to bring national attention to the actions
that must be taken at the State and Federal level to ensure
that children continue to get Medicaid coverage. Only by facing
up to the Medicaid problem and solving it can we be certain
that the 1996 welfare reform law will continue to fulfill its
problems. Ben.
May 15, 2000
Ms. Nancy-Ann Min DeParle
Administrator
Health Care Financing Administration
200 Independence Ave., SW
Washington, D.C. 20201
Dear Administrator DeParle:
The nation's Governors consider health insurance a critical support
for helping low-income families succeed in the workplace by remaining
healthy, employed, and on a path toward career advancement. We
recognize that not all families leaving welfare for work start in jobs
that offer a health insurance benefit or can afford the coverage
sponsored by their employers. Thus, Governors have implemented
strategies to inform Medicaid-eligible families leaving welfare, as
well as those not in contact with the welfare system, about Medicaid's
availability and how to apply. States have also taken steps to ensure
the timely and accurate redetermination of families who continue to
qualify for Medicaid coverage. We would like to share some of these
state approaches with you and have attached information prepared by the
National Governors' Association that describes some of the activities
underway.
We also appreciate the attention the Health Care Financing
Administration has given to this issue through its efforts to identify
promising state practices for Medicaid redetermination and broader
Medicaid enrollment activities. You may be aware that the Kaiser
Commission on Medicaid and the Uninsured recently released data showing
an increase in Medicaid enrollment by 1.4 percent, or 320,000 people,
between June 1998 and June 1999. There is also evidence to suggest that
for every child now enrolled in the State Children's Health Insurance
Program, states are enrolling another child in Medicaid. Thus, about 4
million more children have access to health insurance coverage today
than in 1997. Governors' strong efforts can certainly be attributed, at
least in part, to the Medicaid program's continuous enrollment climb.
The ``delinking'' of the Medicaid and Temporary Assistance for
Needy Families (TANF) programs under the welfare reform law of 1996 was
an added challenge and one states have been working diligently to
address. Many states updated their automated eligibility systems,
retrained frontline TANF and Medicaid staff, and expanded outreach and
promotion efforts to accurately enroll eligible families in the
Medicaid program who may have been inadvertently overlooked as a result
of delinking.
Governors' hard work has been paying off and we believe this will
be demonstrated in the attached descriptions. Please keep in mind that
this is by no means a comprehensive list of all initiatives underway,
nor is it a prescription for state policy and practice. Rather, it
presents a sampling of strategies states are implementing and options
for those considering similar efforts.
Once again, we appreciate your efforts to make access to Medicaid
for eligible low-income families a priority. We look forward to our
continued joint commitment to address issues surrounding TANF/Medicaid
delinking and to find ways to make the lack of health insurance less of
a barrier for low-income working families.
Sincerely,
Raymond C. Scheppach
Aggressive State Actions Contribute to Rise in Medicaid Enrollment
Governors ``efforts to insure children and families are reaping
results. A study released last week by the Kaiser Commission on
Medicaid and the Uninsured showed Medicaid enrollment increasing by 1.4
percent, or 320,000 people, between June 1998 and June 1999. There is
also evidence to suggest that for every child now enrolled in the State
Children's Health Insurance Program, states are enrolling another child
in Medicaid. Thus, about 4 million more children have access to health
insurance coverage today than they did in 1997. And, Governors'' strong
efforts can be attributed, at least in part, to the Medicaid program's
continuous enrollment climb.
Following the ``delinking'' of the Medicaid and Temporary
Assistance for Needy Families (TANF) programs, many states enhanced
their Medicaid outreach and enrollment efforts, as well as exercised
new policy options to enroll more families in the Medicaid program. The
welfare reform law of 1996 severed the link between Medicaid and
welfare eligibility that, under the prior Aid to Families with
Dependent Children (AFDC) program, meant all individuals receiving
welfare payments were automatically eligible families who left TANF
retained coverage, as well as make coverage available to qualified low-
income families who were never in contact with the welfare system,
states continue to take steps to improve their Medicaid enrollment
processes, expand Medicaid promotional efforts, and align Medicaid
policies to better parallel welfare reform ``work first'' goals. Some
states have even expanded Medicaid eligibility to cover more low-income
working families who are not offered health insurance by their
employers. Others partially subsidize employer-sponsored insurance for
low-income working families who cannot afford the premiums or co-pays.
Governors consider health insurance to be a critical support for
keeping families healthy and on the job, and they are taking innovative
steps to ensure eligible families receive Medicaid coverage.
Some approaches states are taking to ensure that lack of health
insurance coverage does not pose a barrier to self-sufficiency include:
easing the Medicaid application and redetermination
processes;
expanding health insurance outreach and promotional
campaigns;
helping employers inform workers about Medicaid;
updating and streamlining computer eligibility systems;
training agency staff to improve Medicaid (TMA);
covering employer-sponsored health insurance premium
through Medicaid;
paying employee shares of employer-sponsored coverage with
TANF maintenance-of-effort (MOE) funds; and
Offering Medicaid to more low-income working families with
children.
Easing the Medicaid application and redetermination
processes. Many states are simplifying Medicaid application and
redetermination processes to ensure families are not discouraged from
seeking Medicaid because of complicated enrollment procedures. States
are also working to guarantee that eligibility is redetermined
accurately and in a timely manner. For example, Massachusetts
administers a shorter, four-page mail-in application for its Mass
Health program Arizona, Kansas, and Vermont are some of the states that
no longer require Medicaid recipients to meet face-to-face interviews
when reenrolling children in Medicaid.
Expanding health insurance outreach and promotional
campaigns. Most states promote Medicaid availability and how to apply.
These outreach efforts include billboards and posters placed where
eligible families are most likely to see them; print media, radio, and
television public service announcements; information distributed
through public and private providers of social services, child-care
providers, schools, and employers; and Medicaid staff made available to
enroll people at community events. Delaware sends Medicaid staff to
enroll eligible families at community fairs, festivals, hospitals,
medical centers and correctional facilities.
Helping employers inform workers about Medicaid.
Employers, particularly small businesses and firms that employ
individuals at relatively low wages, may find financing employee health
care to be extremely costly. However, many of these employers may hire
employees who are eligible for transitional Medicaid (TMA) or that have
children who qualify for the State Children's Health Insurance Program
(SCHIP) or another poverty-related Medicaid category. Minnesota informs
employers about Medicaid availability through mass mailings,
presentations to small businesses, and job expos, information provided
to recently laid-off employees, paycheck inserts, and other activities.
Updating and streamlining computer eligibility systems.
Many states are updating their information systems to improve the
extent to which potentially eligible low-income families who are either
outside the welfare system, diverted from welfare, or have had their
welfare case closed due to increased earnings or another reason, are
accurately identified for and enrolled in Medicaid. For example,
Georgia's online System for the Uniform Calculation and Consolidation
of Economic Support Services (SUCCESS), screens for an applicant's
potential eligibility for Medicaid, TANF, and food stamps all at once.
If an applicant is ineligible for one category of Medicaid, SUCCESS
will automatically identify other Medicaid categories in which the
family may qualify.
Training agency staff to improve Medicaid enrollment. Some
states are using Medicaid staff to crosstrain staff in other agencies,
one-stop career centers, community health clinics/treatment centers,
homeless shelters, and other locations on how to link qualified
individuals with health insurance coverage. For example Indiana
retrained TANF eligibility determation staff on the importance of
ensuringthat families eneroll in TMA after they leave cash assistance.
As a result, many local offices increased their followup of families
missing redetermination appointments.
In additin to improving Medicaid outreach and enrollment
procedures, several states are also revising Policies to help low-
income working families obtain health insurance.
Lengthening the period families can receive transitional
Medicaid. States are using the new flexibility in the welfare law to
lengthen the period a family may receive Medicaid after going to work
by disregarding a portion of their earnings from the eligibility
calculation. For example, a state could disregard all of a Medicaid
recipient's earnings below a certain level (such as the poverty level)
for a limited period of time (such as six months). Once this period
expires, a family becomes eligible for an additional twelve months of
TMA. New Jersey, North Carolina, and South Carolina are a few of the
states that have disregarded certain levels of income to provide TMA
for an additional 12 months.
Covering employer-sponsored health insurance premiums
through Medicaid. Some states developed programs under Section 1115
waivers to subsidize employer-provided health care for families who
cannot afford the premiums for health insurance offered at work. In
January 1999, Massachusetts expanded its MassHealth program under a
Section 1115 Waiver to assist low-income working adults with incomes up
to 200 percent of the federal poverty level (FPL) to purchase their
employers' health insurance provided they are working for an employer
with fifty or fewer full-time employees.
Paying employee shares of employer-sponsored coverage with
TANF MOE funds. While federal TANF funds cannot be used for medical
services does count toward the TANF maintenance-of-effort (MOE)
requirement if it is consistent with a TANF purpose (such as supporting
work). A state, therefore, could pay the employee share of employer
based health insurance for some period of time or up to a specified
income level for former welfare recipients or even needy families (as
defined by the state) who have never been on welfare. For example,
under its new TANF state plan, West Virginia will provide a maximum
subsidy of $125 a month to help former West Virginia Works Works
recipients with incomes below 185 percent of the FPL who exhaust their
TAM purchase health insurance coverage through ther employer for
themselves and their spouses.
Offering Medicaid to more low-income working families with
children. A few states are using welfare law flexibility to expand
coverage to include low-income working families outside of welfare
programs who lack affordable health insurance. This is achieved by
providing more generous earnings disregards not only for Medicaid
recipients but for applicants as well so that a family that is already
working may apply and be eligible for Medicaid. In fall 1998, Rhode
Island's Medicaid program, Rite Care, began disregarding income so that
working parents with incomes up to 185 percent of the FPL would be
eligble. The District of Columbia's DC Healthy Families program
provides coverage for parents and children with incomes up to 200
percent of the FPL.
Governors are taking the lead to ensure eligible low-income
families have access to Medicaid through a wide range of initiatives,
including eligibility determination, staff training, systems
enhancements, and outreach. They are also finding ways to make lack of
health insurance less of a problem for some low-income families by
partially offsetting employer-offered insurance or expanding temporary
eligibility for Medicaid. With such efforts to improve Medicaid access
taking place across tha nation, the trend in rising Medicaid enrollment
is likely to continue.
***The NGA Center for Best Practices will publish a report
presenting more detailed policy and program options and state examples
for improving access to Medicaid and transitional Medicaid in the next
month.
Mr. Cardin. Thank you, Madam Chair. Thank you very much for
holding these hearings.
We have talked on many occasions about our concern that
those eligible for Medicaid be, in fact, enrolled in the
Medicaid Program, and when you take a look at what has happened
since welfare reform on Medicaid enrollment, it leads you to
just one conclusion and that is that the number of children who
are eligible for Medicaid has declined as a result of the
Welfare Reform Act, that there is a relationship between
welfare reform and the number of children who are covered by
Medicaid.
The number of poor children covered by Medicaid declined by
1.3 million between 1996 and 1998, down from 9.1 million to 7.8
million. This decline far exceeds the reduction in child
poverty over the same time period or the various projections on
how many children would be eligible for Medicaid coverage. And
when you take a look at those that have traded welfare for
employer-based coverage there has not been the equivalent
increase. Nearly 30 percent of the children leaving TANF were
uninsured within 11 months of exiting the rolls. The vast
majority of these children were statutorily eligible for
Medicaid.
Now, when you take a look at what has happened around the
Nation, I am sure that in some States this has happened because
of neglect. They have not spent the resources or changed the
computer programs or went through all that was necessary to
make sure that we didn't lose children eligibility in Medicaid
as we implemented the welfare reform proposals. Considering the
fact that Congress provided 90 percent of the Federal match for
States' expenditures associated with delinking Medicaid and
TANF eligibility, this lack of oversight is particularly
disconcerting. Other States, I am sorry to observe, I think
intentionally went in the wrong direction by linking the
eligibility criteria for TANF, Medicaid and food stamps, which
is clearly inappropriate.
Madam Chair, in regards to your comments that the Federal
Government doesn't share in some of this responsibility, let me
make an observation I think that we do have some culpability in
this area. When you look at what we have done with immigrant
families in this Nation, I think we have intimidated a lot of
people in applying for benefits that they are entitled to.
Also, I must say that the Federal eligibility critical for
Medicaid has become increasingly complex over this period of
time. For example, families that leave welfare for work only
receive their second 6 months of transitional Medicaid if they
prove they have incomes of less than 185 percent of the poverty
level. This additional redetermination places one more barrier
between families and health coverage. It serves little purpose,
since very few welfare leavers have obtained incomes twice the
poverty level within a year of exiting public assistance.
Madam Chair, 3 years ago, Congress passed the CHIPs program
on a bipartisan basis to ensure that needy children have access
to health care. We need to work to ensure that welfare reform
does not undercut that critical goal.
Madam Chair, let me just say I look forward to all of the
witnesses that are going to be testifying today, but I
particularly want to welcome our colleague and friend Pete
Stark. He has been one of the real champions in this Congress
about providing universal health coverage for children, and I
certainly agree. My only objection is it should be universal
coverage of health insurance, period.
I look forward to hearing from all of the witnesses today
so that we can try to develop strategies that work, look at
some of the States that have been successful in getting more
children enrolled in the Medicaid Program that are eligible,
and try to come out with some bipartisan recommendations to
make sure that more of our children are covered by health
insurance.
Chairman Johnson. Thank you.
Mr. Stark, it is a pleasure to have you on that side of the
table.
STATEMENT OF HON. FORTNEY PETE STARK, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Stark. Thank you, Madam Chair. Thank you for this
hearing and allowing me to have an opening statement and,
indeed, to testify.
My temptation would be--to remind some of my colleagues
that I was one of, I guess, four or five--all but one Democrat
who opposed this welfare reform bill, and in the department
probably three of the leading experts in welfare in the country
resigned from our President's administration in protest to his
signing it. But that is done, and it is the law of the land,
and I don't think that is the issue--the underlying focus of
the welfare reform bill I don't think is the issue.
The focus of the welfare reform bill was on adults, and it
ran all of the way from the extreme, I suppose, from people who
felt that adults who accepted welfare have the wrong religion
or they are bad people to extreme liberals like myself who
think that we ought to give everyone a guaranteed minimum
income as President Nixon first suggested and then we would not
have this problem.
Somehow, the topic of children got lost in all of that, and
I am going to suggest this morning that it doesn't make any
difference. Children are not shiftless by birth, and they don't
make the decisions, and they are not responsible for their own
health insurance, and you can go on. The kids are a by-product
of whatever we have done, for better or worse.
And I don't think that there is any quarrel here, just a
couple of things that I think we can agree on. I don't think
that anybody in this room disputes that in today's delivery of
medical care to not have insurance or be part of a program
means you don't get first-rate medical care. You may get it
later at the emergency room. But I think to be uninsured or
outside of a program like the military or some other program is
to infer that a child does not get proper medical care.
And I would further ask you to stipulate with me that every
dollar we can spend in the first couple years of a chilled's
life in the aggregate will save the community $5 between the
time they are 3 and the time they are 20.
Now the unfortunate thing is that we can't get any budgets
going for that, but I don't think that there is a physician or
a person that is involved in health care work that denies that
we save money as a community. The trouble is that we are not
required by law to pay for it, so we don't get a budget saving.
Now we get into an area where there may be some
disagreement, and you will hear a lot of witnesses talk a lot
today about why kids--why there are more uninsured kids or, if
there are not more, I don't think that we are going to get any
argument that there are somewhere around 10 or 11 million kids
without health insurance. Is that growing or declining? Either
way, it is a little bit----
The bad number is that there are 10 million, give or take a
million, kids out there without insurance today. Regardless of
who their parents are or regardless of how you feel that the
government should intrude in their lives, that is not a good
thing for our society. It is going to cost us money as a
society. It is going to cost us productivity. Because kids who
are sick don't learn, as well as a whole host of things that we
know are wrong.
And I am going to suggest that maybe this is a systemic or
a problem that we can't resolve through a bunch of legislation.
We have the CHIP program to see if we can bring kids in, and it
hasn't worked. I have 15,000 kids in my district or the county
in which my district resides and--who are eligible, we
estimate, for CHIP; and we have only have a thousand signed up;
and we can't find the other 14,000. I hear bad program, the
social service is not doing it, a lot of immigrant families--I
have heard all of the excuses. Nonetheless, I still have 14,000
kids not in the program.
But let's go to us old folks. In SSI we probably don't have
half--Ron can give me the number. How many eligible for SSI
participate? Not half. And we have Social Security writing
Medicare books at a 4th grade level because that is the level
that they think the understanding is.
In the QMB/SLMB plan, 60 percent of those eligible get
their Medicare extra benefits. These are seniors who arguably
ought to be able to read by the time they are 65. And out of
the SLMB, which is the people between 100 to 120 percent of
poverty, only 10 percent of those eligible are signing up. Does
it come as a great surprise that maybe we are not signing up
all eligible kids?
For whatever reason, and it is not just Federal Government,
some States do better. New York basically kicked kids out of
Medicaid when they shouldn't have. So you can look around and
you will hear from the administration and other bureaucrats
today who say it is everybody else's fault. Fault is a useless
concept in this regard.
There are 10 million or 11 million kids without insurance.
I think we can do something about that. It may not take the
form that I am about to suggest to you, but I want to suggest
its fundamental concept is something that this Committee might
consider.
Senator Rockefeller and I have introduced a bill called
Medikids, something like that. Very catchy, Medikids. And it is
basically Medicare for all children, but the concept grew this
way. We said we are messing around with all of these programs
to try to get kids insured, and it isn't working. How about we
just say that every child, when the child is born, is in a
program.
Now, I can hear my good friends on the right saying, whoa,
that is Big Brother in spades, and it is. But this is merely a
question of identifying that each child gets medical care
because--first of all, you charge the parents. Without going
into details of what Medicaid is, the idea is that it is the
ultimate safety net. If the parents have group health
insurance, the kids are out of it.
It is done through the Tax Code, so you can do it for every
month or every day that the kids have other insurance, the
parents don't have to pay. I think it is $20 a month per child.
That pays a quarter of the child. The cost is a thousand bucks
a year on average per child to give them, basically, Medicaid-
type benefits.
We say, wait a minute. If the parents have group insurance
where they work, as I do with Federal employee benefits, I just
tack that onto my tax return, and I reduce the thousand dollars
or the $20 a month that I would otherwise pay. If I am out of
work for 6 months during the year, my insurance drops, my child
automatically goes back into the Medicaid Program during that
period. It is the ultimate fail-safe for a child without other
insurance being in a program.
It doesn't cost much the first year because we phase ours
in starting with all of the children born the first year. The
second year, we take all of the kids born and 2 years old. So
it costs a half billion the first year. The kids pretty much
divide up into $500,000. It costs $500 million the first year,
and so at the end of the 20th year, you are spending $10
billion a year. Yes, that costs, and that is the share that the
parents are not paying through a premium.
We could vote tomorrow to waive the phone tax and darn near
pay for this for a long time, just to show you that it would be
pretty easy to pay for it, and I have not had one letter of
complaint in the almost 30 years I have been in Congress about
the phone tax. We are going to waive it tomorrow, and I am just
suggesting that there is money around at the level of this
amount if we want to fund health insurance for kids.
But I want to come back to the underlying concept, and that
is that all the programs that we have that require application,
almost every child that goes into an emergency room gets into
the CHIP program because the hospitals are really tough about
making sure that they get paid. So they find out whether the
child will qualify and the parents qualify and get them
admitted.
But whether we do it through schools or States or counties,
it doesn't work. It doesn't work for SSI, it doesn't work for
QMB or SLMB. In every one of those cases, you can say, they are
adults. Why should we be Big Brother?
I am not sure that we have to say that for children. I
think perhaps on a bipartisan basis we can say that's OK.
Children--we don't punish them. They are not at fault. If there
is a reason to have a social contract and it saves the country
money----
So I guess what I am saying is, whatever we do, could we
make the enrollment of children in this program automatic so
that the default is that the child has the insurance and then
they have to get out through private insurance or otherwise?
And that, basically, is the basis of what I am urging on my
colleagues today.
We can solve this problem. I don't think we are going to
solve it with a new kind of rule or program or getting after
whether it is Health and Human Services or whether it is the
State Social Services Commission. Whether it is in Louisiana or
Wisconsin or Maryland or Connecticut, I don't think--it differs
in every state. We could resolve that problem somehow right
here if we could come forward with a program that says from the
git-go every child is in. Now State, you get them out. That is
a different issue, and that is the basis of my testimony.
Thank you for letting me plead my case, Madam Chair.
[The prepared statement follows:]
Statement of Hon. Fortney Pete Stark, a Representative in Congress from
the State of California
Madam Chairman and Members of the Subcommittee:
Families leaving welfare for work are among the
most vulnerable in America. They deserve the best we can give
them. Yet study after study shows that states have not done
well by these fragile families, particularly when it comes to
Medicaid.
A 1999 Families USA study found that as of 1997,
an estimated 675,000 parents and children lost Medicaid
coverage and became uninsured as a consequence of welfare
reform. An October 1999 report by the Center on Budget and
Policy Priorities found that between 1996 and 1998, the number
of poor children covered by Medicaid fell by 1.3 million, with
only about half of that decline attributable to the drop in the
number of children living in poverty. And from 1995 to 1998,
monthly Medicaid enrollment declined by 12% in California, 18%
in Florida, and 29% in Wisconsin, according to work by Marilyn
Ellwood of Mathematica policy Research.
We also know that overall, the number of children
who have any source of health insurance is not increasing, a
despite enactment of the State Children's Health Insurance
Program in 1997.
Some of the witnesses today will point out that in
some states, Medicaid enrollment drops appear to be slowing or
halting. But will 11.1 million children lacking health
insurance in 1998 and far higher rates of uninsurance among
non-elderly adults, we still have a long way to go.
Advocates and researchers point out that virtually
all children in families leaving welfare remain eligible for
Medicaid or CHIP, as do many of their parents. This is because
most states now extend coverage to children in families with
incomes up to 200% of the poverty line, and most families
leaving welfare are taking low-wage jobs that are well below
this level, Also, parents taking low-wage jobs that do not
offer health insurance should remain eligible for Transitional
Medicaid coverage. But many are instead being erroneously
terminated.
Many of these terminations appear to be a case of
benign neglect by states. Advocates charge they have failed to
adequately train caseworkers, provide information to
recipients, or revise computer systems on the issue of
continuing Medicaid eligibility for individuals leaving,
losing, or in some cases, being diverted from cash welfare.
There is no good excuse for these failures, since
the 1996 welfare law provided states with $500 million to help
them figure out how to delink the AFDC program is extremely
generous, at 90%, states have still drawn down only $125
million of this funding. This suggests that the Administration
needs to require that this money gets spent on programs that
result in clear information being disseminated to families
about their Medicaid eligibility, that streamline application
procedures, and that make parents aware that even if they
become ineligible for Medicaid assistance, their children in
all likelihood can continue to be covered.
Advocates are finding that in too many cases,
caseworkers are not telling families that they are still
eligible for Medicaid even if they are not receiving cash
assistance. Under law, families have a right to file a Medicaid
application and have it processed within 45 days. This
information should be made part of the standard,routine
assessment of all families who are leaving welfare, Local
welfare offices have a fundamental responsibility to get this
basic information out to all families, many of whom have heard
about the welfare law's restrictions and assume they also apply
to Medicaid.
On the issue of improper diversion, the infamous
New York City experience simply must not be repeated or
tolerated. Until advocates raised concerns, city officials were
effectively prohibiting individuals applying for cash
assistance from also applying for health insurance and food
stamp benefits during their first office visit. This illegal
and thoroughly despicable practice was only stopped when a
judge issued an injunction ordering the city to cease and
desist.
The consequences of failing to ensure that
eligible families continue to have coverage under Medicaid are
serious, because these individuals are at high risk of becoming
uninsure. Analysis by the Center on Budget and Policy
Priorities that is based on state leaver studies finds that in
most states, fewer than one in six children and parents who
have left welfare are enrolled in private coverage. These
studies also show that more than one in five children are
uninsured after leaving welfare. The situation for their
parents is worse, with close to half of parents in leaver
studies lacking coverage. This results in unmet medical needs
that are documented in some of the state leaver studies. This
results in unmet medical needs that are documented in some of
the state leaver studies.
The federal government has an obligation to
reverse these dismal trends. And while there are many ways of
making incremental improvements, such as guaranteeing
transitional Medicaid for a full year, there are also bolder
steps that we can take.
For our kids, I believe that the most
straightforward way to accomplish the goal of providing all
children with health insurance is to create a federal fallback
program for all children who have no other source of coverage.
That's the aim of a proposal I introduced on May 4 with Senator
Rockefeller, the ``MediKids Health Insurance Act of 2000.''
It's a simple bill that would provide children not enrolled in
any other health insurance program with benefits that would be
similar to those available to children under Medicaid now.
Children could still get their health benefits through their
parents' employer, Medicaid, or CHIP. But all children would
have the permanent safety net of the MediKids program.
I hope that my colleagues on both sides of the
aisle will join me in support of this proposal, which over time
could become a universal health insurance program for children
like Medicare is for seniors and desabled people.
Thank you for allowing me to testify today.
Chairman Johnson. Thank you. I think the concept of opt-out
rather than opt-in is an interesting one. I think we have to
have that choice in Medicaid rather than Medicare because the
coverage is broader in Medicaid.
Mr. Stark. Our bill is the Medicaid benefits. And we
anticipate, quite frankly, the kids would drop out of Medicaid.
It would eventually go away and become this by default.
Chairman Johnson. You have the additional problem of how
much you draw family coverage out from under the private
sector. My experience with Medicaid as a program to provide
health insurance for children has not been encouraging, and the
depth of the antagonism of working parents to have their kids
in a federally funded program has surprised me. When we visited
Florida, this Subcommittee, we asked the workers specifically
about that, and they preferred to wait until they could qualify
for their employer-provided plans.
We have taken quite a bit of time, and I don't want to
defer the other panels, but these are the kinds of problems
that we would have to deal with to go to an opt-out.
Mr. Cardin. If the Chair would yield, the next witness will
be testifying that 55 percent of the Nation's children who live
in poverty are covered by Medicaid--which means 45 percent are
not. An overwhelming majority of those kids are not covered by
any other insurance. It underscores when you have an
affirmative obligation to enroll there are an awful lot of
children that are not getting covered. It underscores the
importance of your testimony.
Chairman Johnson. Mr. Watkins.
Mr. Watkins. I would like to say, Madam Chair, I
understand, and I have been going through an experience
somewhat by choice. And I say that because my wife and I just
brought a little family up to our area, two daughters, 4 and 6.
I thought it would be great if we would help them get a job
where they had health care, and we did. We got them a job. I
even signed them a note to try to get them a place to live so
they can start having a home. They were there less than 2
months, and this past month they made the decision that they
were not going to be there. This is the first time these
children had insurance. It is the first time--we would have
seen that they got a college education. But they opt out to go
back.
Let me say I grew up in dirt-poor poverty, and I understand
lots of time the thinking, but I don't know, a lot of it is by
choice. I don't know how we work that through. Because little
Jeanette and little Isabel, their future is really going to be
affected.
Mr. Stark. But it wasn't the kids' choice.
Mr. Watkins. But the parents' choice. They had no care or
concern for their own children. They had a home and health
insurance coverage--for the first time ever. It was the parents
that just----
So I don't know how you get there sometimes with a lot of
this. You want to make sure you are able to help lift them out
of this living condition, you know. Are you poor white trash?
We all know education is the greatest way to lift people out of
poverty, so if you can just make it so that they don't want to
get out of it--you have to have some kind of incentive for them
to come out of it. I don't know. My wife and I work with all
kinds of situations.
Mr. Stark. My only sense is, if we can't deal with the
parents, ought we to punish those kids if we can provide them
health insurance for the kids or health care. Think of it that
way. We require that they be vaccinated if they go to school.
Put the parents aside. For whatever reason, the parents are not
fulfilling the role as you and I see it. But I don't think
anyone of us would disagree that we would prefer that those
kids got medical care.
And I am suggesting a structure so that the parents don't
have to apply. If they are kids and they are there, they have
got a way to get their medical care so when they walk into a
clinic the clinic knows that the little kids--they know that
there is health insurance there so they get their vaccination
or treatment.
Mr. Watkins. I see where you are coming from, but the
incentive for them to get out of it, for the parents to want
them to get out of that condition--I want to help them crawl
out of that, and I can work with you to try to figure out a
way. Thank you.
Chairman Johnson. Thank you.
I would like to call Jean Hearne, Specialist in Social
Legislation, Congressional Research Service.
I want to say that the law does currently actually require
States to cover--which means to me that the States could be
registering at birth if they wanted to--requires States to
cover all children under age 6 and any pregnant woman up to 133
percent of poverty and all children up to 17 under a hundred
percent of poverty. Next year, it will be 18 and after that 19.
There is a mandate in place, and to some extent we are
struggling with the problem of mechanisms rather than statute.
STATEMENT OF JEAN HEARNE, SPECIALIST IN SOCIAL LEGISLATION,
CONGRESSIONAL RESEARCH SERVICE, LIBRARY OF CONGRESS
Ms. Hearne. Good morning, Chairman Johnson and Members of
the Committee. My name is Jean Hearne, and I am a Specialist in
Social Legislation of the Congressional Research Service. This
morning I am going to provide a brief overview of the major
ways in which children can obtain coverage under the Medicaid
Program.
The Medicaid Program offers a generous package of health
care services for certain groups of low-income persons.
Historically, program eligibility was linked to actual or
potential receipt of cash assistance under a welfare program.
However, beginning in the eighties, through a series of
legislative changes, the Medicaid Program was expanded to
provide protection for other groups of individuals with no ties
to the welfare system. This trend culminated with the 1996
welfare reforms that formally delinked eligibility for Medicaid
from the receipt of cash assistance for certain covered groups.
The requirements of Federal law, coupled with decisions by
individual States in structuring their Medicaid Programs,
determine who is actually eligible in a given State. In
general, Federal law places limits on the categories of
individuals that can be covered and establishes specific
eligibility rules for each category. Over 50 distinct
population groups are included in the law as potentially
eligible.
Within these parameters, States are given additional
options. In 1998, States reported that the Medicaid Program
covered 20.8 million children and young adults under the age of
21. This group includes 55 percent of the Nation's children who
live in poverty and about 19 percent of all children in the
U.S.
The primary pathways to Medicaid for low-income children
are the following four:
First, children and families who meet the financial and
categorical rules under the State's former AFDC Programs in
effect on July 16, 1996, are eligible for Medicaid even if they
do not qualify for cash grants under the new TANF programs.
This categorical group was created as part of the welfare
reform legislation to ensure that all low-income families that
would have qualified for Medicaid under the old AFDC Program
continue to qualify for Medicaid after welfare reform. States
were given the flexibility to alter the income and resource
standards and methods; and, as of 1999, a number of States have
done so in order to realign Medicaid eligibility with
eligibility for the new TANF programs.
The second major pathway is children receiving Supplemental
Security Income. Subject to one important exception, States are
required to cover all children receiving SSI, a major pathway
to Medicaid coverage for children with special health care
needs. The major exception occurs in so-called 209(b) States.
Those States use more restrictive income or resource standards
or definitions of disability than are used in the SSI Program.
If a State chooses the 209(b) option, it must also allow
individuals to spend down into Medicaid eligibility by
deducting incurred medical expenses from income. In 1998, 11
States had elected the 209(b) option.
The third major pathway to Medicaid for children is through
one of the three poverty-related groups. These are children who
qualify for Medicaid even though they are not enrolled in TANF
or SSI.
First, States are required to cover children under age 6
and pregnant women who are in families with income below 133
percent of the poverty level.
The second poverty-related group is a mandatory coverage
group for children under the age of 17 living in families with
income below poverty. This group is being phased in 1 year at a
time so that all children under 19 and living in poverty will
be eligible for Medicaid in 2002.
The last poverty-related group is an optional group of
infants and pregnant women in families with income below 195
percent of poverty. Last year, 41 States and the District of
Columbia chose to extend coverage to some or all pregnant women
and infants in that category.
The final major pathway is through section 1902(r)(2) and
section 1115 demonstration waivers. Section 1902(r)(2) is a
Medicaid provision that allows States flexibility in defining
methods for counting income and resources for some categories
of Medicaid eligibles. Section 1115 demonstration waivers allow
States to test new approaches for providing health care
coverage. While the two provisions are very different from each
other, they bear one major similarity. They are used by States
to allow a significant number of individuals to obtain Medicaid
coverage who would otherwise not qualify for the program.
In 1999, there were 26 States altogether that have extended
Medicaid to some children in families with income or assets too
high to otherwise qualify through the use of one of those
provisions.
While the four pathways I described represent the major
routes to Medicaid eligibility for children, there remain a
number of other eligibility categories in use by States through
which smaller numbers of children obtain their benefits. Many
of those groups represent unique categories of children and
sometimes entire families that have been singled out in the
statute for protection against the high cost of health care.
Those groups are summarized in my written testimony.
Thank you.
Chairman Johnson. Thank you very much, Ms. Hearne.
[The prepared statement follows:]
Statement of Jean Hearne, Specialist in Social Legislation,
Congressional Research Service, Library of Congress
Major Routes
The Medicaid program provides coverage for a generous
package of health care services for certain groups of low-
income persons. Historically, program eligibility was linked to
actual or potential receipt of cash assistance under a welfare
program. However, beginning in the 1980's, through a series of
legislative changes, the Medicaid program was expanded to
provide protection for other groups of individuals with no ties
to the welfare system. This trend culminated in the welfare
reform legislation of 1996 (the Personal Responsibility and
Work Opportunity Reconciliation Act of 1996 or PRWORA) when the
Aid to Families with Dependent Children (AFDC) program was
replaced by the Temporary Assistance for Needy Families (TANF)
program. In establishing TANF Congress formally de-linked
eligibility for Medicaid from the receipt of cash assistance
for certain covered groups.
The requirements of federal law, coupled with decisions by
individual states in structuring their Medicaid programs,
determine who is actually eligible in a given state. In
general, federal law places limitations on the categories or
groups of individuals that can be covered and establishes
specific eligibility rules for each category. Over 50 distinct
population groups are included in the law as potentially
eligible. Within these parameters, states are given additional
options. For example, the Medicaid statute allows states to
choose the upper age limit for certain optional categories of
children (up to age 18 or 19 or 20 or 21). States then create
the precise definition of this pathway. Contributing to the
complexity of the Medicaid program are financial criteria.
Medicaid is a means-tested entitlement program. To qualify,
applicants' income and resources must be within certain limits,
most of which are determined by states, again within federal
statutory parameters. Further complicating this picture is the
flexibility states have in defining countable income and
assets. Consequently, income and resource standards vary
considerably among states, and different standards apply to
different population groups within a state. In general,
individuals in similar circumstances may be automatically
eligible for coverage in one state, be required to assume a
certain portion of their medical expenses before they can
obtain coverage in a second state, and not be eligible at all
in a third state.
The result of all of the flexibility is an unfathomably
large number of eligibility ``pathways'' onto the Medicaid
program. The specific criteria of each pathway may vary from
state to state and some children could qualify for Medicaid
through more than one in any given state. The following
testimony will attempt to simply describe only the most
important pathways to Medicaid for children defined as either
those that cover the largest number of children or that cover
the largest number of children with special health care needs.
The accompanying written testimony will include a more complete
description of eligibility pathways for children.
In 1998, states reported that the Medicaid program covered
20.8 million children and young adults under the age of 21.
This group includes 55% of the nation's children who live in
poverty and about 19% of all children in the U.S. The primary
pathways to Medicaid for low-income children are the following
four:
Persons who would be eligible for cash assistance under the old
AFDC program.
Children (and families) who meet the financial and
categorical rules under the states' former AFDC programs (in
effect on July 16, 1996) are eligible for Medicaid even if they
do not qualify for cash grants under the new Temporary
Assistance for Needy Families (TANF) program. This categorical
group was created as a part of the welfare reform legislation
enacted in 1996 to ensure that certain low-income families do
not lose their Medicaid eligibility as a result of welfare
reform. For this group, PRWORA gave states the flexibility to
adjust the 1996 income and resource standards in three ways:
states may lower their income standards, but not below those
used for AFDC on May 1, 1988; states may increase their income
and resource standards by an amount that is no more than the
percentage increase in the Consumer Price Index (CPI); or
states may use less restrictive income and resource
methodologies than those in effect on July 16, 1996.
The 1996 income standards for AFDC programs are well below
the current federal poverty level (FPL). For example, the AFDC
payment standards in effect on July 16, 1996 range from about
14% of the current FPL in Alabama to nearly 86% in Connecticut.
The median level nationwide relative to the current definition
of poverty is about 44%.\1\ In addition, for most eligibility
categories in most states, individuals must have resources
(also called assets) valued at less than a specified amount
(typically $1,000 for an adult with one or more dependent
children) to be eligible for Medicaid. In 1996, most states
excluded from this calculation the family's home and up to
$1,500 equity value in an automobile. In addition, states were
permitted to exclude basic maintenance items essential to day-
to-day living, such as clothing and furniture.
---------------------------------------------------------------------------
\1\ See Appendix Table 1 in Schneider, etal.: Medicaid Eligibility
for Families and Children. Washington, DC: The Kaiser Commission on
Medicaid and the Uninsured, September, 1998
---------------------------------------------------------------------------
But a number of states have established more generous
standards for determining Medicaid eligibility than those in
place in 1996. As of 1999, twelve states have taken advantage
of the flexibility offered under welfare reform to re-align
Medicaid eligibility with eligibility for the new TANF
programs.\2\ They have done so by using less-restrictive
methods for calculating income and/or resources. In doing so,
those states effectively raised income and resource standards
in determining eligibility for Medicaid. An example of this is
a state that disregards any income in excess of the AFDC
payment standard in effect in July of 1996 for determining
Medicaid eligibility for TANF recipients.
---------------------------------------------------------------------------
\2\ See States' Implementation of Selected Medicaid Provisions of
the Personal Responsibility and Work Opportunities Reconciliation Act
of 1996. A joint project of the Center for Law and Social Policy and th
Center on Budget and Policy Priorities, January 2000.
---------------------------------------------------------------------------
Children Receiving Supplemental Security Income (SSI).
Subject to one important exception, states are required to
cover all children receiving SSI, a major pathway to Medicaid
coverage for children with special health care needs. In 1999,
over 850,000 blind and disabled children received SSI, and
participation in the Medicaid program among this group is
expected to be close to 100% since a person becomes entitled to
Medicaid benefits upon being found eligible for SSI without any
additional action required. While this is not a large group of
Medicaid children, Medicaid represents a very important source
of funding for the care of this special needs population.
Unlike the former AFDC programs or today's TANF programs,
income and resource standards for SSI do not vary by state.
Parents' income is considered when determining SSI eligibility
and benefits for children. SSI requires some of the income of
ineligible family members (i.e., parents) be deemed available
to meet the basic needs of children before extending
eligibility to those children.
The major exception to automatic coverage for SSI
recipients occurs in so called ``209(b)'' states. States may
elect the option, described in section 209(b) of the Social
Security Act Amendments of 1972, allowing them to use income
and resource standards that are no more restrictive than those
in effect in 1972. If a state chooses the 209(b) option,
though, it must also allow individuals to ``spend down,'' that
is to deduct incurred medical expenses from income in
determining Medicaid eligibility. In 1998, 11 states had
elected the 209(b) option for Medicaid, applying more
restrictive income and resource standards and/or methodologies
than those applicable under SSI.
Poverty-Related Children.
Another major pathway to Medicaid for children is through
one of three poverty-related groups. These are groups who,
prior to welfare reform, did not qualify for cash welfare
assistance. The first group is a mandatory coverage group -that
is, states are required to extend coverage to children under
age 6 and pregnant women who are in families with incomes below
133% FPL.
The second poverty-related group is another mandatory
coverage group for children born after September 30, 1983
living in families with income below poverty. This group is
being phased-in one year at a time so that all children under
17 and living in poverty are eligible for Medicaid in this
federal fiscal, those under age 18 will become eligible in
fiscal year 2001, and those under age 19, in fiscal year 2002.
The last poverty-related group includes infants (under age
1) and pregnant women who are in families with income between
133% and 185% of the FPL. This group is considered an optional
eligibility category. Last year, 41 states and the District of
Columbia had extended coverage to some or all pregnant women
and infants in this category.
Section 1902(r)(2) and Demonstration Waivers.
The Medicaid statute includes a number of provisions that
provide states with additional flexibility. Two of those
provisions include one that provides states flexibility in
defining methods for counting income and assets (authorized
under Section 1902(r)(2) of the Social Security Act), and
another that allows states to create demonstration projects
(authorized under Section 1115 of the Social Security Act) to
test new approaches for providing health care coverage. The two
provisions are very different from each other, but they bear
one major similarity--they are sometimes used by states in ways
that allow a significant number of individuals, who would
otherwise not qualify for the program, to obtain Medicaid
coverage.
Section 1902(r)(2) and Section 1115 have been present in
statute for many years, but the use of those provisions to
extend coverage to individuals not otherwise eligible for
Medicaid grew in popularity among the states during the 1990s.
Although precise numbers are not available, a significant
number of children are covered through these two mechanisms.
This number could potentially grow even larger over time.
(Medicaid data do not track children qualifying for Medicaid as
a member of one of these groups, so estimates of their number
are not available.)
Section 1902(r)(2) of the Social Security Act allows state
Medicaid programs to submit a state plan amendment to use more
liberal methods for calculating income and resources for some
categories of Medicaid eligibles. Most states that have chosen
to implement Section 1902(r)(2) have done so only for children.
In addition, most states using the flexibility created by
Section 1902(r)(2) do so by disregarding certain types or
amounts of income to extend Medicaid to children in families
with earnings that are too high to qualify for one of the other
eligibility groups, or have assets that exceed allowable
levels.
Demonstration waivers are authorized in Section 1115 of the
Social Security Act. Under this provision, states are able to
waive some Medicaid requirements to create demonstration
projects that promote the objectives of the Medicaid statute.
Through a fairly cumbersome application process, a number of
states have used such waivers to enact broad-based and
sometimes state-wide health reforms. Demonstrations under this
provision need not be statewide. A number of the demonstrations
extend comprehensive health insurance coverage to low-income
children (among others) who would otherwise not be able to
obtain Medicaid.
In 1999, there were 12 demonstration projects operating
under Section 1115 to extend Medicaid to populations not
otherwise eligible for the program and 26 states altogether
that use either Section 1902(r)(2) or a demonstration waiver to
extend Medicaid to children in families with income or assets
too high to otherwise qualify.
While the above pathways represent the major routes to
Medicaid eligibility for children, there remain a number of
other eligibility categories in use by states through which
smaller numbers of children obtain their benefits. Many of the
following groups represent unique categories of children (and
sometimes entire families) that have been singled out in the
statute for protection against the high cost of health
insurance or health care.
Additional Pathways
AFDC-related groups:
Transitional Medical Assistance. An increasingly important
eligibility group for families with children is called
``transitional medical assistance'' or TMA. TMA was created to
address the concern that the loss of Medicaid for individuals
who could successfully obtain employment would provide a
disincentive to seek and to keep jobs. States are required to
continue Medicaid for six months for families that were covered
by Medicaid under the welfare reform provisions (Section 1931)
in at least three of the last six months preceding the month in
which the family lost such assistance due to increased hours of
employment, increased earnings of the caretaker relative, or
the family member's loss of a time limited earned income
disregard. States have the option of extending Medicaid
coverage for an additional six months for families that were
covered during the entire first 6-month period, and are earning
below 185 % of the poverty line. The provisions authorizing
transitional medical assistance for the above groups sunset as
of September 30, 2001.
A small additional group of TMA eligible persons are those
who lose Medicaid coverage under Section 1931 because of
increased child or spousal support. Families eligible for this
4-month extension must have been receiving Medicaid under
Section 1931 in at least 3 of the preceding 6 months.
Other AFDC-related Groups. While the AFDC program no longer
exists, a number of Medicaid eligibility groups that are tied
to the states' former AFDC rules remain in existence. These
rules continue to apply today because of the PRWORA provision
requiring Medicaid coverage for people who would have qualified
for the former AFDC programs. Among those mandatory coverage
groups are certain job opportunities and basic skills (JOBS)
participants; and 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.
``Ribicoff Children". As with the medically needy,
``Ribicoff children,'' named for the former Senator that
sponsored legislation authorizing coverage for this group, is a
coverage path that is gradually diminishing in importance as
more children are included under the poverty-related coverage
categories. Ribicoff children are children under 21 who meet
income and resource requirements for AFDC but who otherwise are
not eligible for AFDC. Included in this category are often
children who are in state-sponsored foster care, or who are
institutionalized or inpatients in psychiatric facilities.
Ribicoff children must be under the age of 21. Because they
may be older than children qualifying as a poverty-related
child (through age 18 in 2002), the Ribicoff pathway may remain
an important optional category for older children even after
the poverty-related categories are fully phased in.
SSI-related groups
Recipients of State Supplemental Payments (SSP). Many
states, recognizing that the SSI benefit standard may provide
too little income to meet an individual's living expenses,
supplement SSI with additional cash assistance payments. States
that choose to offer state supplemental payments (SSP) may also
offer Medicaid coverage to those SSP recipients who would be
eligible to receive SSI but for income. In 1999, all but 7
states provided some amount of supplementary payments. In some
of those programs, certain children who do not receive SSI
qualify for SSP and Medicaid through the SSP pathway.
Optional Coverage of Institutionalized Persons Under a
Special Income Level--the 300% Rule. States have another option
for covering certain individuals with incomes too high to
qualify for SSI or SSP. These persons must (1) require care
provided by a nursing home or other medical institution, (2)
meet the states's resource standard, and (3) have income that
does not exceed a specified level. Medicaid law requires that
income for these persons be no more than three times the basic
SSI payment level. For 2000, the limit was $1,536 per month (3
multiplied by the SSI benefit of $512).
Optional Coverage of Noninstitutionalized Disabled
Children. For a child under the age of 21 and living at home,
the income and resources of the child's parents are
automatically considered available for medical care expenses,
that is, they are ``deemed'' to the child. If the same child is
institutionalized, however, after the first month away from
home, the child no longer is considered to be a member of the
parents' household and only the child's own financial resources
are considered available for care. The child then is able to
qualify for Medicaid. This policy has resulted in some children
remaining in institutions even while their medical needs could
be met at home. This situation was dramatized in 1982 by the
case of Katie Beckett, a ventilator-dependent child who was
unable to go home because she would no longer have been
eligible for Medicaid. Medicaid law contains a provision that
allows states to extend Medicaid coverage to certain disabled
children under 18 who are living at home and who would be
eligible for Medicaid if in a hospital, nursing facility, or
intermediate care facility for the mentally retarded and as
long as the cost of care at home is no more than institutional
care.
Children Receiving SSI as of August 22, 1996. In addition
to delinking Medicaid from the receipt of cash assistance, the
PRWORA also established a new definition of childhood
disability for receipt of SSI benefits. Under the new
definition, some children would lose their SSI and Medicaid
eligibility as well. In 1997, Congress created a Medicaid
requirement that states continue Medicaid coverage for those
disabled children who were receiving SSI on the date of
enactment of PRWORA.
Other Pathways to Medicaid
Medically Needy. The medically needy are persons who fall
into one of Medicaid's eligible categorical groups but have
income that is too high qualify to for coverage under that
group. States can choose to cover the medically needy by
setting income standards for this group that are no higher than
133.33% of the state's AFDC payment standard (medically needy
income standard) in place on July 16, 1996 (or as subsequently
modified). Individuals (or families) qualify for this category
by having income that falls below that medically needy
standard, or by incurring medical expenses that, when
subtracted from income, result in an amount that is lower than
the medically needy income standard. Persons qualifying for
medically needy coverage must also meet the states' AFDC
resources standards.
Children can obtain Medicaid coverage through this
eligibility pathway if the child resides in a state that elects
to offer medically needy coverage. However, this eligibility
path is becoming less significant as a route for children
because of the major expansions for children in poverty-related
groups as described above. Some families with older children or
with very large medical expenses, who are otherwise ineligible
for Medicaid may still qualify for medically needy coverage.
Optional Coverage of Persons Needing Home and Community-Based
(HCB) Care.
States have an option of covering persons needing home and
community based services, if these persons would otherwise
require institutional care that would be paid for by Medicaid.
These services are provided under waiver programs authorized in
Section 1915(c) of Medicaid law. The programs, often referred
to as home and community-based care waiver programs, require
states to make special application to HCFA for the programs
they wish to operate. With approval, they may provide a wide
variety of nonmedical, social, and supportive services that
have been shown to be critical in allowing chronically ill and
disabled persons to remain in their homes. States are using
waiver programs to provide services to a diverse long-term care
population, including children, the elderly, and others who are
disabled or who have chronic mental illness, mental retardation
and developmental disabilities, and AIDS. With an approved HCB
waiver program, states may cover persons needing home or
community-based care on the basis of being medically needy or
meeting the 300% rule, without deeming the income of other
family members available to the qualifying person. This is
especially important for children with special care needs who
are able to live at home with their parents only if they can
receive Medicaid support.
Targeted Low Income Children Authorized under the State
Children's Health Insurance Program (SCHIP).
SCHIP was established by the Balanced Budget Act of 1997
under a new Title XXI of the Social Security Act. The program,
while completely separate from Medicaid, allows states to
access SCHIP funds to cover targeted low-income children
through private health insurance that meets specific standards
for benefits and cost-sharing, or through their Medicaid
programs, or through a combination of both.\3\ SCHIP is
included here, because many states have, in fact, extended
Medicaid coverage to targeted low-income children, albeit they
pay for that coverage with Title XXI funds.
---------------------------------------------------------------------------
\3\ Under limited circumstances, states have the option to purchase
a health benefits plan that is provided by a community-based health
delivery system, or to purchase family coverage under a group health
plan as long as it is cost-effective to do so.
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Title XXI defines SCHIP-eligible children as those who are
not eligible for Medicaid or covered under a group health plan
or other insurance and in families with incomes that are
either: (1) above the state's Medicaid financial eligibility
standard but less than 200% of the federal poverty level, or
(2) in states with Medicaid income levels for children already
at or above 200% FPL, within 50 percentage points over the
state's current Medicaid income eligibility limit for children.
Within those broad statutory requirements, each state can
define the group of targeted low-income children who may enroll
in SCHIP.
As of January 1, 2000, the Health Care Financing
Administration had approved SCHIP plans for all 50 states, the
District of Columbia and five territories. Twenty-four states
use Medicaid expansions, 15 have state programs, and 17 combine
a Medicaid expansion and a separate state program.
Other Considerations.
A final provision, already mentioned above, deserves some
elaboration. In establishing the post-welfare reform link to
Medicaid for individuals who would be eligible for AFDC under
the rules in effect in 1996, the PRWORA gave states the
flexibility to adjust the methods used for calculating the
amount of income and resources an applicant has available to
them. More specifically, Section 1931(b)(2)(C) allows states to
use more generous income and resource methods than those used
for determining eligibility for AFDC in 1996. This provision is
parallel in structure to Section1902(r)(2). A recent survey of
Medicaid eligibility practices following welfare reform
suggests that many states use section 1931(b)(2)(C) to create
methodologies that are parallel to those used under the states'
TANF programs. In other words, while PRWORA delinked Medicaid
and AFDC, it created a provision that allows states to ``re-
link'' eligibility for those programs.
In the near term, the flexibility afforded by Section
1931(b)(2)(C) is not likely to become a major pathway for
children to travel to the Medicaid program. Children with
income too high to qualify for cash assistance have a number of
other pathways to Medicaid. On the other hand, this provision
may hold important promise for extending coverage to the
parents of children who have fewer alternative pathways to
Medicaid or for simplifying Medicaid eligibility while at the
same time qualifying entire families to coverage -an option
that could help to raise participation in a program that has
become increasingly complex for states to administer and for
qualifying family members to navigate.
Major Pathways to Medicaid for Children
1. Children Eligible for Cash Assistance Under the AFDC Program.
Children (and families) who meet the financial and categorical
rules under the state's former AFDC programs (in effect on July 16,
1996) are eligible for Medicaid even if they do not qualify for cash
grants under the new Temporary Assistance for Needy Families (TANF)
program. This group was created as a part of the 1996 welfare reform to
ensure that all low-income families that would have qualified for
Medicaid under the old AFDC program continue to qualify for Medicaid
following welfare reform. Many states use a provision allowing
flexibility in calculating income and resources for this coverage
group. As of 1999, twelve states have taken advantage of this
flexibility to re-align Medicaid eligibility with eligibility for the
new TANF programs.
2. Children Receiving Supplemental Security Income (SSI)
Subject to one important exception, states are required to cover
all children receiving SSI, a major pathway to Medicaid coverage for
children with special care needs. The major exception to automatic
coverage for SSI recipients occurs in so called ``209(b)'' states.
Those states use income and resource standards that are no more
restrictive than those in effect in 1972. If a state chooses the 209(b)
option, though, it must also allow individuals to ``spend down'' into
Medicaid eligibility. In 1998, 11 states had elected the 209(b) option.
3. Poverty-Related Children.
Another major pathway to Medicaid for children is through one of
three poverty-related groups. These children qualify for Medicaid even
though they are not enrolled in TANF or SSI:
a) States are required to cover children under age 6 and pregnant
women who are in families with incomes below 133% FPL
b) In 2000,states are required to cover children under age 17
living in families with income below poverty. This group is being
phased-in one year at a time so that all children under 18 and living
in poverty will be eligible for Medicaid in 2001, and all children
under age 19 will be eligible in 2002.
c) States can choose to cover infants (under age 1) and pregnant
women who are in families with income below 185% FPL. Last year, 41
states and the District of Columbia had extended coverage to some or
all pregnant women and infants in this category.
4. Section 1902(r)(2) and Demonstration Waivers.
Section 1902(r)(2) (of the Social Security Act) is a provision that
allows states flexibility in defining methods for counting income and
resources. Demonstration waivers allow states to test new approaches
for providing health care coverage. The two provisions are very
different from each other but both are often used by states in ways
that allow a significant number of individuals to obtain Medicaid
coverage who would otherwise not qualify for the program. In 1999, 26
states used Section 1902(r)(2) and demonstration waivers to extend
Medicaid coverage to children in families with income or assets too
high to otherwise qualify.
Chairman Johnson. In your folder is a summary of the
pathways for your reference. The thing that strikes me is that
we actually, under the law, are covering essentially all
children or will be in the next year or two under a hundred
percent of poverty and all children under 6 under 133 percent
of poverty. And, as I read your testimony, roughly half the
States through the 1902(r)(2) waiver possibility are serving
people above 133 percent of poverty. Why then is it--does it
appear to be true that 45 percent of kids in poverty aren't
participating? Is that an administrative problem? Is that a
legal problem? How much has to do with the 24 States that are
not using 1902(r)(2) waivers and therefore are seeing poor
families that have high assets or higher assets than the law
allows cut out of the program? Do you have any idea about who
that 55 percent is?
Ms. Hearne. My understanding is that there are a large
number of reasons that children and their parents don't enroll
who may otherwise be qualified for the program, including
administrative difficulties and concerns that the program still
maintains some welfare stigma for some families.
Another thing to keep in mind, while States have these
other flexibilities in the law, many of them use them in very
modest ways, so there may not be large-scale expansions in
those States under the two options.
Chairman Johnson. Thank you.
Mr. Cardin.
Mr. Cardin. Thank you very much for your testimony.
Have you noticed any differences among the States or are
some States using some of their demonstration authority or
seeking demonstration authority or doing things that are more
creative in an effort to get more children enrolled in their
Medicaid Programs?
Ms. Hearne. My understanding is that there are lots of
different approaches that States are using. I can't really
recite any of those now, although I understand that there will
be----
Mr. Cardin. We have some other panelists who will be
talking about that. If you look at the statistics, and I
understand that you have looked at the statistics, you have 45
percent of the children below poverty not enrolled in Medicaid.
Ms. Hearne. Right.
Mr. Cardin. And those 45 percent would be eligible to
participate in the Medicaid Program?
Ms. Hearne. Right.
Mr. Cardin. We don't know about the other pathways as to
how successful we have been. I am sure that there are
additional children who would fall under the other pathway that
have not enrolled. But that is a significant number of children
who have not enrolled. Do we have any idea how many of those
children have no health insurance?
Ms. Hearne. I don't have that with me, but I can obtain
that number and get back to your staffperson.
Mr. Cardin. I appreciate that.
Ms. Hearne. I would guess that it is more than 50 percent.
Mr. Cardin. It would be useful if we can get that number.
Do you have the numbers that fall under the different
pathways as to eligibility?
Ms. Hearne. Medicaid reporting data does not clearly
distinguish how children qualify for the program. So States
report in kind of big buckets of kids that you can't really
separate out into these pathways.
Mr. Cardin. Do you have any idea as to--I assume that the
pathway for income eligibility is the largest single category?
Ms. Hearne. The two major categories are kids qualifying on
the basis of formerlly receiving AFDC or receiving TANF now,
and the second are the poverty-related--the three groups.
Mr. Cardin. Do you know how many children who are eligible
because of receiving TANF before would not be eligible under
the current income categories?
Ms. Hearne. No, I don't.
Mr. Cardin. You don't have that information.
Thank you very much. There are some other questions that I
am going to want to try to get information back from you, but
if it is all right, Madam Chair, I will try to do that by
written questions to you.
Just one last comment. As I listened to your testimony, it
was anything but easy to understand--if I am a person trying to
get my child covered and you give me this pathway list, it is
not easy for me to understand whether I am eligible or not. So
relying on the family to know whether they are eligible for
Medicaid, if a State puts out this pathway, here it is, figure
it out, you are going to have a lot of people that never get
into the Medicaid system. You are not dealing with a group that
is sophisticated with these sections of the Code or the income
levels that are the different poverty levels. I do think part
of the problem is the complexity that we put into the Code that
we need to take a look at.
Thank you.
Chairman Johnson. Are there other questions?
Mr. Watkins. I would like to make a comment. The stigma of
welfare is probably, in a great majority of the cases, a lot of
them, but you have to reach down and say, number two, there are
a lot of parents--the example that I just went through a while
ago, there are parents that are irresponsible. I don't think it
is a lack of love but lack of knowledge or understanding or
alcohol or drugs or other cases.
As Ben indicated, thinking here of how--I am wondering if
you can tie them with education. When they hit the age of five
and go into school, education is the best way to lift them out
of poverty and try to get something working along that line; or
with the paycheck, if they can go to work, their kids would be
small. But the stigma of welfare still affects a lot of people
from not doing it, but maybe working with education and keep
them in school--it is a big problem.
Chairman Johnson. Thank you.
Mr. McCrery.
Mr. McCrery. Ms. Hearne, you may not be prepared to answer
this question, but I see you are a specialist in social
legislation. Can you tell us what the poverty rate in the
United States has done in the last say 5 years?
Ms. Hearne. It has risen some over the last 5 years, but,
currently, it is just over $14,000 for a family of----
Mr. McCrery. No, the percentage of the population that is
living in poverty in the United States, has that percentage
gotten greater in the last 5 years or are there fewer people as
a percentage of our population?
Ms. Hearne. I don't have that number with me, but I can get
back to you this afternoon.
Mr. McCrery. Thank you.
Chairman Johnson. Mr. Stark.
Mr. Stark. Thank you, Ms. Hearne. You may know the answer
to this and maybe we should, but the transitional Medicaid
assistance, as you know, sets a year before we have to
reauthorize TANF, so we have a year in which people would not
have the transitional Medicaid assistance, right?
Ms. Hearne. That is correct.
Mr. Stark. Any idea why we did that? How much would it cost
to extend that so we keep the traditional Medicaid assistance
until we reauthorize TANF?
Ms. Hearne. I haven't seen a CBO cost estimate of that
expansion.
Mr. Stark. I am told that it is maybe 300 million or 400
million bucks.
How about the legislative history, how we ended up that
way?
Ms. Hearne. I don't know the answer to that.
Mr. Stark. It does cause a problem for one small group of
people. Do you have any recommendations? Do you have any idea
how many people are apt not to be covered because of that?
Ms. Hearne. My understanding is that that second 6-month
period is not used that extensively because it is fairly
administratively onerous. So, to that extent, it may not be
quite as lively used as one would hope.
Mr. Stark. OK. What does that mean in terms of the number
of people?
Ms. Hearne. I don't know the number.
Mr. Stark. Madam Chair, maybe our staff at some point could
enlighten us, but we do have kind of a glitch there.
Chairman Johnson. We do have a glitch there.
As you can guess and as I know, the issue was money. And we
did take $500 million and put it in a special fund to give
States a 90-10 match to deal with the administrative cost. This
issue, once you delink benefits, you are going to have new
administrative things.
Looking ahead, we preferred to use the money that way
because that would give us time to see what were the problems.
And we are seeing what those problems are, and through this
hearing we will begin to look at the administrative issues. We
certainly will deal with it.
It is not unlike the problem we just met with--that we just
dealt with in the welfare-to-work program, where, actually, the
administrative definitions meant that the program wasn't
serving the populations that we intended it to serve.
I think the complexity of this extension is going to have
to be one of the issues that we have to look at. But at the
time we did welfare reform, it was more important to give
States money to deal with the administrative costs and 90/10
split which we didn't do in the whole program in order to try
to guarantee that the benefits would flow knowing that it would
be a more complicated problem.
Mr. Stark. Knowing that the Chair is aware of this problem,
I will sleep better.
Mr. Cardin. It is interesting, I think the Chair is
correct, we really wanted to help the States in the
administrative side, but it is somewhat disappointing when you
take a look at the results on enrollment in Medicaid that the
performance numbers are certainly very, very disappointing. So
here we are. We took money away from providing extra help to
families that are trying to play according to rules and coming
off of welfare, and they need some help because the job doesn't
provide the health insurance, and we did that so the States
would have an easier time in dealing with the transition
problems in moving from AFDC to TANF, and now we don't--have a
large number of children who are without any health insurance.
Something went wrong.
Chairman Johnson. Thank you very much. I appreciate your
factual foundation, Mr. Hearne.
Chairman Johnson. I would like to call the first panel,
Cindy Mann, Director, Family and Children's Health Programs
Group, HCFA Center for Medicaid and State Operations; Marilyn
Ellwood, Senior Researcher, Mathematica Policy Research; Ronald
Pollack, Executive Director, Families USA; Barbara Lyons, Vice
President, Commission on Medicaid and the Uninsured, Kaiser
Family Foundation. Thank you for being here.
It has been a significant disappointment to many of us that
there has been this collapse in the provision of Medicaid
benefits to eligible children, and we will start with Cindy
Mann.
STATEMENT OF CINDY MANN, DIRECTOR, FAMILY AND CHILDREN'S HEALTH
PROGRAMS, CENTER FOR MEDICAID & STATE OPERATIONS, HEALTH CARE
FINANCING ADMINISTRATION
Ms. Mann. Good morning, Chairman Johnson, Congressman
Cardin and Subcommittee members. I appreciate the opportunity
to share some of our observations from HCFA and concerns about
how welfare reform has affected Medicaid enrollment and to tell
you what HCFA has been doing to promote enrollment among low-
income families with children who are eligible for Medicaid.
Let me start this morning by saying that there is good news
and bad news. Let me start with the good news.
The good news is that I agree with the Chair, which is that
when Congress and the President worked on the final details of
the welfare law they understood that Medicaid coverage was
going to be impacted by the welfare changes that were being
considered at the time, and they took a very important step to
protect Medicaid eligibility for families with children. This
happened, in large part, because of Chairman Johnson's strong
interest and concern. She played a very central role in
ensuring that guarantee in the final bill.
The second piece of good news, which is related to the
first piece of good news, is that the provision adopted in the
bill that was crafted by Congress to delink Medicaid
eligibility from welfare eligibility can and does work. And I
think we have examples of some States that have demonstrated
that it can and that it could work and that it should work with
proper attention and implementation. In fact, we have enough
good news from the American Public Human Services Association
and the NGA that, in collaboration with HCFA, we are having a
best practices conference on June 9 on this matter to share
information on how to implement this provision as effectively
as possible.
The third aspect of the good news, which is often
overlooked, is that the provision that created the delinking
provision in the welfare law that established this guarantee
provides States with some new options--some important new
options that have bearing on the conversation that we have had
so far this morning.
One, it gives States some new options to simplify Medicaid
eligibility; and, second, it gives States the option to provide
Medicaid coverage to a broader group of low-income working
families; and many States have already started to take
advantage of those options.
I don't know if people here have picked up the healthy
families application in the District of Columbia, but D.C. now
covers, under this new provision, families up to 200 percent of
poverty, and it does so in a simple, two-page form, basically
using a gross income standard. It has collapsed many of its
categories that Jean went through and created a simpler program
for families and children.
Other States have taken similar steps to expand coverage to
low-income working families. Wisconsin has done so. Missouri
has done so. Rhode Island and Connecticut have adopted
legislation and are planning to implement, as has New York,
Ohio, and California. So, there are a lot of new opportunities
available to States under the delinking provision, but, of
course, the story is not all good news.
Implementation problems do appear to have contributed to a
decline in Medicaid enrollment among parents and children in
some States. We are greatly concerned about instances in which
Medicaid-eligible children and parents may have lost coverage.
To help you understand a little bit about what is
happening, let me first try and explain, in practical terms,
how Medicaid and welfare eligibility worked before the
delinking and how it is supposed to work now.
Since the beginning of the Medicaid Program, as you
probably are aware, Medicaid eligibility for families was
linked to eligibility and receipt of cash assistance. If you
were on AFDC, you were on Medicaid; and if you were a family
with children and you weren't receiving AFDC, for the most
part, you simply weren't eligible for Medicaid. Medicaid came
as an appendage, essentially, of your AFDC entitlement, and,
so, when your AFDC case closed, so did your Medicaid case, in
most cases, because it would have ended as a family unit.
Since the late eighties, that story has changed somewhat
because of the new pathways to eligibility that have been
created particularly for children and for pregnant women.
However, there was no independent pathway to Medicaid
eligibility for families with children until the delinking
provision was established in 1996. Until then, welfare was the
only route to Medicaid coverage for a family in most States or
certainly the predominant route.
Part of that function of linkage between welfare and
Medicaid is not eligibility linkage, but a systems linkage.
Because Medicaid came along with AFDC, States had no reason to
set up a separate infrastructure in their States to determine
Medicaid eligibility for families because that eligibility rose
or fell with eligibility determination for cash assistance. And
that actually is part of the problem that we are facing now in
terms of implementing delinking.
Right now, what has to happen is, when a family applies for
Medicaid and TANF and the agency determines that the family is
not eligible for TANF, or the family is diverted to another
service and doesn't need TANF, or the family decides to
withdraw the application from TANF, Medicaid eligibility should
still be determined independently. And the delinking provision
ensures that there is a category, in the law, for that
eligibility to be determined, but that is not necessarily how
systems worked before 1996.
Similarly, when a cash assistance case closes, eligibility
for Medicaid does not necessarily end because of the loss of
cash assistance. Whether it is because a parent has gone to
take a job or whether a family has hit a time limit or for any
other reason, the cash assistance is closed. Medicaid needs to
be determined independent of eligibility for cash assistance
based on the resources and the income limits established in
each State.
You will hear from my colleagues on the panel today about
some of the data that we have been looking at to tell us what
has been happening in States, and I will defer to them largely
on the data. I will tell you that the data that HCFA collects,
the 2082 data from States, shows that while overall Medicaid
enrollment has pretty much held steady, that there has been a
decline for families with children, a slight decline, and that
Medicaid enrollment for kids during the last 3-year period has
declined for children and adults by about 2.1 percent and for
children it has remained basically level after having dropped
in 1996.
The national numbers, though, I would really caution you
mask considerable variation across States. You will see when
you look at State-by-State enrollment data that some States
have seen their enrollment rise robustly and some States have
seen their enrollment decline significantly, and you will hear
from the State panelists later about the situations in their
States.
There are a lot of reasons for those fluctuations. Some of
them are the immigrant-related issues that were talked about
earlier. Some are related to a drop in the poverty rate and
rise in incomes and the availability, at least in some
localities, of private insurance coverage. Some are systems
problems with respect to cash assistance and delinkage.
Let me turn to what HCFA has done.
Chairman Johnson. If you can summarize. We want to get
through everybody.
Ms. Mann. We have been very concerned about this issue. We
have issued considerable guidance since the 1996 law was
enacted. In late 1996, the President instructed HCFA to do
eligibility reviews in every State to look at this issue, and
those reviews started last fall and have been continuing. We
have looked at State-by-State eligibility policies and
practices with respect to this issue. We have also been urging
and working with Congress to help continue to make available
that $500 million to help States finance the cost of systems
changed for delinking.
On April 7, we issued guidance to all States directing them
to look at their policies and their practices and to determine
whether anybody had been improperly terminated and, if so, to
reinstate coverage for those individuals. And the letter also
directs States to consider their computer systems and ensure
that those systems do not improperly terminate coverage and to
streamline their redetermination systems.
I am pleased to say that the guidance--no State has
actually thanked us for the guidance--has been well-received by
States. They have said that it provides some clear instructions
to them and that they truly do believe that if people have been
improperly terminated that they indeed should be reinstated to
coverage.
We look forward over the next few months to working with
States as our reviews are completed and as States move forward
in implementing this guidance to ensure that the problem which
has been identified by this hearing is a problem that we can
put behind us and ensure that all eligible families have
coverage.
Chairman Johnson. Thank you.
[The prepared statement follows:]
Statement of Cindy Mann, Director, Family and Children's Health
Programs, Center for Medicaid & State Operations, Health Care Financing
Administration
Chairman Johnson, Congressman Cardin, distinguished
Subcommittee members, thank you for inviting me to discuss the
impact of welfare reform on Medicaid. President Clinton has
continued to stress the importance of ensuring that everyone
who is eligible for Medicaid is enrolled, and we greatly
appreciate this opportunity to discuss our actions and
concerns.
The historic welfare reform law, along with the new State
Children's Health Insurance Program created in 1997, has
enabled States to greatly expand health care coverage
eligibility and help more low-income people make the transition
from welfare to work. It broke the link between cash assistance
programs and eligibility for Medicaid. It also explicitly
guaranteed that children and families who would have qualified
for Medicaid through receipt of cash assistance would continue
to be eligible for Medicaid.
Overall national statistics on Medicaid enrollment are
encouraging, but there is variation among States. The most
recent statistics from all States show that total Medicaid
enrollment is about the same now as it was before welfare
reform. However, we know that many eligible families are not
enrolled; and we share your concern about instances in which
State practices have resulted in eligible individuals losing
health care coverage.
We have taken a series of actions to ensure that States
comply with the welfare reform law and address its impact on
Medicaid enrollment. Most recently, we instructed all States to
review Medicaid terminations and re-enroll improperly
terminated individuals. We also asked States to ensure that
their computer systems and eligibility processes have been
modified so that families eligible for Medicaid do not
inappropriately lose coverage when their eligibility for cash
assistance ends.
Last year we worked with Congress to ensure the continued
availability of the $500 million fund created to help States
afford needed changes.
The President, in addition to aggressively promoting SCHIP
outreach efforts, has proposed several additional steps to
further expand health care coverage among low-income families
and strengthen programs that provide health care for the
uninsured. And we are committed to continuing to work with
States to ensure that no eligible individuals are denied
Medicaid coverage.
Background
Congress and the President together kept the pledge to
``end welfare as we know it'' through the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996.
This historic law broke the link that made families
automatically eligible for Medicaid if they received cash
assistance through the Aid to Families with Dependent Children
program, which was replaced with the Temporary Assistance for
Needy Families (TANF) program
The link was broken because we all knew that welfare
programs were changing, and neither Congress nor the
Administration wanted those changes to result in the loss of
health care coverage. At the insistence of the President,
Chairman Johnson of this Subcommittee, and many other members
of Congress, great care was taken to assure that Federal law
continued to guarantee Medicaid eligibility for children and
families who formerly qualified for Medicaid through receipt of
cash assistance. Health care coverage can be critical in
helping people make the transition from welfare to work and
keeping them healthy so that they can work. This is especially
important in entry-level jobs that may not provide employer-
based health insurance.
Thus, the welfare reform law requires that States must
still provide Medicaid to all people who would be eligible for
welfare under the State's Aid to Families with Dependent
Children plan that was in effect on July 16, 1996, prior to the
enactment of the welfare reform legislation.
They also must provide Medicaid to children who lost
Supplemental Security Income cash assistance when disability
rules changed, as well as other statutorily defined groups,
including low-income elderly and disabled people.
The 1996 law also gave States new options for providing
Medicaid coverage to low-income working families. This was
followed by a regulation issued by HCFA in 1998 allowing States
to cover parents in two-parent families. The Balanced Budget
Act of 1997 (BBA) built upon the welfare law changes and
created the State Children's Health Insurance Program (SCHIP),
which gives States wide flexibility in providing health care
coverage to children in families that earn too much to qualify
for Medicaid but not enough to purchase private sector
insurance. The BBA also gave States two new Medicaid options--
presumptive eligibility for children and 12-month continuous
eligibility--to improve coverage among poor families.
These changes have created important opportunities for
States to provide health care coverage to low-income families
as they move off welfare and into the workforce. States have
responded with eligibility expansions, simplified enrollment
procedures, and creative outreach campaigns. The result is that
millions more low-income children and parents are now eligible
for coverage through Medicaid or the new SCHIP program.
Meeting Challenges
The delinking of welfare and Medicaid has created
challenges and opportunities in ensuring that those who are
eligible for Medicaid coverage get and retain it. Acknowledging
the new administrative burden on States that might result from
delinking, the welfare reform law included $500 million for
enhanced matching funds to help States cover the increased
costs, such as outreach, associated with delinking welfare and
Medicaid. Since enactment of welfare reform, we have worked
with States and others to undertake substantial efforts to
improve Medicaid outreach and increase the participation of
eligible children and families.
Consistent national data on Medicaid and SCHIP coverage for
families leaving welfare does not yet exist, although this will
continue to be an important area of research being funded by
the Department of Health and Human Services (HHS). The most
recent statistics show that, overall, total Medicaid enrollment
has fluctuated only slightly, dropping in 1997, rising in 1998,
and is now about the same--41.4 million--as it was before
welfare reform. Among low-income adults and children
nationally, Medicaid enrollment declined slightly by about 2.1
percent (620,000 individuals) during the three-year period from
1995 to 1998. Among children, it peaked at 20.5 million in
1996, then remained relatively level in the following two years
at 20.1 million in 1998 for a total enrollment drop of 1.3
percent (270,000).
HHS-funded studies show significant state-to-state
variation in enrollment trends, with Medicaid enrollment rates
for adults ranging from 24 to 76 percent three months after
leaving cash assistance, and enrollment dropping further by as
much as 10 to 20 percent in the year after leaving.
Improvements in the economy, such as that we have enjoyed
for the past six years, contribute to rising incomes and
falling welfare and Medicaid caseloads. It is also important to
note that overall, the number of people under the poverty level
who are uninsured has not increased since 1996 and the poverty
rate has declined. One particularly encouraging finding is that
the number of non-disabled adults enrolled in Medicaid
(primarily parents and pregnant women requiring TANF benefits)
actually increased in 1998. And, at the same time, more than 2
million children are now enrolled in SCHIP.
As Marilyn Ellwood notes in her testimony, people losing
Medicaid when leaving cash assistance has always been an issue,
even before the passage of welfare reform. Other research,
dating back to the 1980s, has shown that people who leave
welfare often return to the cash assistance rolls. This
``cycling'' pattern of cash assistance usage has also
contributed to periodic losses of Medicaid coverage, both for
the adults and for their children.
In this context, Ellwood's finding that in 1995 between 49
percent and 65 percent of adults who left cash assistance were
not enrolled in Medicaid after six months is not surprising,
even if it is disappointing. In the five states she studied,
the turnover rate for adults ranged between 26 and 40 percent.
Breaking Medicaid's link with cash assistance, along with
the guarantee of Medicaid for certain families with children
regardless of cash assistance status and Medicaid expansions,
should help to reduce cycling on and off Medicaid. This will
help allow Medicaid to operate more effectively as a health
insurance program. By and large, thanks to Transitional Medical
Assistance, the 1996 eligibility guarantee, and recent
eligibility expansions, people leaving cash assistance are
eligible for Medicaid. Our challenge now is to ensure that the
law is implemented properly and that Medicaid eligibility is
based on a family's income and assets, and not on their status
as welfare recipients.
Working with States
As mentioned above, there is wide variation among States in
enrollment trends. Some States have done an excellent job of
maintaining Medicaid coverage for individuals leaving cash
assistance rolls. Other States have done an excellent job of
outreach to individuals eligible for Medicaid or SCHIP. But in
other States, there have been problems that we are working hard
to address.
We are greatly concerned about instances in which
administrative inaction or improper procedures by States have
resulted in eligible individuals being denied access to
Medicaid, or in their losing Medicaid coverage or Transitional
Medical Assistance that they are guaranteed by law. For
example:
Some public assistance staff failed to inform
individuals applying for cash assistance and Medicaid that they
could be eligible for Medicaid even if they did not want to
pursue or were not eligible for cash assistance under TANF;
Some States have used joint application forms for
both cash assistance and Medicaid and improperly denied health
care coverage to individuals who were eligible for Medicaid but
not eligible for cash assistance; and
Computer systems in some States improperly removed
individuals from Medicaid rolls when closing their cash
assistance cases.
We have taken and are continuing to take several steps to
help States adjust to the changes and address specific
situations in which eligible individuals were denied Medicaid
coverage. And we are working with States to find new ways to
reach children and families outside, as well as through, the
welfare system. Our efforts to help States address these types
of concerns began shortly after the welfare reform law was
enacted.
In 1997 and 1998, we sent a series of letters to
States that provided guidance on how to comply with the new
rules and ensure health care coverage for those eligible for
Medicaid. We also revised our Medicaid manual for States to
update guidance on the new law.
In June 1998 we sent a letter specifically
reminding States of the new rules. Since TANF agencies often
administer eligibility determinations for the Medicaid program,
we wrote this letter with the Administration for Children and
Families and sent it to both TANF and Medicaid agencies.
In February 1999, we and the National Governors'
Association launched the Insure Kids Now campaign, with a
national toll-free number, 1-877-KIDS NOW, that links callers
to their own State SCHIP and Medicaid programs, and a
www.insurekidsnow.gov web site.
In March 1999, we and the Administration for
Children and Families issued a 28-page Supporting Families in
Transition guidebook for States with information on getting and
keeping people enrolled in Medicaid when they are leaving or
are diverted from welfare.
Last August, we began conducting site visits to
all 50 States to review Medicaid enrollment policies and
systems. We are sharing results with States to help them
identify best practices and resolve any identified problems.
Last Fall, we worked with Congress to lift the
expiration date for States to spend the $500 million set aside
to help them change systems and conduct outreach to address
concerns related to delinking of Medicaid and welfare, and in
January we sent a letter urging States to take advantage of
this extension.
Last December, HHS published proposed regulations
that would take Medicaid and SCHIP enrollment figures into
consideration when awarding bonuses to States for success in
welfare reform efforts and issued guidance that States would
not qualify for performance bonuses unless they certified they
were in compliance with Medicaid (and Food Stamp) requirements.
Last month, we sent a letter to all State Medicaid
Directors with additional guidance on what they must do to
review Medicaid terminations and re-enroll individuals who were
improperly terminated. For example, they must review computer
systems and eligibility processes to ensure that they do not
improperly deny Medicaid benefits to eligible people. They also
must review records to be sure children losing SSI benefits
because of the new disability definition did not lose benefits
guaranteed them by the BBA, and reinstate anyone improperly
terminated from Medicaid. The letter also included guidance on
streamlining processes for reviewing whether individuals are
eligible to continue receiving Medicaid and ensuring that
computer systems do not result in improper terminations.
Several States are already reinstating coverage for improperly
terminated individuals, and we have received a generally
receptive response to the April letter from other States.
On June 9, we will hold a conference with the
National Governors' Association and the American Public Human
Services Association on best practices for ensuring that
eligible individuals are not denied Medicaid coverage.
Next Steps
To build on these efforts, the President's fiscal 2001
budget invests $5.6 billion over the next ten years to reach
and enroll millions of children who are eligible for, but not
enrolled in, Medicaid or SCHIP. It would:
provide new options to States to find and enroll
uninsured children through schools;
expand presumptive eligibility for children by
allowing additional sites, such as child care referral centers,
to immediately enroll low-income uninsured children in these
programs while their applications are being processed; and,
require States to make the Medicaid enrollment
process for children as simple as it is in SCHIP.
The Administration has also proposed investing $85 billion
over 10 years to improve health insurance access and
affordability. This would directly impact the very population
affected by welfare reform and expand coverage to at least 5
million additional uninsured Americans by:
providing a new, affordable health insurance
option for families through the SCHIP;
accelerating enrollment of uninsured children in
Medicaid and SCHIP;
expanding health insurance options for Americans
facing unique barriers to coverage;
strengthening programs that provide health care
directly to the uninsured;
expanding Medicaid and SCHIP to include an option
to cover children through age 20; and
expanding Medicaid and SCHIP so there is a single,
simple eligibility standard for low-income families may be the
best way to overcome the complexity and stigma that have
limited enrollment.
CONCLUSION
Helping States ensure that all eligible individuals are
enrolled in Medicaid and SCHIP is an integral part of making
welfare reform work. Health care coverage can be critical in
helping families work towards self-sufficiency. Most States are
addressing the challenges associated with changing eligibility
rules and systems, and many have developed promising new
strategies for ensuring that children and families who are not
receiving cash assistance are properly evaluated for Medicaid
eligibility.
We will continue to work with States as they work to
reinstate individuals who have been improperly terminated, and
revise computer systems and enrollment procedures to ensure
that eligible individuals are not denied coverage. And we look
forward to working with this Congress to enact the President's
proposals to further expand coverage and health care for low-
income and uninsured Americans. I thank you again for holding
this hearing, and I am happy to answer your questions.
Chairman Johnson. I would remind our guests that your
entire statement is included in the record. We have a system of
a 5-minute red light.
Marilyn Ellwood.
STATEMENT OF MARILYN ELLWOOD, SENIOR FELLOW, MATHEMATICA POLICY
RESEARCH, INC., CAMBRIDGE, MASSACHUSETTS
Ms. Ellwood. Thank you, Madam Chairman and Members of the
Committee, for the opportunity to talk with you today.
My name is Marilyn Ellwood. I am a Senior Fellow with
Mathematica Policy Research. Over the last 2 years, I directed
two studies analyzing the relationship between welfare and
Medicaid, and I want to briefly talk about those.
In the first study, we used Medicaid administrative data in
five States to see if families leaving welfare were staying on
Medicaid. That table is included at the end of the testimony
that I have provided.
If you look at it, you will see that we found that many
welfare leavers were not saying on Medicaid. In fact, 3 months
after leaving welfare, close to half or more of the children
and the adults in every State had also left Medicaid. We
expected that many of the parents wouldn't stay on Medicaid,
but we were very surprised to see the result for children,
given all of the other pathways to coverage that States have.
In the second study, I visited five States, interviewing
Medicaid and welfare staff at both the State and local levels
to see if there were policy or operational problems that might
be contributing to declines in Medicaid enrollment. I want to
review three findings from that effort.
First, welfare staff are having trouble understanding how
their responsibilities for Medicaid fit into welfare reform,
especially with all of the talk about welfare and Medicaid
being delinked. This is a big problem since Medicaid Programs
still really depend on welfare staff to educate families about
the Medicaid Program. Welfare staff are pivotal to making sure
that families who are formally or informally diverted from
welfare know that they can apply for Medicaid.
They also need to help families leaving welfare for work
continue on the Medicaid Program. Yet the staff I talked to are
struggling with these responsibilities because they don't quite
understand how the welfare program can be pushing people out
the door while the Medicaid Program wants to keep them in. And,
in fact, one person said to me that Medicaid was really not
part of welfare reform since staff don't get credit for keeping
people on Medicaid.
A second finding is that Medicaid rules are getting more
and more complicated over time, from Federal legislation, State
decisions and, in some instances, litigation. More than one
welfare staffer said, I have given up trying to explain
Medicaid to people. It is too complicated. Many States have
dozens of different Medicaid eligibility groups, each with
their own set of rules.
I think both welfare reform and CHIP have contributed to
this complexity. As an example, to implement the Medicaid rules
associated with welfare reform, California sent 120 pages of
instructions to the counties. As another example, in some
States with separate CHIP programs, one child in a family is
covered under Medicaid while the second child in that same
family will only qualify for the separate SCHIP program. We
should all imagine the difficulty of explaining that to a
parent.
A third finding is that State Medicaid Programs also have a
host of administrative problems--lengthy application forms,
face-to-face meeting requirements, office hours that don't fit
the schedules of working people, and poorly performing computer
systems. The redetermination process can be just as time-
consuming as the initial application and, as a result,
retention is a major issue. Many families simply drop off the
Medicaid rolls each month when they fail to complete needed
forms, even though they continue to qualify.
What can be done to fix these problems? I think States are
really hoping that SCHIP outreach efforts will help them
address Medicaid enrollment declines. And no doubt they will
help some, but I think it will take a lot more than that.
One of the first things I think needs to be done is that
Medicaid needs to be part of the welfare reform agenda. And
since welfare is the doorway to which many families first get
onto the Medicaid Program, as part of this you might think of
having State welfare programs track the proportion of families
leaving welfare who qualify for Medicaid or work-related health
insurance and let that be one of the measures of welfare reform
success.
We also need to make the eligibility process simpler, and
an obvious place to start would be simpler rules for Medicaid.
In particular, Medicaid rules for the very poorest families
should not be more complicated than the rules States use for
higher income children under the CHIP program. It doesn't seem
fair for CHIP to be easier than Medicaid.
As a final comment, I think State Medicaid Programs need to
rethink their mission similar to the rethinking that guided
welfare reform efforts, but Medicaid's mission could be quite
different from welfare reform. For States that are really
serious about reducing the number of uninsured, a fair measure
of Medicaid success would be the extent to which they enroll
all low-income children and families in Medicaid that qualify
and keep them enrolled as long as they don't have access to any
other form of affordable health insurance.
Thank you.
[The prepared statement follows:]
Statement of Marilyn Ellwood, Senior Fellow Mathematica Policy
Research, Inc.
Thank you, Madame Chairman and members of the committee,
for the opportunity to talk with you today. My name is Marilyn
Ellwood. I am a Senior Fellow with Mathematica Policy Research
in Cambridge, Massachusetts. In my very first job out of
college, I worked as a member of the eligibility staff with the
DeKalb County Welfare Department in Georgia. That was in 1967,
the year Medicaid was first implemented. A few years after that
I moved on to a research job, and, over the last twenty-five
years, I have done many studies of the Medicaid program, with
several focused on eligibility issues. Recently, when it became
apparent that Medicaid enrollment was beginning to decline, I
directed two studies analyzing the relationship between welfare
and Medicaid.
In the first study, my colleague Carol Irvin and I used
Medicaid administrative data for 1995 from five states
(Alabama, California, Florida, Michigan and New Jersey) to see
if families leaving welfare stayed on Medicaid. All of these
states were already showing declines in welfare and Medicaid
enrollment in 1995, even though they were at different points
with regard to welfare reform. The table included with this
testimony shows that in each of these states, many welfare
leavers did not stay on Medicaid and were at risk of becoming
uninsured. Across the five states, from 49 to 67 percent of
adults were no longer enrolled in Medicaid three months after
leaving AFDC. The results for children were not much different.
Three months after leaving AFDC, the proportion of children not
enrolled in Medicaid ranged from 47 to 58 percent across the
states. While we expected a sizable proportion of parents
leaving welfare might not continue on Medicaid, this result was
no expected for children, given the availability of the
poverty-related expansions in all the states. This pattern is
troubling, since other researchers have found that while not
all persons leaving welfare and Medicaid lose their insurance
coverage, a significant number of welfare leavers become
uninsured. It is worth noting that the rates of the uninsured
have not gone down over the last few years.
In the second study, I visited 5 states (California,
Colorado, Florida, Minnesota, and Wisconsin), interviewing
Medicaid and welfare staff at both the state and local levels,
to see if there were policy or operational problems that might
be contributing to declines in Medicaid enrollment. Let me
review three findings from that effort. First, welfare staff
are struggling with their responsibilities for Medicaid, now
that the link between Medicaid and welfare has been severed.
Second, Medicaid rules have become so complicated that welfare
and Medicaid staff, as well as families, have trouble
understanding them. Third, Medicaid eligibility is plagued by a
host of administrative problems, ranging from lengthy
redetermination forms to poorly designed automated eligibility
systems.
Challenges in Severing Welfare and Medicaid
The first finding is that welfare staff are having trouble
understanding how their responsibilities for Medicaid fit into
welfare reform. Even though welfare and Medicaid have been
severed, state Medicaid programs are still incredibly dependent
on welfare staff to educate families about differences in
welfare and Medicaid rules. Welfare staff are pivotal to making
sure families who are formally or informally diverted from
welfare apply for Medicaid, and they are also responsible for
helping families who no longer receive welfare benefits
continue on Medicaid. Yet, many welfare staff struggle with
these responsibilities, because Medicaid priorities for
maintaining or even expanding enrollment can seem to conflict
with the objectives of reducing welfare dependency. Focus
groups and surveys are showing that many families do not
understand that welfare and Medicaid rules are different, and
that many believe that the new welfare rules, like time limits
and work requirements, apply to Medicaid as well. It appears
that helping families maintain health insurance coverage has
not been a priority in welfare reform. Indeed, several welfare
staff reported that Medicaid was not a priority, since they did
not get ``credit'' for signing families up for Medicaid.
Complexity of Medicaid Rules
A second finding is that Medicaid rules have become
incredibly complicated over time as a result of federal
legislation, state decisions, and in some instances,
litigation. Though well intentioned, there rules make
eligibility difficult to understand. More than one welfare
staffer said, ``I've given up on trying to explain Medicaid to
my clients. . .it's just too complicated.'' Many states have
dozens of different Medicaid eligibility groups, each with its
own set of rules. Both welfare reform and the State Children's
Health Insurance program, or SCHIP, have contributed to this
complexity. To implement the new Medicaid rules associated with
welfare reform, California sent 120 pages of instructions to
countries. As an example of the complexity, in some states, one
child in a family will quality for Medicaid, while another in
the same family will not, although the second child will
qualify for the separately administered SCHIP program. Imagine
trying to explain that to a parent.
Medicaid Administrative Issues
A third finding is that state Medicaid programs also have a
host of administrative problems, including lengthy application
forms, face-to-face meeting requirements, and office hours that
do not fit with the schedules of working families. The
redetermination process can be just as time consuming as the
initial application. As a result, retention has become a major
issue. Many families simply drop off the Medicaid rolls each
month, when they fail to complete needed forms, even though
they may continue to qualify. Making matters worse, the
automated eligibility systems in many states (which handle
applications for Medicaid, welfare and food stamps) are
woefully inadequate--in part because they are primarily
designed and operated to meet welfare, not Medicaid, needs.
Systems errors have sometimes led to families being erroneously
terminated from Medicaid. Medicaid administrative staff report
that the management of these automated systems is beyond their
control, and that Medicaid needs are never a top priority. They
especially complain about the systems-generated notices and
other correspondence sent to applicants and beneficiaries about
Medicaid. Notices often include so many legalisms and acronyms
that it is difficult for a family to know if they are still on
Medicaid or not. One worker said that she finally told her
clients to quit reading the notices and just call her instead.
Potential Solutions
What can be done to fix these problems? States are hoping
that SCHIP outreach efforts will help them address Medicaid
enrollment declines. But, it will take a lot more than that. To
start, concern about Medicaid needs to become a welfare
priority, since welfare continues to the doorway through which
many families first become enrolled in Medicaid. Welfare staff
need to focus on educating families about how Medicaid works.
Getting families on Medicaid and helping to keep them on, as
long as they qualify, needs to become a part of welfare reform
objectives. As part of this, state welfare programs could be
strongly encouraged, or even required, to track the proportion
of families leaving welfare who continue on Medicaid or qualify
for work-related health insurance.
We also need to make the eligibility process easier. An
obvious place to start would be simpler rules for Medicaid. In
particular, Medicaid rules for the poorest families should not
be more complicated than the rules states use for higher income
children in their SCHIP programs. Other steps to improve the
eligibility process include shorter application and
redetermination forms, easier to understand notices, and
greater use of mail and telephone. States should also consider
improvements to their automated eligibility systems, using the
enhanced federal matching funds available thought the welfare
reform legislation for systems improvements.
As a final comment, I think Medicaid programs need to
rethink their mission, similar to the rethinking that guided
welfare reform efforts. Participation rates would improve if a
key measure of program success became enrolling all low-income
families in Medicaid that qualify and keeping them enrolled, as
long as they do not have access to any other form of health
insurance. However, for this to happen, states will have to
become comfortable with the idea that Medicaid might become a
long-term program of health insurance for many of the working
poor.
[GRAPHIC] [TIFF OMITTED] T8979.001
Chairman Johnson. Mr. Pollack.
STATEMENT OF RONALD F. POLLACK, EXECUTIVE DIRECTOR, FAMILIES
USA
Mr. Pollack. Good morning. I am delighted to join this
distinguished panel to focus on the losses of health coverage
that resulted from welfare reform.
About a year ago, Families USA released its first report
about the impact of welfare reform on health coverage, and we
found that approximately 1 million people in the period from
1995 to 1997 lost coverage in Medicaid, and about 675,000 of
those people became uninsured.
More recently, we issued a report based on data received
from the States. We looked at 12 States, the 12 States with the
largest number of uninsured children: Arizona, California,
Florida, Georgia, Illinois, Louisiana, New Jersey, New York,
North Carolina, Ohio, Pennsylvania and Texas. We looked at the
interaction between CHIP and welfare reform, and we found that
there are significant improvements in outreach being undertaken
in the CHIP program which we thought was very optimistic.
But, as Cindy Mann said, there is some good and bad news.
The bad news is that the losses in Medicaid in these States
exceeded the gains that were made in the CHIP program. I want
to give you some examples.
There were several States that were winners that added
children. There were several States that were losers. The three
States with the largest losers were--first Texas which lost
193,400 children from public coverage, 14.2 percent. California
lost 121,788, or 4.2 percent. Ohio lost over 40,000.
There were some winners as well. There were net gains in
some States. North Carolina added almost 79,000 children. New
York added almost 51,000 children. Louisiana added over 35,000
children.
The net effect in these 12 States was that there were about
755,000 children who gained admission to the CHIP program, but
there were 975,000 children who lost Medicaid coverage. So
there was a net loss of 220,000 children.
I think we are probably now at a position where the CHIP
gains are probably netting out so more children are many added
than we are losing. But, obviously, when CHIP was enacted in
1997, our purpose was to try to make sure that 3 to 4 million
children would be added to the rolls so, instead of at that
time 10 million children being uninsured, we should be closer
to 6 million. Unfortunately, today there are 11 million
children who are uninsured, of which 7.5 million children are
below 200 percent of the federal poverty line.
But if I leave you one message here, it is that--if there
is a mixed dream about children, with some good and some bad--
coverage for parents is a real nightmare. We will be releasing
a report next month that will take a look at the 15 States with
the largest number of uninsured adults, and there--unlike
children, for which there is a safety valve, namely the CHIP
program--there isn't much of a safety value for adults. And so,
as they get dropped from the Medicaid rolls, they don't have a
cushion to make sure that there are reductions in such losses.
I can share the figures for one State, Florida, which is by
no means the worst, but if is a State whose figures we already
relased. In Florida, we looked at the coverage of parents from
the period of January 1996 to December 1999, and the figures we
received from the State of Florida was that almost 83,000
parents lost Medicaid coverage. And this is very important
because low-wage workers, who are the group that we are really
focusing on, don't do very well in the employer-based system we
have today.
If you look at the statistics, you'll see that less than
half of those who work below $7 an hour in income receive an
offer of coverage through their employers. That does not mean
that they get coverage. They have an offer of coverage.
What makes it more troublesome is that, for low-wage
workers, they actually have to pay a higher amount in premiums
than higher-paid workers. I am not saying that they pay a
higher percentage of their income. I mean they pay higher
dollars in premiums. And so they suffer a double blow. They are
less likely to get coverage offered; and to the extent that
they have it offered in the workplace, they pay a higher
amount.
Let me leave you with this one statistic. In two-thirds of
the States, 32 States to be exact, if you are a parent and you
work at the minimum wage, $5.15 an hour, you are considered to
have too much income to qualify for Medicaid if you work full
time. That really is not much of an incentive to move from
welfare to work.
I look forward to talking later with you about what are
some of the administrative and legislative solutions that can
be implemented so that--both with respect to children and
parents--we can show some improvements in these troubling
developments. Thank you.
Chairman Johnson. Thank you very much, Mr. Pollack.
[The prepared statement follows:]
Statement of Ronald F. Pollack, Executive Director, Families USA
Madam Chairwoman and Members of the Committee:
Thank you for inviting me to testify today. Families USA is
a national non-profit organization dedicated to the needs of
health care consumers. We have been engaged in research and
advocacy about the impact of TANF changes on the Medicaid
program for some time. As an organization that focuses
exclusively on health care issues, we have not been engaged in
any evaluations of the successes and failures of welfare reform
except for the issue we are here to discuss today--the impact
that these changes have had on families' insurance status.
In May of 1999 Families USA released a report titled
``Losing Health Insurance: The Unintended Consequences of
Welfare Reform.'' This study was prompted by reports we began
receiving from around the country of Medicaid declines for low-
income families. Our analysis found that, as of 1997,
approximately 675,000 parents and children lost Medicaid
coverage and were uninsured because of changes associated with
welfare reform. In October 1999 we released a subsequent report
titled ``One Step Forward, One Step Back: Children's Health
Coverage after CHIP and Welfare Reform.'' This report examined
the 12 states with the largest number of uninsured children and
found that children's enrollment in federal-state health
programs (Medicaid and SCHIP) declined by 2 percent between
1996 and 1999. While SCHIP enrollment was increasing during
this period, these gains were offset by reductions in
children's Medicaid coverage--largely due to welfare reform.
We believe that there are three ways that eligible families
are not receiving the Medicaid coverage to which they are
entitled. The first is when people move from welfare to work.
Most people making this move wind up in entry-level jobs that
provide minimal salaries and no health care coverage. After
they leave welfare, most parents should remain eligible for
Transitional Medicaid (TMA) coverage--and their children are
most likely still eligible for Medicaid or SCHIP. Yet many of
these families are not receiving federally supported health
coverage after their TANF case is closed. These terminations--
many of which are clearly erroneous--are happening in
significant numbers. Washington State alone identified
approximately 100,000 family members who lost their Medicaid
when their TANF case was closed.\1\ As families start to meet
their time limits in TANF, this problem may become even more
severe unless states move quickly to address it.
---------------------------------------------------------------------------
\1\ ``Thousands Owed Medicaid,'' Spokesman Review, Spokane, WA,
September 15, 1999.
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Second, when families apply for welfare, they are often
diverted from filing an application as part of the states'
attempts to reduce cash assistance. Many families and some
caseworkers are unaware of the fact that families are still
eligible for Medicaid even if they are not receiving cash
assistance, and that families have a right to file a Medicaid
application and have that application processed within 45 days.
And finally, the significant publicity around welfare
restrictions has convinced many families that they are no
longer eligible for Medicaid, and, as a result, many families
are not coming to welfare offices to apply for cash assistance
and/or Medicaid. A recent study of families eligible for or
receiving Medicaid by the Kaiser Commission found that over 70
percent believed there are time limits on Medicaid, even though
this is not true.
While outreach and simplification efforts in SCHIP and
children's Medicaid will help to reach some of the children who
lost coverage due to welfare reform, the intent of the SCHIP
legislation was to reduce the number of uninsured children--not
to compensate for welfare reform losses. SCHIP would be even
more successful if a large part of its enrollment growth was
not simply compensating for losses among lower-income Medicaid
children.
Moreover, these efforts will do nothing to address the
significant numbers of parents who are losing Medicaid coverage
inappropriately. Families USA is currently working on a report
that examines states' own data with respect to parents who lost
Medicaid between January 1996 and December 1999. Our
preliminary findings indicate that these numbers will be
dramatic. In Florida alone, where we have already released our
data, enrollment of low-income parents dropped by 82,682 during
this time period. We know from work done by the Urban Institute
and others that only about one-fourth of parents moving from
welfare to work have employer-sponsored health insurance so it
is fair to assume that the vast majority of parents who lost
Medicaid are now uninsured. Many of these parents should have
received Transitional Medicaid (TMA) for at least six months if
they left Medicaid due to increased earnings. If they did not
have increased earnings, then they are most likely still
eligible under the Section 1931 family coverage category.\2\
For far too many parents, the reward for moving from welfare to
work is the loss of their health insurance coverage.\3\
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\2\ P.L. 104-193 created the Section 1931 eligibility category for
families based on income and resource standards established by each
state and that eligibility is unaffected by the receipt of cash
assistance.
\3\ The only scenario under which a parent could properly lose
their Medicaid, because of a TANF sanction, is in a state that has
elected to terminate coverage for parents who fail to meet work
requirements. Only 13 states have adopted this work sanction. Children
cannot be sanctioned in any situation.
---------------------------------------------------------------------------
I would like to turn now to ways these problems could be
addressed at the federal and state levels. As you know, the
Health Care Financing Administration (HCFA) issued guidance on
April 7th to the states about reinstatement of erroneously
terminated families, requirements related to the
redetermination process, and the need to fix computer systems
that have not been properly delinked. We believe that HCFA
should enforce this guidance and the requirements of Section
1931 aggressively, and we urge Members of Congress to
communicate with their Governors that they expect the federal
law to be upheld.
States must also move aggressively to fix problems
associated with delinking cash assistance from Medicaid. With
prodding from advocates, a few states--namely Washington,
Pennsylvania, and Maryland--have developed comprehensive plans
to reinstate families wrongfully terminated and to fix problems
in their computer systems that are causing illegal
terminations. We believe that Washington State, in particular,
is a good model for other states to look to as they develop
their plans to comply with the HCFA guidance. Washington State,
as I mentioned, had a significant problem with erroneous
terminations, but after negotiating with advocates, agreed to
reinstate these families and alter their computer systems to
prevent the problem from reoccurring.
Money is already available to the states to fix many of
these problems. Last year Congress extended the life of the so-
called ``Medicaid-TANF delinking fund'' which was created in
the welfare reform legislation to help states cover costs
associated with delinking. These funds can be used by states to
pay for reprogramming computer systems, training caseworkers,
and doing outreach. Most states still have considerable sums
remaining in their allotments, and most activities are funded
at a 90/10 federal/state match.
States must also turn their attention to simplifying and
streamlining outreach and enrollment procedures in their
Section 1931 family coverage Medicaid category as they have
done in their child-only Medicaid category. In general, states'
requirements for enrollment in family-coverage Medicaid are
significantly more onerous than requirements for child-only
Medicaid. For example, only 8 states still have an assets test
for their child-only Medicaid category, but 40 have an assets
test in their Section 1931 category. This creates a barrier for
parents and their children who are enrolling through the
Section 1931 family-coverage category. The good news is that
many simplification efforts for children and their parents do
not require changes in federal law; states are able to do so
already.
Also, states should take advantage of the opportunity
created by Section 1931 to expand their eligibility levels for
low-income parents. Currently eligibility levels for parents
are extremely low. In almost two-thirds (32) of the states,
parents are deemed to have too much income to qualify for
Medicaid if they are working full time at the minimum wage
($5.15 per hour). The median state eligibility standard for
parents is at 61 percent of the poverty level. Nine states have
already expanded eligibility, and others are currently
considering similar expansions. Beyond the obvious benefit of
allowing parents to remain eligible as they move to low-paying
jobs, these expansions also effectively break the historical
link between Medicaid and welfare. And research has shown that
covering parents will result in more children getting covered.
Finally, while the statutory requirements of Section 1931
are clear, we believe there is much more Congress can do to
ameliorate the situation and create incentives for families to
go to work. The first is to extend and simplify Transitional
Medicaid, which is due to expire on September 30, 2001. Current
statutory reporting and eligibility requirements are complex,
burdensome on families, and confusing. We believe that the best
way to reform TMA would be to require 12 months of continuous
coverage when a family leaves Section 1931 Medicaid due to
increased earnings. This would ease state administration and
greatly simplify outreach and education efforts. An additional
year of health coverage is the least we can do for families
making the difficult transition from welfare to work.
Second, Congress should extend certain options, like 12-
month continuous eligibility, to parents. Currently, states are
only permitted to offer 12-month continuous eligibility to
children. This would allow a state to enroll the whole family
for 12 months with no separate redetermination for parents
needed.
And finally, we believe that the high levels of uninsurance
among low-wage working families will not be addressed until
Congress takes action to extend coverage to all families below
200 percent of poverty. Employment-based coverage for low-wage
working families is often not offered and, if it is, it is
often unaffordable. Only 43 percent of employees working for $7
or less per hour are offered health benefits by their employer.
And in firms where the typical wage is less than $7 per hour,
the average monthly employee contribution for the lowest-cost
employer plan is $130 per month as compared to firms where the
typical wage is more than $15 a hour where the average monthly
employee contribution required is $84.
Covering these families would be most efficiently
accomplished through an expansion of the Medicaid and CHIP
programs similar to the FamilyCare proposal in the President's
budget this year. We urge you to consider such an expansion to
provide essential support to low-wage working families who are
struggling to make ends meet.
Chairman Johnson. Ms. Lyons.
STATEMENT OF BARBARA LYONS, PH.D., VICE PRESIDENT, HENRY J.
KAISER FAMILY FOUNDATION, AND DEPUTY DIRECTOR, KAISER
COMMISSION ON MEDICAID AND THE UNINSURED
Ms. Lyons. Thank you for the opportunity to testify on how
welfare reform has affected Medicaid coverage of low-income
families.
I am Barbara Lyons. I am Vice President of the Henry J.
Kaiser Family Foundation and Deputy Director of the Kaiser
Commission on Medicaid and the Uninsured. The Commission is a
major initiative of the Kaiser Family Foundation and conducts
analysis on health care coverage and access issues facing the
low-income population.
Today I want to emphasize several findings that have
emerged from studies that we have conducted.
First, Medicaid is an important source of health coverage
for low-income families. In fact, Medicaid is the only source
of health coverage for the poor. When poor families don't have
Medicaid, they are generally uninsured, suffer worse access to
care and poorer health outcomes.
Our research shows that families understand the importance
of Medicaid coverage, low-income parents overwhelmingly think
that Medicaid is a good program and that Medicaid coverage
helps them access doctors and helps them pay for prescription
drugs when their children are sick.
In recognition of the important health benefits of Medicaid
coverage, policy efforts have been directed at expanding the
program's reach beyond its initial welfare origins to more
broadly support low-income families. However, the recent
declines in Medicaid coverage are cause for concern. Between
1995 and 1997 the number of kids and parents who had health
insurance through Medicaid fell by over 1.6 million, including
500,000 children. These declines were steepest for welfare
reform-related enrollees and were not offset by increases in
coverage through other Medicaid categories.
Our research has identified four factors that have
contributed to these declines.
First, there is confusion over the Medicaid rules. As we
heard earlier, they are confusing. The recent policy changes
that have occurred have resulted in misunderstanding among low-
income families about whether they qualify for Medicaid and,
importantly, whether welfare rules also apply to Medicaid
coverage. Many parents incorrectly believe that Medicaid
benefits are time limited and only available to families
receiving welfare, not working families.
Second, inappropriate administrative action has, as Marilyn
Ellwood referred, resulted in ineligible families losing
Medicaid coverage. Updating computerized eligibility systems to
reflect current policy has been a major challenge for the
States and in the interim some families have received incorrect
information which has resulted in the loss of Medicaid
coverage.
Third, the Medicaid enrollment process is often not
accessible to working families. The major barriers to Medicaid
enrollment reported by parents are hurdles in the
administrative process. Lengthy application forms, required
face-to-face interviews at offices and substantial
documentation requirements are significant barriers that deter
low-income families from initiating and completing Medicaid
application. The Federal rules here are minimal, leaving States
with substantial opportunities to simplify enrollment, but
States have often been slow to implement the streamlined
procedures that are necessary when working families are
applying for Medicaid.
Finally, many families who succeed in getting through the
enrollment process initially subsequently lose coverage despite
the fact that they continue to be eligible.
Our most recent data, which will be discussed in the next
panel, shows an upturn in Medicaid enrollment in 12 out of 21
study States during last year. Some States have expanded
eligibility, engaged in outreach, improved enrollment
procedures to successfully reach more low-income families
eligible for Medicaid and CHIP. Despite these gains, Medicaid
enrollment in June, 1999, remained below June, 1997, levels in
most States.
In conclusion, I want to emphasize that Medicaid plays a
critical role in ensuring access to care for low-income
families. Reaching Medicaid's full potential as a health
coverage program remains a critical challenge. To accomplish
this goal, Medicaid needs to be viewed as a health insurance
program for working families. The legislative authority is in
place to make Medicaid and welfare policy work together to
assure that low-income families are not penalized by losing
their Medicaid when they go to work. If these efforts are broad
and successful, the number of uninsured could be substantially
reduced.
Thank you for the opportunity to testify today.
[The parpered statement follows:]
Statement of Barbara Lyons, Ph.D., Vice President, Henry J. Kaiser
Family Foundation, and Deputy Director, Kaiser Commission on Medicaid
and the Uninsured
Thank you for the opportunity to testify on how the
Temporary Assistance for Needy Families (TANF) program has
affected Medicaid coverage of low-income families. I am Barbara
Lyons, Vice President of the Henry J. Kaiser Family Foundation
and Deputy Director of the Kaiser Commission on Medicaid and
the Uninsured. The bipartisan Commission, a major initiative of
the Kaiser Family Foundation, conducts analysis and sponsors
research on health care coverage and access issues facing the
low-income population.
Medicaid coverage is an important source of health
insurance coverage for low-income families and helps them
obtain needed health care services. Welfare reform has
unfortunately contributed to unintentional declines in Medicaid
enrollment and increased numbers of uninsured Americans. These
gaps in Medicaid's coverage can be remedied and states
currently have the tools to fix these problems in Medicaid
coverage for low-income families. I will address the role that
Medicaid plays for low-income families, the recent declines in
Medicaid enrollment, and problems in assuring Medicaid coverage
that resulted from welfare reform.
Medicaid is an Important Support for Low-Income Families
Medicaid is a major health coverage program for low-income
people that is jointly financed by the federal and state
governments and administered by the states within broad federal
guidelines. Today, Medicaid covers 41 million Americans,
including 21 million low-income children (nearly 1 in 4 of all
children in the U.S.). Medicaid is the primary source of health
coverage for the poor, covering 41 percent on the non-elderly
population (Figure 1). Because Medicaid does not cover all the
poor and covers fewer near-poor with incomes between 100 and
200 percent of poverty, almost a third of the poor and near-
poor are uninsured. Without Medicaid, the number of uninsured
would be much higher because employer-based health insurance is
often not available or affordable for low-income working
families.
The consequences of being without health coverage are far
reaching for both children and adults. National surveys
document that children who are uninsured are much less likely
to have regular physician check-ups and to get needed
medications, eyeglasses, mental health services and dental
care. Uninsured children are 70 percent more likely than those
with insurance to go without medical care for common childhood
conditions such recurring ear infections and asthma. Uninsured
children are also 30 percent less likely to receive medical
treatment for injuries than those with health coverage.
Uninsured adults face even greater barriers to care, often with
serious health consequences.
Having Medicaid coverage makes health care accessible for
low-income families. Poor children with Medicaid use health
care services at rates comparable to children with higher
incomes and private coverage, while uninsured poor children lag
far behind (Figure 2). When families lose Medicaid and become
uninsured, they are far more likely to have problems getting
care than those who have continuous Medicaid coverage (Figure
3).
Families understand the importance of Medicaid coverage.
The Kaiser Commission has conducted extensive survey and focus
group research on low-income families. Overwhelmingly, this
research shows that nine out of 10 low-income parents think
that Medicaid is a good program. Low-income parents appreciate
Medicaid because it provides access to health care services and
is affordable. They know that Medicaid will help access doctors
and pay for prescription drugs when their children are sick.
Medicaid helps assure that children get a healthy start in life
and that low-income working families are not saddled with
burdensome medical bills.
In recognition of the value of Medicaid coverage, the
federal government broadened eligibility criteria for children
and pregnant women in the late 1980s. Eligibility for children
and pregnant women is now based on family income related to the
federal poverty level, rather than welfare criteria (Figure 4).
States are required to cover pregnant women and preschool
children in families with incomes below 133 percent of poverty
and school-age children below 100 percent of poverty, with
coverage for older teenagers (age 16 to 18) continuing to be
phased in. By September 30, 2002, all poor children through age
18 will be eligible for Medicaid.
Medicaid is integral to efforts to assure access to health
care services for low-income families in all states. Recent
policy efforts have been directed at expanding the program's
reach beyond its welfare origins to more broadly support low-
income working families. These changes resulted in an
additional 11 million low-income people, primarily children,
being covered by Medicaid during the early 1990s. Medicaid's
role emerged as an essential building block to expand coverage
to reach low-income families who otherwise would be without
health coverage and to stem the rise in the uninsured.
Recent Declines in Medicaid Coverage
The number of Medicaid enrollees grew steadily throughout
the early 1990s increasing from 28.9 million in 1990 to 41.7
million in 1995 due primarily to increased coverage of children
and pregnant women. Reversing these gains in expanding coverage
to low-income families, Medicaid enrollment has declined in
recent years with an erosion in Medicaid's protections for low-
income families (Figure 5). Since 1995 Medicaid enrollment has
declined, dropping to 40.6 million in 1997.
Between 1995 and 1997 the number of children and parents
who had health insurance through the Medicaid program fell by
about 1 million, while the number of uninsured increased.
During this period, total annual Medicaid enrollment fell by
5.5 percent for adults and 1.4 percent for children (Figure 6).
Medicaid participation fell the most steeply for welfare-
related beneficiaries. The number of Medicaid beneficiaries
receiving cash assistance fell by 13 percent for adults and 11
percent for children from 1996 to 1997. Some individuals losing
cash assistance remained enrolled in Medicaid under other
eligibility categories, but not enough to offset the decline in
cash assistance related enrollment (Figure 7).
The decline in Medicaid enrollment was unexpected--given
the continued implementation of Medicaid eligibility
expansions--and of concern, in the face of continued increases
in the number of uninsured. Several recent studies examining
the decline in Medicaid enrollment have identified welfare
reform policies, obstacles in Medicaid eligibility and
enrollment systems, and high employment rates as prominent
reasons.
These trends emphasized the need to have timely Medicaid
enrollment data. Based on states' own monthly Medicaid
enrollment reports, the most recent data shows an upturn in
Medicaid enrollment in 12 out of 21 study states between June
1998 to June 1999. These increases are, in part, related to
eligibility expansions under Medicaid and CHIP to reach
children at higher incomes, as well as efforts in some states
to inform families about health coverage available through
Medicaid and the new Children's Health Insurance Program (CHIP)
and to make children's enrollment easier. Despite this recent
upswing, Medicaid enrollment in June 1999 remained below June
1997 levels in all but six (Arkansas, Florida, Indiana,
Massachusetts, New Mexico and Oklahoma) of the 21 study states
(Figure 8).
Welfare Reform and Health Coverage of Low-Income Families
In enacting welfare reform, Congress did not alter the
entitlement to Medicaid and intended to preserve Medicaid
coverage. The new law says that states are required to continue
to cover families who meet the welfare eligibility requirements
in effect in the state as of July 16, 1996 and allows states to
expand Medicaid to cover more low-income families. Prior to
TANF, families receiving cash assistance were automatically
enrolled in the Medicaid program.
The new law ``delinked'' eligibility for welfare and
Medicaid, so receiving cash assistance now has no bearing on
Medicaid eligibility. Instead, eligibility for low-income
families is based on a new Medicaid category, Section 1931,
that replaces the ``AFDC-related'' category. TANF beneficiaries
are eligible for Medicaid, as are families who are not
receiving welfare but meet Medicaid's eligibility rules. In
addition, families leaving welfare to work are entitled to
Transitional Medical Assistance (TMA) for 6 to 12 months. Many
children in low-income families who are not receiving welfare
are likely to be eligible for coverage through Medicaid's
poverty-related categories or CHIP. Thirty-four states now
provide coverage to children up to at least 200 percent of
poverty through Medicaid or CHIP and today all states are
required to provide Medicaid to children under poverty up to
age 16.
Although fewer families are now applying for welfare, they
may still be eligible for Medicaid for themselves or their
children. Moving families from welfare to the workforce may
have reduced the need for cash assistance, but has not
eliminated the need for help with health insurance coverage.
The availability of Medicaid is of vital importance to low-
income working families because health insurance is expensive
and insurance coverage or help in paying the premiums is not
often provided by their employers. A key challenge is how to
assure Medicaid coverage for eligible families who are no
longer applying for cash assistance, as well as those who are
transitioning from welfare to work.
Analysis by the Urban Institute shows that many parents who
have left welfare have obtained low-wage jobs concentrated in
service, sales and trade industries--the sectors least likely
to provide job-based health coverage. These families often face
serious struggles providing food for their families and paying
their housing costs. A significant portion of parents who left
TANF have disabilities or health conditions that may affect
their ability to succeed in the workplace if they lose health
coverage. Families leaving welfare are often not able to retain
health coverage; 40 percent of women and 25 percent of children
previously on Medicaid were uninsured one year later (Figure
9). Similar difficulties in securing health coverage are also
faced by families with low-wage workers who have not received
welfare assistance.
Although states also can extend greater Medicaid coverage
to working parents to help assure family coverage, in most
cases, adult eligibility remains tied to the welfare rules.
Income levels for adults are often set considerably below the
federal poverty level and restrictive asset tests are commonly
employed. In 32 states, a parent working full-time at a minimum
wage job would not be eligible for Medicaid, even if they lack
access to employer-based coverage. Thus, efforts to cover
children at higher income levels have not often translated to
their parents, resulting in coverage disparities within
families.
The wide variation across states in Medicaid's eligibility,
combined with differences in the availability of employer-based
coverage, has led to wide differences in the uninsured rate
among the states. State uninsured rates for their low-income
populations (less than 200 percent of poverty; $27,300 for a
family of three in 1998) range from a low of 15 percent in
Vermont to 45 percent in Arizona and Texas. Despite the
Medicaid expansions and efforts to broaden coverage for
children, in 1998 nearly 8 million low-income children were
uninsured. Fifteen states have over 27 percent of low-income
children without any health coverage (Figure 10).
Problems in Assuring Medicaid for Eligible Families after
Welfare Reform
Welfare reform resulted in a dramatic restructuring of
goals in state welfare offices. Great emphasis was placed on
securing employment and diverting families from cash
assistance. This new focus resulted in a transformation of the
case worker's role. Priorities shifted from determining
eligibility for cash benefits to promoting employment among
potential applicants. As this major redirection of welfare
offices was occurring, considerably less attention was devoted
to assuring that Medicaid coverage was reaching eligible
families. Confusion about Medicaid eligibility rules, gaps in
state information systems, and hurdles in the enrollment
process precludes eligible families in many states from
receiving Medicaid coverage.
These barriers to Medicaid enrollment can be surmounted
under current law and some states have made progress in
overcoming these problems. However, more effort needs to be put
toward making Medicaid accessible as a health coverage program
for low-income families. The Health Care Financing
Administration (HCFA) has recently issued guidance that
clarifies the steps that states must take to assure that
eligible families are not losing out on Medicaid coverage in
the face of welfare reform.
Confusion over Medicaid Rules
Changes to welfare, as well as immigration, policy have
resulted in confusion among low-income families about whether
they qualify for coverage. A national survey of low-income
parents, conducted by the Kaiser Commission last year, revealed
considerable misunderstanding about current Medicaid
eligibility rules. Many parents believed that Medicaid benefits
were time limited, not available to working or two parent
families, and limited to families receiving welfare (Figure
11). Interviews conducted by Commission staff with case workers
in three cities also revealed lack of understanding of Medicaid
eligibility rules among case workers and little agency support
to navigate these rules to assure Medicaid coverage for
eligible families, despite an appreciation among the workers of
the importance of Medicaid coverage. If the workers are
confused, it is not surprising that many low-income families
are confused as well.
Inappropriate Administrative Action
Due to the complexity of eligibility rules, most states
depend heavily on their automated eligibility computer systems
to process applications for Medicaid and welfare. Yet, these
systems were often designed to meet welfare, not Medicaid,
eligibility needs and, in some cases, incorrect information has
been transmitted to enrollees about their Medicaid eligibility
when the two programs were ``delinked.'' State computer systems
have sometimes automatically closed families' Medicaid cases
when their welfare cases were closed, although states are
required to separately determine whether or not a family is
eligible for Medicaid under any eligibility category before
terminating Medicaid coverage for any member of the family.
Because changing computer systems takes time, some states
have employed temporary stop-gap measures, such as supervisor
review of all TANF cases being closed, to avoid erroneous
Medicaid terminations. The recent HCFA guidance outlines the
specific steps that states must take to assure their computer
systems are not inappropriately terminating Medicaid coverage.
There is federal money available through Medicaid
administrative funds, as well as the TANF $500 million fund,
that states have used to varying degrees to update their
computer systems.
Medicaid Enrollment Processes Are Not Accessible to Working
Families
With the increased emphasis on work, Medicaid application
and enrollment processes need to be designed with working
families in mind. For most workers who have job-based coverage,
the enrollment process is facilitated by the employer. In
contrast, to obtain Medicaid coverage for themselves or their
children, low-income parents may have to take time away from
work or other responsibilities to apply for Medicaid. Lengthy,
complicated enrollment forms, required face-to-face interviews,
and substantial documentation requirements are significant
barriers that deter low-income parents from initiating and
completing the Medicaid enrollment process (Figure 12). In
addition, many working parents do not want to go to a welfare
office to obtain health coverage for their family.
Hurdles in the Medicaid enrollment process often stand in
stark contrast to efforts underway to facilitate CHIP
enrollment. The implementation of streamlined enrollment
procedures under CHIP has spurred a number of states to take
similar action in their Medicaid programs for children (Figure
13). While a number of states now allow mail-in applications
for children applying only for Medicaid or CHIP benefits, more
lengthy applications and face-to-face interviews with staff are
required in most states if parents or entire families are
seeking Medicaid coverage. Federal requirements are minimal
leaving states with substantial opportunities to simplify
family eligibility and enrollment processes, but states have
often been slow to implement streamlined procedures when
families are applying for Medicaid coverage. This disparity in
application processes for families may result in the poorest
families facing the most stringent rules to obtain Medicaid.
Many families who succeed in getting through the Medicaid
enrollment process, subsequently lose coverage, despite
continuing eligibility. Federal rules require an annual re-
determination that can often be done by mail. However, many
states assess eligibility more frequently and require families
to complete lengthy forms, go to the welfare office in person
for an interview, and furnish many documents. Simplifying this
process would help eligible families stay continuously covered.
Families Outside the Welfare System Are Left Out of Medicaid
The dramatic drop in families receiving cash assistance
means that many uninsured low-income families may be eligible
for Medicaid assistance, but have little connection to the
welfare system. Historical enrollment approaches that rely on
the welfare system as the primary route to Medicaid are not
sufficient and may be counterproductive. New vehicles that
reach and enroll eligible low-income families where they are--
at work, school or day care--are needed.
Reaching these families is increasingly important, in light
of welfare strategies that focus on diversion and work, as well
as the recent burst in job growth that has led to greater
employment, but not necessarily linked to health coverage. Only
54 percent of low-wage workers ($7 per hour or less) are
offered health insurance coverage through their jobs compared
to 96 percent of higher-wage workers (Figure 14). When health
coverage is available, the monthly employee contribution for
family coverage is considerably higher in businesses that
employ many low-wage workers. Thus, low-wage workers may be
unable to afford family coverage.
In this environment, the challenge to states is to make
concerted efforts to inform eligible families about Medicaid,
work with community-based organizations and employers to reach
and enroll children and their parents, and implement the
changes necessary to facilitate the enrollment process and keep
families continuously covered. Barriers that impede Medicaid
enrollment clearly exist today, but are not inherent to the
program. These problems have practical, feasible solutions that
all states can implement.
Conclusion
We need to recognize the important role that Medicaid plays
today in assuring access to health care for the low-income
population. Despite gaps in coverage, Medicaid is the major
source of health coverage for children and parents in low-
income families. Reaching Medicaid's full potential as a health
coverage program for low-income families remains a critical
challenge. Concrete steps need to be taken to assure that low-
income families who are eligible for Medicaid can obtain
Medicaid coverage, whether they are currently receiving
welfare, are transitioning from welfare to work or have no
connection to the welfare system.
To accomplish this goal, Medicaid needs be and operate as a
health insurance program for working families that is distinct
from welfare assistance. The legislative authority is in place
to make Medicaid and welfare policy work together to assure
that low-income families are not penalized by losing access to
Medicaid coverage when they work. If these efforts are broad
and successful, the number of uninsured in the United States
could be substantially reduced.
Thank you for the opportunity to testify today. I welcome
any questions.
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Chairman Johnson. Thank you all very much for your
testimony, and I certainly look forward to the testimony of the
next panel so we can get a better insight as to what mechanisms
are having an effect on overcoming the problem of delinking. I
think delinking in the end was certainly the right answer.
Certainly one of the problems with the old welfare program
was it kept people on welfare because they needed medical
coverage, and we don't want to get back to that, although
clearly we do want to realize the potential of all of the
coverage laws that we have on the books to provide coverage.
According to the law, any child under poverty is eligible
for coverage up to 17, 18, 19 and pregnant women and children
up to 133 percent, and the disappointing enrollment--I was very
interested in my colleague from California's comment in his
county. We certainly have experienced the same thing in
Connecticut. How do we get the current programs to be more
effective in people's lives?
And I want to congratulate the administration, Ms. Mann,
for a lot of different initiatives, and I was glad you ran them
all down. I think all of the dialog between you and the States
culminating in regulations that do clarify a number of things
go to some of the problems that Ms. Ellwood alluded to.
I would like to ask Ms. Ellwood a couple of things. I want
to keep it brief, because we want to get to the next panel and
be done before noon.
On the issue of complexity, is there any difference between
those 26 States that have used the more comprehensive waiver
and some States that have better integrated CHIP with Medicaid?
I ask this question because there was a Rockefeller
Institute study on how welfare reform was working, and it was
on the early efforts, and it was very clear to me--in fact,
quite stark--that those States that had totally cross-trained
people to eligibility for benefits and also work and employment
issues were doing a far better job of helping women move from
welfare to work but also a much better job in supporting their
families.
Is there any conjunction between the States that deeply
integrated their bureaucratic approaches and those who use the
waiver system and this issue of complexity? In other words, are
those States using waivers? Are those States cross-training
doing much better in terms of providing Medicaid benefits to
people who come into the welfare to work system or not?
Ms. Ellwood. I'm sorry, I don't think that I can answer
that. Perhaps Cindy, you know that.
Ms. Mann. I think there is a mix of strategies, and I
actually think the next panel will identify some of the mix.
What I have seen that works in States is, on the one hand,
integration of the staff so that Medicaid is part of the
welfare reform message, that they know the rules. On the other
hand, some States have found that outstationing Medicaid
eligibility so that they are very separate and independent, not
to the exclusion of the welfare office.
The other thing is the importance of systems changes. We
have seen a lot of States with very antiquated systems, and
their computer systems have not kept up with the changes.
Whereas some States have what are called cascading systems that
trickle through the various categories with Medicaid and ensure
that benefits are maximized and families have the support.
Chairman Johnson. Mr. Pollack?
Mr. Pollack. I think there are different methods of systems
integration that could help this problem.
First, integrating CHIP and Medicaid is very important,
having the same application process, shortening the
application. In California, there was--Congressman Stark would
know--a 28, 29 page application. It has been shortened to two
pages.
Mr. Stark. But it is twice as complicated in two pages as
it was in 28.
Mr. Pollack. More efficiently complicated in shorter pages.
We certainly can do more to tie people into the school feeding
programs. A lot of those people are eligible. We certainly can
do more on things like presumptive eligibility where programs
like WIC and Head Start can certify people on a temporary
basis. In short, there are some systems changes that I think
can help this problem.
Chairman Johnson. Thank you.
Mr. Cardin.
Mr. Cardin. Thank you, Madam Chair. And I thank you for
your testimony, and I appreciate what you are doing.
There seems to be here a major disconnect between good
policy and incentives for good policy. If welfare reform is to
succeed, it is not just the cash assistance. We need to deal
with the earned income tax credit to make work pay, we need to
deal with child care so families have safe and affordable
places for their children to be, and we also have to have
health insurance.
I was struck by the comment you made that people in the
welfare departments get recognized for people getting off
welfare but they don't for enrolling people in Medicaid. We
took some steps in the TANF performance bonus to reward States
that have better performance on enrolling families in food
stamps and Medicaid, and I think that is the type of
initiatives that we are going to need to take a look at.
Because, frankly, I served for many years in the State
legislature and know the pressure that is on the State Medicaid
directors. It is fine for them to say let's correct our
computer programs, but if that is going to mean a larger
expenditure of State funds, the budget director is going to
give them a bit of a fit.
Ms. Mann, I noticed that you had to send a directive out to
the States saying, look, if you knock people off
inappropriately, you have to put them back on. My question is,
why do you knock them off inappropriately? It is one thing to
say that families leaving welfare may not understand the rules
concerning Medicaid eligibility, but our States should
certainly understand the rules, and it should not take 4 years
to correct a computer program that is knocking people off of
receiving the health care that they deserve and are entitled
to.
The point that Mr. Stark made, we require people to enroll
and then we not only make it difficult for them to understand
it and difficult to enroll but then we knock them off. We take
action that prevents them from getting these benefits.
I would hope that we could figure out ways to really
incentivize our States to do a much better job, to provide some
financial incentives, to provide clear direction that we think
children being enrolled in Medicaid is one of our goals or
getting children health insurance is one of our goals, and it
should not have to be in a waiver program, that we can get a
simplified form that families can understand and fill out.
There should be other ways to get to simplified approaches for
families to understand that they are eligible for the Medicaid
Program or the CHIP program. We should be a lot more seamless
than we are right now so we get children health insurance so
that welfare can succeed, getting families secure in a work
environment.
Ms. Mann, I appreciate your comments.
Ms. Mann. I want to make it clear, Congressman, that States
do have the flexibility under current law and don't need a
waiver to simplify their application process, and many States
have done so with children, but not necessarily with families
with children, and that's where the welfare link has been the
problem. There are a few States, Utah is one, Indiana is one,
where the application for families with children has been
simplified as well, but it is the exception not the rule.
But the flexibility is provided under Federal law, and
States don't need a waiver in order to accomplish that. You are
right. That is a critically important part of the challenge
ahead.
And the other point is what Ms. Ellwood raised, States that
have simplified the application process have not necessarily
simplified the redetermination process. It is easier for some
kids to get into the program, but then it is difficult to
maintain eligibility.
Mr. Cardin. If they can do it and some States aren't doing
it, maybe you need a club rather than an incentive.
Mr. Pollack. Two points. We talked earlier about the $500
million that was designed to help make the transition, but,
unfortunately, a good number of the States have not used this
money. And the Chair appropriately said there is a very
favorable Federal-State match, 90 to 10, but to date only about
25 percent of those dollars have been spent by the States. A
lot of States have not pulled that money down.
Second, I want to get back to a point that Mr. Watkins made
earlier. There is a clear relationship between children's
coverage and what the parents do. We know there is always a
relationship between what happens to kids and what happens to
parents.
At some point, we are going to have to take cognizance of
the fact that when parents do not get enrolled in these
programs because there are very different eligibility standards
for those parents it will have some impact on whether the
children enroll. If you can put the children in the same
program with the same eligibility standards, you have a much
better chance of improving our outreach to the children because
it means that the parents get enrolled at the same time.
I know that is going to require some legislation or the
States are going to have to make use of the current Medicaid
matching formula. I think we need to provide some more dollars
to the States to give them an incentive to make sure that the
parents' eligibility standards match the eligibility standards
for children.
Chairman Johnson. Thank you.
Mr. McCrery.
Mr. McCrery. Mr. Pollack, you mentioned that low-wage
employees pay more in premiums for their insurance than high-
wage employees. Do you know how our tax system treats low-wage
employees vis-a-vis health insurance versus high-wage
employees? Do you have any thoughts on that?
Mr. Pollack. Well, there is no question that our current
tax system does provide a greater tax break in terms of the
treatment of employer-provided coverage for those at higher
income brackets. There is no question that is true. That tax
break is a regressive tax break. You are right about that.
But the point I was trying to make there is different. I
think all of us expect that low-wage workers pay a higher
percentage of their incomes on premiums because the
denominator, their incomes, are lower. But, in fact, the
numerator is actually higher. That is a rather startling
finding.
Mr. McCrery. One reason is our convoluted insurance market.
Most low-wage employees work for small businesses, and small
businesses are in a different insurance market than GM or PGP
or IP so they have to pay more for their insurance than those
big companies and generally their margins are lower so they
can't afford to pay as great a share of the premium as the
largest companies. So it is a cascading effect that all falls
on the low-wage employee to his detriment.
Mr. Pollack. Mr. McCrery, you are right about that point.
I want to emphasize that these findings that the low-wage
workers pay a higher amount of money on premiums, that is
irrespective of whether they are in small employment situations
or larger employment situations. If you keep those things
constant, you will still find that those companies which
essentially hire low-wage workers require those workers to pay
more in premiums.
Mr. McCrery. That may be as well. But in addition to the
tax system disadvantaging low-wage employees whose employers
provide them insurance, it certainly disadvantages those whose
employers who don't provide them insurance?
Mr. Pollack. Sure.
Mr. McCrery. Because they have to buy their own insurance
on the individual market. Not only do they pay higher premiums,
they get no tax deduction and no exclusion from wages for
purchasing that insurance, so they are really disadvantaged.
I say all of this to not take away from the focus of this
hearing, because I think it is important to try to understand
what is happening with respect to Medicaid and welfare reform,
but I come from a State, Louisiana, who has for decades
provided free health care, Charity Hospital in Louisiana, and
anybody who wants health care can get it if they can get to
Charity Hospital. We also have a fairly high Medicaid
enrollment in Louisiana. We have done a pretty good job in
getting people enrolled in Medicaid and keeping them enrolled,
but a lot of our health indicators are down at the bottom.
I think the answer is not, generally speaking, to get more
people into Medicaid, more people into a government health care
program. The answer is to raise the income level of people to
get people out of poverty, which we are succeeding in doing.
I have the statistics that I asked about from the Census
Bureau. The poverty rate among children has come down every
year for the past 5 years. For the last year we have available
is 1997--I am sorry, 1998, and 18.9 percent of children were in
poverty, and that is too many, but it is the first year since
1980, since 1980, 20 years ago, that the poverty rate for
children has been significantly below 20 percent. We are making
progress. We are doing the right things I think to extricate
folks from the bad health environment.
I believe that we ought to focus on getting people real
insurance, private insurance; and to do that we ought to
reexamine our tax system and the way we treat poor people in
this country through the tax system and low-income workers
particularly through the tax system. Reallocate what we are
already spending through the tax system to help people who need
help to get private insurance. I think people with private
insurance are more likely to get preventive care and go to the
doctor than they are if they are on a government program or if
they have just available a free clinic or a Charity Hospital
like we do in Louisiana.
Mr. Pollack. Mr. McCrery, your comment about using the tax
system for the population at large, I think can be an
interesting discussion. For the lower income population,
however, I don't think that the tax system is the most
efficient way of expanding coverage. It may be at some point on
the income scale--I don't know what that arbitrary figure is.
At some arbitrary figure we may want to encourage people to
obtain employer-based coverage through changes in the tax code.
But to lower income people, many of whom don't pay taxes, it
makes little sense.
Mr. McCrery. Let me interject, because we have to go vote.
You misunderstood. I don't mean to use the tax system, I mean
to recoup the money from folks like you and me and give it to
low-income workers to get them insurance.
Mr. Watkins. [Presiding.] Let me say I am chairing this
because Ms. Johnson is voting. Mr. Stark.
Mr. Stark. I want to thank the panel for their
contribution, particularly Families USA and the Kaiser Family
Foundation, Mathematica and for the work that they do in trying
to keep us informed.
I must say, Ms. Mann, that health and human services
continues to--somebody over there must have that stamp with
happy face, happy face. How anybody can call the fact that we
still have 10 million kids uninsured encouraging? There has to
be another word. Encouraging ought to be stricken from the
bureaucratic vocabulary over there, because it is not
encouraging at all. You may have to support a bankrupt welfare
reform bill, but it really falls--it becomes almost ludicrous
to have Health and Human Services come back here time after
time and never once--never once in this administration since
1992 have they ever come back and said things are not so good.
I hate to tell you, except for the stock market, things are
getting worse and particularly for children, and your
department won't admit it or won't see it.
Now how the hell we are supposed to solve a problem if the
administration department that is charged with overseeing it
can't see the problem and figures that they can make the
problem go away by just saying it is OK through, first of all,
almost childish research? I have talked to a dozen families
around the country. That is not research. And to come and tell
us, because the Medicaid enrollment has dropped by 1.3 percent,
we have encouraging results makes our job difficult.
We are just not getting--we get it from nongovernmental
organizations, a much better look at what is going on; and it
is disappointing that the executive branch of the government
comes back and paints over, glosses over the problems. We are
never going to solve them, and I hope that you can take this
back right on up to Secretary Shalala. To put a happy face on
the almost obscene treatment and condition of children which is
getting worse through a program that our administration
supported is difficult. I would like to think that we could
admit at some point that we may have made some mistakes and set
about correcting them, but if we cannot see the mistakes, we
are never going to do it.
Mr. Watkins. I have just one comment. We have a short-term
goal, short term because of welfare reform, but in the long
term we should be trying to get the income level up in this
country and the insured and get them off. That is the thing. We
don't want to get a welfare health system established.
I think there is a short-term and a long-term phase of this
whole program. I hope we are in a short-term and long-term
phase, and they are two different types of objectives.
I guess at this time you are dismissed, and we will take
the second panel. Chairwoman Johnson is going to be back in a
moment; and, if not, I am going to miss the vote.
I want to take the prerogative as the Chair to start from
my left to your right. Ms. Mitchell, being from my home State,
I want to make sure that I get back in time for her testimony
and all of the good things that are happening in Oklahoma, but
some things that I want to visit about.
So, Mr. Winstead, would you like to start?
First, I may need to recess until she gets back. Why don't
we recess. She is on her way back, and I will go vote, and I
will be back.
[recess.]
Chairman Johnson. [presiding.] Mr. Cardin will be here
shortly, because of the constraints of the day. Let us begin.
The second panel is Dr. Vernon Smith, who is the Principal
of Health Management Associates from Lansing, Michigan; Don
Winstead, Welfare Reform Administrator, Florida Department of
Children and Families; Kathleen Gifford, Assistant Secretary,
Indiana Office of Medicaid Policy and Planning; and Lynn
Mitchell, Oklahoma State Medicaid Director.
I appreciate your being here. It is impossible to evaluate
the problems with Federal policy without hearing from the
people like you that are out there trying to make the programs
work. So, Dr. Smith, if you will begin.
STATEMENT OF VERNON K. SMITH, PH.D., PRINCIPAL, HEALTH
MANAGEMENT ASSOCIATES, LANSING, MICHIGAN
Mr. Smith. Thank you, Madam Chair.
My name is Vernon Smith. I am a former Michigan Medicaid
Director and a Principal of Health Management Associates in
Michigan. I want to make a couple of key points.
First, welfare reform was the most significant challenge
that human services administrators have had to face since the
beginning of Medicaid in 1965. Medicaid eligibility had always
been a derivative of welfare eligibility. That changed. States
had to create new systems for Medicaid eligibility separate
from welfare. That was much more difficult than anyone
imagined.
And as welfare reform was successful, the job of keeping
eligible persons on Medicaid became more difficult. Medicaid
had to overcome the misperceptions that the tough new welfare
reform policies applied to Medicaid also, that Medicaid had
work requirements or that Medicaid had time limits.
A year and a half ago, my colleagues at Health Management
Associates and I conducted focus groups with human service
administrators and Medicaid eligibility specialists around the
country. These experts told us that they were very much aware
of the problems. They had thought through the challenge, and
they were very committed to trying to make things work better.
They detailed to us that they already had under way changes in
policy, simplifications, streamlining of procedures, systems,
forms. They were initiating outreach often for the first time
ever for Medicaid to find and enroll persons eligible for
Medicaid, and they were seeking to change the image of Medicaid
to reduce the stigma that had come from Medicaid's association
with welfare over the years.
They wanted to give Medicaid a chance to support their
efforts to get people to go to work and keep a job. These
changes all take time and have taken a good deal of time.
Our most recent study published last month shows that these
efforts are beginning to make a difference. We looked at
Medicaid enrollment in 21 States over the 2 years from June
1997 to June 1999. In the first year, the year that ended in
June 1998, enrollment declined in 18 of the 21 States we looked
at. These 21 States included the 12 largest States plus 9
others to give some geographic balance. The three States that
really stood out--and if you were to look at figure 4 attached
to the testimony--these three States that really stood out were
Arkansas, Massachusetts and Oklahoma. Each of these States was
well ahead of its peers with major initiatives to expand
eligibility and to streamline their eligibility processes.
In the second year of the study that ended last June,
enrollment decreased in just eight of the 21 States in our
study and increased in 13. Barbara Lyons mentioned that the
study showed increases in 12. After the study was complete, New
Jersey submitted data that showed that they had a small
increase rather than a small decrease. The six States with the
largest annual increases included the three that had increases
in the prior year--that is to say Arkansas, Massachusetts and
Oklahoma--plus the States of Florida, Indiana, and New Mexico.
Again, these three States are among the leaders in adopting
specific and comprehensive initiatives to expand eligibility,
changing their procedures, making them simpler and initiating
comprehensive outreach strategies.
In the process of adjusting to the delinking of Medicaid
from welfare, Medicaid has become a very different program than
it was before. Significantly, over the past 2 years, for the
first time in its history, the data show that Medicaid has
become a program in which over half of its beneficiaries are
not on welfare.
So, to summarize, welfare reform has had a huge impact on
Medicaid. However unintended, it has been very significant.
Second, States are implementing many strategies to address the
challenges and to improve the chances that those who are
eligible for Medicaid will remain enrolled or become enrolled.
Third, the success of these strategies is just becoming
apparent in the program statistics. And, fourth, what is
emerging in some States is a more streamlined mainstream health
coverage program, shedding its image as just the health program
for people who are on welfare.
These results are encouraging, particularly in States that
were early adopters of these strategies, such as the three
States represented on this panel.
Thank you.
[The prepared statement follows:]
Statement of Vernon K. Smith, Ph.D., Principal, Health Management
Associates, Lansing, Michigan
Chairman Johnson and Members of the Committee:
I am Vernon K. Smith. I appear before you today as a
researcher and consultant with Health Management Associates.
Over the past two years I have examined current trends in the
number of persons enrolled in Medicaid and in the State Child
Health Insurance Programs (S-CHIP programs), and the factors
influencing the trends. My perspective is that of an economist
and former Michigan Medicaid director, whose 30-year career as
a public official in Michigan State government focused on
health care and Medicaid. I am pleased to be here today to
discuss with you important issues relating to welfare reform
and its impact on Medicaid, and especially its impact on the
number of children and families for whom Medicaid provides
health coverage.
My remarks are based primarily on research conducted over
the past two years that is described in three published
reports,\1\ as well as ongoing research that will update those
reports.
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\1\ See the following reports supported and published by the Kaiser
Commission on Medicaid and the Uninsured: The Dynamics of Current
Medicaid Enrollment Changes, October 1998 (Publication #2111);
Enrollment Increases in State CHIP Programs: December 1998 to June
1999, July 30, 1999 (Publication #2153); Medicaid Enrollment in 21
States June 1997 to June 1999, April 2000.
---------------------------------------------------------------------------
In enacting the historic welfare reform law four years ago
(Personal Responsibility and Work Opportunity Reconciliation
Act of 1996, P.L. 104-193) Congress specifically tried to
protect eligibility for Medicaid. Medicaid and welfare
eligibility were ``de-linked.'' The expectation was that
eligibility for Medicaid health coverage would continue for
many adults who worked their way off welfare (through the
``Transitional Medical Assistance'' or TMA) and for most of the
children (through poverty level categories of coverage for
children).
However, when the national data for 1996 were released at
the end of 1997, the data showed a drop in the number of
persons enrolled with Medicaid. This was the first drop in
Medicaid enrollment in over a decade. The drop was particularly
surprising in the context of the welfare reform guarantees for
Medicaid eligibility, and even more so in light of the very
large increases in enrollment that immediately preceded it. The
annual rates of increase in Medicaid enrollment were 11.3% from
1990 to 1992, and 5.2% from 1992 to 1995.\2\ Over the seven
years from 1988 to 1995, the number of persons on Medicaid
increased by about 50% from about 28 million to almost 42
million.
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\2\ Brian Bruen and John Holohan, Slow Growth in Medicaid Spending
Continues in 1997, Kaiser Commission on Medicaid and the Uninsured,
November 1998.
---------------------------------------------------------------------------
It is a significant public policy issue as to why Medicaid
enrollment dropped, and whether the sustained drop from 1996 to
1998 reflected a loss of Medicaid coverage for children and
families who in fact were eligible to continue their coverage.
In 1998 HMA conducted focus groups of human service
administrators and Medicaid eligibility specialists to learn
what these experts believed to be occurring and why. The
participants spoke from their personal experience and
observations of what was happening in their states as welfare
reform was being implemented. The descriptions led to the
following conclusions:
Focus Group Conclusions about the Impact of Welfare Reform on Medicaid
1. In perception, Medicaid remained ``linked'' to welfare.
Recipients and applicants believed (incorrectly) that the
new tougher welfare reform policies applied to Medicaid. The
association with welfare led persons to believe Medicaid also
was ``temporary assistance,'' with time limits and work
requirements. The stigma of welfare remained attached to
Medicaid.
2. Work programs kept persons away from both welfare and
Medicaid.
``Work First,'' ``diversion'' and other jobs programs
channeled some welfare applicants away from applying for
Medicaid, even though they may have been eligible for Medicaid.
The focus on jobs, which was a major culture shift for welfare
agencies, spilled over to Medicaid. Medicaid was not the
priority.
3.Complex systems changes were needed to delink Medicaid from
welfare.
When adults ``worked their way off welfare,''
administrative procedures were not in place to continue
Medicaid coverage for eligible adults and children. Recipients
usually did not know to ask about continuing Medicaid.
4. Major changes created confusion.
New welfare rules created confusion for both recipients and
eligibility workers. It took time to implement and understand
new policies that separated Medicaid eligibility from TANF
eligibility. During this transition, a significant number of
working poor families believed they were not eligible for
Medicaid when they actually were eligible.
Human service administrators and Medicaid eligibility
specialists told us that, in mid-1998, they were aware that
their systems were not doing a good job of making sure that
eligible persons were able to maintain Medicaid coverage. They
were quick to describe efforts already underway to fix the
problems and make the systems work better. The focus group
participants described several key strategies, including:
Changing the name of the program to distance it
from the stigma of welfare.
Creating procedures to notify all persons leaving
welfare that they or their children may be eligible to continue
Medicaid coverage, and explaining how to apply.
Developing specific information and outreach
strategies to market the program as health coverage.
Training workers on the new procedures, including
emphasis on how health coverage supports the success of work
programs. Our most recent study suggests that in several states
such changes in policies and procedures are being implemented
successfully. Together with expansions in eligibility levels,
these initiatives are having a significant impact. The result
is that Medicaid enrollment now appears to be increasing in
many states, even as the number of persons on welfare continues
to drop.
Our most recent study is based on analysis of Medicaid
enrollment trends over the two-year period from June 1997 to
June 1999. We looked at data for a total of 21 states,
including the 12 states with the largest Medicaid enrollments.
Medicaid enrollment in these 21 states represented 73% of the
total for the U.S. in 1997.\3\
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\3\ The 21 states included: AR, CA, FL, GA, IL, IN, IA, KS, MA, MI,
NJ, NM, NY, NC, OH, OK, PA, TN, TX, UT, WI.
---------------------------------------------------------------------------
Over the two years for these 21 states, overall Medicaid
enrollment combined dropped from 23.2 million in June 1997 to
22.9 million in June 1999, a decrease of 1.3%. In the first of
these two years, enrollment dropped by 2.7%.
There are wide variations in specific state experiences
over this two-year period. It is hard to draw a direct link,
but the evidence seems to suggest that states with a priority
on outreach, information, streamlining, training and
eligibility expansions have been more successful in enrolling
eligible children and families in Medicaid.
Key findings from this study include the following:
1. Enrollment Changes over the Year from June 1997 to June 1999
Medicaid enrollment dropped in 18 of the 21 states in this
study, over the one-year period ending in June 1998. Only three
of these 21 states had Medicaid enrollment increases over this
year. These three states were Arkansas, Massachusetts and
Oklahoma. These three states were among the first to initiate
policies to find and enroll persons who were eligible but not
enrolled in Medicaid, and to implement eligibility expansions
designed to cover low income uninsured children and families.
Arkansas: Medicaid enrollment increased by 19% in the year
ending June 1998 (and by 29% over the two study years).
Arkansas implemented its ARKids First program to cover children
to 200% of the poverty level, and also added coverage under a
family planning waiver for women who had Medicaid coverage
based on their pregnancy.
Massachusetts: Medicaid enrollment increased by 23% in the
year ending June 1998 (and by 32% over the two study years). A
significant part of the increase was in families, children and
pregnant women. These groups increased by 33% in the 1997-98
period and by 48% over the two year 1997-99 period.
Massachusetts expanded eligibility for working adults and
children under a Section 1115 waiver under its MassHealth
program.
Oklahoma: Medicaid enrollment increased by 10% in the year
ending June 1998 (and by 26% over the two study years). The
increase was primarily in families, children and pregnant women
categories, which increased 16% in the 1997-98 period and by
41% over the two-year 1997-99 period. Oklahoma expanded
eligibility for families and children and implemented a major
outreach initiative to find and enroll eligible children.
2. Enrollment Changes in the Year from June 1998 to June 1999
Over the 21 study states, Medicaid enrollment increased
from 22.6 million to 22.9 million, an increase of 1.4%, in the
year ending in June 1999. Among the 21 study states over the
year ending in June 1999, enrollment increased in 13 states,
and continued to decrease in only eight states.\4\
---------------------------------------------------------------------------
\4\ Enrollment decreased in these eight states: IA, MI, NY, OH, PA,
TX, UT, WI. Enrollment increased in these 13 states: AR, CA, FL, GA,
IL, IN, KS, MA, NJ, NM, NC, OK, TN. Note that the report shows NJ as a
state with a decrease in enrollment. Updated data provided by NJ after
the report was prepared shows enrollment increased in NJ in the period
from June 1998 to June 1999.
---------------------------------------------------------------------------
Over the year ending in June 1999, significant enrollment
increases occurred in states that implemented significant
initiatives to improve coverage, streamline systems and find
eligible adults and children. In addition to Arkansas,
Massachusetts and Oklahoma, states with significant annual
enrollment increases in the year ending June 1999 included the
following:
Florida: Medicaid enrollment increased by 7%. The number of
families, children and pregnant women on Medicaid increased by
11%. Florida streamlined and simplified its application
process, and increased its focus on Transitional Medical
Assistance for those leaving TANF.
Indiana: Medicaid enrollment increased by 23%, including an
increase in families, children and pregnant women categories of
32%. Indiana implemented a comprehensive plan that included a
new name for Medicaid (Hoosier Healthwise), expanded
eligibility for families, streamlined enrollment, a major
training and outreach campaign and hundreds of new sites for
application for coverage.
New Mexico: Medicaid enrollment increased by 13%, including
a 31% increase in the number in the category for children and
pregnant women. New Mexico initiated a major comprehensive
outreach campaign for ``New MexiKids,'' the state CHIP program,
with streamlined procedures for Medicaid and CHIP enrollment.
3. The Impact of Medicaid CHIP Expansions on Overall Medicaid
Enrollment
A key question is the extent to which children who leave
welfare are then enrolled in State CHIP programs. To the extent
children are in Medicaid-expansion CHIP programs (who are also
in Medicaid enrollment counts) then State CHIP programs account
for part of the increase in Medicaid enrollment in the year
ending June 1999. To assess the extent to which Medicaid
expansion State CHIP program enrollment contributed to the
increase in overall Medicaid enrollment, data for State CHIP
programs were obtained for the six month period from December
1998 to June 1999, and compared to Medicaid enrollment over the
same six-month period. Of the 21 states in this study, 15
states had Medicaid expansion CHIP programs. Increases in
enrollment in these Medicaid expansion State CHIP programs
directly accounted for 28% of the increase in Medicaid overall
enrollment in the 21 study states over this six-month period.
Anecdotal information from state CHIP programs indicates
that State CHIP programs also have an indirect impact on
Medicaid, in that a significant percentage of persons who apply
for State CHIP programs are found eligible for Medicaid. To the
extent that application procedures are coordinated and
streamlined by states, such applicants may be easily enrolled
in Medicaid.
Conclusion
Welfare reform created significant problems of coordination
between the eligibility systems for welfare and Medicaid. Human
service administrators and eligibility specialists have been
aware of these problems, and in many states initiated major
efforts to address them.
These efforts have been aimed at improving the image of
Medicaid, streamlining application and enrollment procedures,
expanding eligibility levels to extend coverage to children and
families and targeting outreach toward persons eligible but not
enrolled in Medicaid.
The states that have placed a priority on such efforts have
been successful in enrolling eligible children and families in
Medicaid. The result in 1999 was a reversal of the three-year
decline in Medicaid enrollment in many states.
The major policy, program and system changes that reformed
welfare fundamentally changed the relationship between welfare
and Medicaid. The success of ``delinking'' welfare and Medicaid
is being seen now in states that have stand-alone, streamlined
and mainstreamed Medicaid-based health coverage programs. These
Medicaid programs are less burdened by the stigma still
attached to welfare-based programs, while providing ``health
insurance'' coverage that supports the success of jobs-focused
programs of temporary assistance for needy families.
The good news is that many states have taken action and as
a result children and families who are eligible for Medicaid
for their health coverage are now more likely to be enrolled.
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Chairman Johnson. Mr. Winstead.
STATEMENT OF DON WINSTEAD, WELFARE REFORM ADMINISTRATOR,
FLORIDA DEPARTMENT OF CHILDREN AND FAMILIES
Mr. Winstead. Thank you, Madam Chair and Members of the
Subcommittee. I appreciate the opportunity to provide you with
information about Florida's welfare reform activities and
issues related to health coverage for families leaving welfare.
My name is Don Winstead, and I am the Welfare Reform
Administrator with the Florida Department of Children and
Families.
I would like to summarize the key points in my written
testimony and expand on information that was presented at your
field hearing on welfare reform in January in Riviera Beach,
Florida.
First of all, I would like to mention some brief background
information about our program in Florida to set the context for
what we are finding with Medicaid coverage for children.
Second, I would like to share with you information about what
we are seeing in enrollment trends. Third, I would like to give
you some information about some specific strategies we are
using to try to increase enrollment; and, finally, share some
recent actions that were adopted in the Florida legislature in
the 2000 session that just completed on May 5.
If I can refer to the chart--and I believe there are copies
of these charts in your folders--first of all, if we look
overall at the decrease, if you look at the eight States in the
country that collectively comprise about 60 percent of the
Nation's caseload, Florida has had the largest caseload
decrease. Our decrease has been 68 percent through the latest
period reported, June, 1999; and I have attached material to my
written testimony that shows that decrease has continued. When
we focus on the families that are subject to the time limits
and work requirements, the decrease is even greater.
Another indication of the transformation that we have seen
in Florida is how we are using money, and I will just mention
very briefly--it is a little hard to see on here, but you see
this line here, in Federal fiscal year 1994, we were spending
about 80 percent of our total expenditures in this area on
welfare payments. Now that has dropped dramatically, and the
thing that we are spending the bulk of our money on are things
that support work--child care, case management, support
services. We are investing in supporting work rather than
merely paying for welfare payments, which is a significant
transformation for our State.
I would like to focus on what we have seen in terms of the
trends for children in our State, and this chart shows two
trend lines. One is children receiving cash assistance, and
that is this line. As you can see from when we implemented our
welfare reform program, the number of children receiving cash
assistance has declined from 376,000 down to 124,000, a
significant decrease that mirrors the overall decrease that we
have seen.
On Medicaid we did see a decrease from 1996 to 1998. It
then bottomed out, and we have seen an increase since then so
that today there are more children in Florida eligible for
Medicaid than when we implemented our welfare reform program in
the fall of 1996, in spite of the fact that we have led the
country among large States in cash assistance caseload
decrease.
I have also included some information about adults, and the
adult story is a bit more complex because of all of the
different coverage groups. But we are seeing with adults, as
the cash assistance adults have declined dramatically, we have
seen some decline in our transitional benefit and TANF-related
enrollment of adults. But that decline has slowed, and I think
it indicates to us that we are doing a more effective job of
sharing information about transitional benefits although the
pathways, if you will, for adults, there are fewer in our
program than there are for children.
I would like to mention now two specific strategies that we
have used relative to enrolling children. First is to try to do
a better job of sharing information about transitional
benefits. I believe in your folder is a copy of a brochure--and
we actually use two brochures. One is called, Leaving Welfare
for Work Isn't as Scary as It Seems. In that, prominent in what
we try to share with people, is information about health
coverage and the importance of that. We also share information
about food stamps and the earned income tax credit, about other
benefits for families that don't require you to be on welfare.
Because we clearly want to underscore that you don't have to be
on welfare in order to receive other benefits.
We have another version of the brochure that is designed
for low-income families who are not recipients entitled, Have
You Heard About Benefits for Working Families, again to make
that same point.
The other strategy that I think has been an important part
of what we have done is the simplified eligibility for
children's health. This covers our Medicaid Program and our
SCHIP. You can see it is a one-page, front-and-back form.
And it is significant that it comes with an envelope, and
the significance of that is that you do not have to come to our
office in order to become eligible or have eligibility for your
children determined. You mail it in. There is a brochure that
you can keep that explains the program. This is mailed in, and
the entire process is done through the mail so that the person
doesn't have to enter the office. This gives the family the
choice. They can come to the office and be served at an
outposted location or handle the transaction through the mail
to get health coverage for children.
My final two points in terms of additional strategies,
number one, the legislature just authorized, effective July 1,
presumptive eligibility for children, so we will be
implementing that Federal option. Second, we expanded
eligibility for infants from 185 percent of the Federal poverty
level to 200 percent of poverty in our Medicaid Program. So we
believe that will also give us an additional tool.
I will be glad to answer any questions at the appropriate
time.
[The prepared statement follows:]
Statement of Don Winstead, Welfare Reform Administrator, Florida
Department of Children and Families
Madam Chairman and Members of the subcommittee, I
appreciate the opportunity to provide you with information
about Florida's welfare reform activities and issues related to
health coverage for families leaving welfare. My name is Don
Winstead and I am the Welfare Reform Administrator with the
Florida Department of Children and Families.
In my testimony this morning, I would like to expand on
information I presented at your field hearing on welfare reform
on January 24, 2000 in Riviera Beach, Florida. In that
testimony, I provided information regarding trends in the
number of children receiving cash assistance in Florida
compared with the number of children eligible for Medicaid.
Today, I will provide some additional detail on those trends. I
will also summarize some of the strategies that we think have
been important in increasing Medicaid enrollment of children
and provide information about further efforts we are planning,
based on state law changes in the recently completed session of
the Florida Legislature.
I would like to begin with some background on Florida's
welfare reform implementation to put my comments on health
coverage within the broader context of our program.
Background:
Florida implemented the Temporary Assistance for Needy
Families Block Grant Program (TANF) in October 1996. Our
program is called Work and Gain Economic-Self Sufficiency or
``WAGES.'' Like many states, we have seen a significant decline
in our cash assistance caseload. If you look at the eight
largest states that collectively comprise about 60 percent of
the nation's caseload, Florida's caseload decline has been the
highest among these large states. From the latest information
posted on the Administration for Children and Families web
site, our decline from August 1996 through December 1999 was
68%. This decline includes both families who are subject to
time limits and the work requirement and also the children in
so-called ``child-only'' families, who are not subject to time
limits.
When we take the ``child-only'' cases out of the
calculation and focus on the families with an adult subject to
the work activity requirements and the time limit, our overall
caseload decline through March 2000 has been 79%. I have
attached a caseload summary sheet showing some of the relevant
data.
As our cash assistance caseload has continued to decline,
we have experienced a significant shift in the emphasis of our
program. Increasingly, we have focused more on the importance
of transitional benefits and supports to families who have
moved from welfare to work. To illustrate the scope of this
change, I will refer to an attached chart showing a comparison
between our FFY 1994 expenditures on the AFDC/ JOBS program and
the budget for the comparable programs in the current state
fiscal year. As you can see, in FFY 1994, about 80 percent of
the federal and state funds we spent were on welfare payments.
Today, welfare payments represent a much smaller proportion of
our program budget and much more of our budget goes to
activities that support work, such as child care and work
activity supports. I should emphasize that the child care funds
shown do not include the child care and development fund. I
only included child care funds transferred from TANF or paid
directly out of TANF.
As this background information suggests, our program has
undergone a significant transformation since you passed the
Personal Responsibility and Work Opportunity Reconciliation Act
in 1996. As we focus on helping families move successfully from
welfare to work, an important part of this transition relates
to health coverage, particularly Medicaid.
Medicaid Coverage for Children
There have been a number of national reports and news
stories indicating that the decline in welfare caseloads has
been accompanied by a decline in Medicaid enrollment of
children. This has been an issue of concern in our state and
there are a couple of points that I think are important to
understand. Many of the national articles I have seen rely on
data through 1997 or 1998. In Florida, we saw a decline in
Medicaid enrollment after we implemented welfare reform,
although the decline was not as great as the decline in cash
assistance. However, since 1998 we have seen a change in this
trend. Attached is a chart comparing trends in children
receiving cash assistance with trends in children eligible for
Medicaid. As you can see, the decline in Medicaid is less than
the decline in cash assistance, but the number of eligible
children did decline from 1996 to 1998. Since 1998, the decline
in cash assistance has continued, but the the trend has been
reversed in Medicaid and the number of children eligible for
Medicaid has increased.
As a technical note, in April 1999 we had a change in the
age categories within which the Medicaid agency in Florida
reports their enrollment data. The caseload data prior to April
1999 reflects children 0 to 17 while the reports since April
1999 aggregate children age 0 to 18. I've estimated the number
of 18 year-olds in months from April 1999 forward to show the
most comparable data. Either way, the number has been
increasing in Medicaid.
In Florida, there are more children eligible for Medicaid
today than when we implemented welfare reform.
I have also attached information related to Medicaid
enrollment of adults. Because adult enrollment includes a much
broader group of people than our welfare reform program, I have
also shown the number of adults receiving cash assistance
compared with two categories of adults eligible for Medicaid.
One category shows adults enrolled in AFDC/TANF and unemployed-
parent Medicaid coverage groups and the other shows total
Medicaid enrollment of non-elderly adults. We believe the
decline in the TANF coverage group by only 4% in the past year
while adults on cash assistance have declined 28% in the same
time period, indicates that we are making significant progress
in the area of transitional Medicaid.
Strategies for Medicaid Enrollment
I would like to highlight two specific strategies related
to providing Medicaid coverage for eligible children and
families.
One critical issue for families leaving welfare is to make
sure they are informed about their potential eligibility for
transitional benefits. This issue is not new with passage of
the TANF legislation. Florida began expansion of Medicaid
eligibility to non-welfare recipients in the mid 1980's and
there has been substantial further expansion of coverage groups
through both state and federal legislation since then.
Transitional Medicaid and transitional child care were first
authorized under the Family Support Act of 1988.
In spite of these expansions, the task of educating people
that Medicaid eligibility is not tied to cash assistance is an
ongoing challenge. We have worked with the Southern Institute
on Children and Families to develop brochures make information
on transitional benefits more accessible to families. Several
other states, particularly North Carolina and Georgia were
instrumental in the development of this material and we learned
from their experience in adapting the content to Florida.
We continue to work to refine our notices and other
marketing material to better inform families about benefits.
A second effort that has been critical to our enrollment of
children in Medicaid has been the development of a simplified
application process for our State Children's Health Insurance
Program, Florida Kidcare.
Our simplified application form is used for enrolling
children in Medicaid and for those who are not Medicaid
eligible, the same form is used to enroll children under our
Title XXI program. You will note that the application is one
page and comes with an envelope. The envelope is important to
our strategy to increase access to health coverage. Through the
simplified application, families in Florida can apply for and
have their children approved for Medicaid or other Kidcare
coverage groups without the need to ever visit our eligibility
office. The entire process can be done through the mail. If a
family wants to come to one of our service centers and apply
for Medicaid either by itself or in conjunction with an
application for cash assistance or Food Stamps, they can do so.
The choice of how to apply is up to the family.
The simplified application forms are widely available
through child care centers, schools, community based
organizations, county health clinics, hospitals, etc. The form
is also available through the internet at floridakidcare.org.
Every mail-in application is screened for potential
Medicaid eligibility. We believe this process has been an
important part of increasing Medicaid enrollment for children
and also in encouraging people to think of Medicaid as health
insurance coverage rather than welfare.
Future Initiatives
Prior to concluding, I would like to mention several
additional strategies for increasing health coverage for
children as a result of recent legislation. The 2000 session of
the Florida Legislature ended on May 5, 2000. They passed new
Kidcare legislation and provided significant new state funding
for expansion of health coverage for uninsured children.
Medicaid eligibility for infants was expanded from 185% of the
federal poverty level to 200% of the poverty level. The
legislature also authorized the implementation of presumptive
eligibility for children under the state option that was part
of the Balanced Budget Act. We believe presumptive eligibility
for children will provide us with an important tool to further
expand access to health coverage.
In addition, major legislation was enacted to take the next
step in welfare reform by merging the governance and operation
of our workforce system and our TANF-funded work activities. A
new public-private entity, Workforce Florida, Inc. will have
jurisdiction over the Workforce Investment Act Programs, the
Welfare to Work grant, TANF-related work activities and a
number of other federal and state training and economic
development programs. We believe this evolution in our
implementation of workforce programs will enhance our ability
to provide support for the remaining families who are receiving
cash assistance and provide support for low income working
families who have already left welfare or who have not received
welfare in the past.
We believe that efforts to strengthen working families and
reduce the likelihood that they will need welfare in the future
is one of the keys to further success in implementing welfare
reform. I would be glad to answer any questions you might have.
[Attachment are being retained in the Committee files.]
Chairman Johnson. Ms. Gifford.
STATEMENT OF KATHLEEN GIFFORD, ASSISTANT SECRETARY, OFFICE OF
MEDICAID POLICY AND PLANNING, INDIANA FAMILY AND SOCIAL
SERVICES ADMINISTRATION
Ms. Gifford. Thank you, Madam Chair and Members of the
Committee, for inviting me here to share Indiana's experience.
Indiana has achieved success in both welfare reform and
access to health care. Since welfare reform began in Indiana,
TANF caseloads have declined by almost 60 percent. In 1999,
Indiana was cited first in the Nation in TANF job placements,
but as we implemented welfare reform we saw declines in
enrollments of families in Medicaid. We have dramatically
reversed that downward trend.
As part of our effort to implement CHIP, Indiana launched a
comprehensive outreach campaign. Enrollment of children in
Hoosier Healthwise, which is Indiana's Medicaid and CHIP
program for low-income families and children, has increased by
almost 60 percent since the outreach campaign began in July,
1998, from 210,000 children to over 330,000 children. Over
100,000 of those children who were newly enrolled were without
health insurance prior to joining Hoosier Healthwise, more than
our original target of 91,000 derived from census data.
Enrollments within the low-income families category of Medicaid
also increased by over 40 percent during this same time period,
with the rate of increase for parents actually exceeding the
rate of increase for children in that category.
At the Indiana Family and Social Services Administration we
attribute these enrollment successes primarily to three things:
the commitment of our Governor Frank O'Bannon; second, to the
teamwork within our very large agency; and, third, because we
established strong and clear policies at the central office
level that were then implemented locally through locally
determined plans.
One key to a successful outreach effort is to make it a
priority at the very highest level. Governor O'Bannon charged
our agency with the responsibility of finding and enrolling
every eligible child into Hoosier Healthwise. Even after we
began to see Medicaid budget concerns on the horizon last
December, due in part to the unexpected strong enrollments, the
Governor stated that we should shout from the rooftops and that
the strong enrollments were good news despite the budget
implications. Governor O'Bannon continues to promote the
enrollment of all eligible children in Hoosier Healthwise.
Clear policies were established at the central office level
to destigmatize the Medicaid Program and simplify the
enrollment process. We changed our marketing techniques to
reposition Hoosier Healthwise as a health care program rather
than a welfare program. We developed a snazzier card. We
advertised. We simplified the enrollment form. We eliminated
unnecessary verification requirements, and we established a
mail-in application unit.
Also, although Indiana's CHIP program combines a Medicaid
expansion with a State-designed non-Medicaid Program, both
parts are fully coordinated and virtually seamless to the
consumer. Both are marketed as Hoosier Healthwise. Medicaid
eligible children are enrolled in package A, and CHIP non-
Medicaid eligible members are enrolled in package C. We believe
that this design has greatly assisted us in our efforts to
destigmatize Medicaid and simplify the enrollment process.
Our local implementation strategies included establishing
over 500 community enrollment centers. Our county directors
also collaborated with local partners to develop outreach plans
specifically tailored to their communities.
Other significant community partners that collaborated with
us at both the State and local levels included the Wishard
Hispanic Health Project, the Indiana Minority Health Coalition
and the Indiana Primary Health Care Association.
Finally, I would like to take this opportunity to bring an
important Indiana concern to your attention. Indiana is one of
only a few States that is likely to expend its entire 1998 CHIP
allocation before it expires. Despite our enrollment successes
and the fact that the census data obviously underestimated the
number of uninsured children, we have now learned that our 2000
CHIP allocation will decline by 10 percent. We were also
disturbed to hear that the Senate appropriations Committee
voted last week to redirect almost $2 billion of unspent CHIP
allocations for other purposes.
In light of the decrease in our 2000 CHIP allotment we are
very hopeful that any unspent CHIP allocations can be used as
they were originally intended, for reallocations to States like
Indiana. We have enrolled many more children than we originally
projected based on the census data. A decrease in funding at
this time could be detrimental to our efforts.
That concludes my testimony. Thank you.
Chairman Johnson. Thank you very much.
[The prepared statement follows:]
Statement of Kathleen Gifford, Assistant Secretary, Office of Medicaid
Policy and Planning, Indiana Family and Social Services Administration
Madame Chairman and Members of the Subcommittee:
Thank you for inviting me to speak to you today about the
importance of health insurance in the post-welfare reform
environment. The coordinated efforts of Congress, the Executive
Branch and the states have brought critical attention and
resources to the issue of ensuring the good health of our
children and your efforts are greatly appreciated.
Indiana has achieved strong early successes in both welfare
reform and access to health care. Former Governor and current
Senator Evan Bayh initiated Indiana's welfare reforms during
the summer of 1995 with a series of Aid to Families with
Dependent Children (AFDC) waivers very similar to the federal
legislation that followed in 1996. Governor Frank O'Bannon has
continued this welfare reform effort and has seen the State of
Indiana cited as first in the nation in Temporary Assistance
for Needy Families (TANF) job placements and sixth in success
in the workforce, the highest overall rating of any state.
Indiana's success in welfare reform also has led to significant
caseload declines, almost 60% since 1994. However, these
caseload declines were accompanied by smaller declines in
enrollment of families in Medicaid and Food Stamps. At
O'Bannon's direction, the State of Indiana has dramatically
reversed the downward trend in Medicaid enrollment and has
begun an effort to increase access and education regarding Food
Stamps. In fact, Indiana was recently highlighted in a report
of Medicaid Enrollment in 21 States, released by the Kaiser
Commission on Medicaid and the Uninsured, as the state with the
highest enrollment increases since 1998.\1\ These enrollment
increases were a result of the Governor's commitment to
families and children; teamwork within the Indiana Family and
Social Services Administration at the state and local levels; a
strong central policy with local implementation; and Indiana's
commitment to family-friendly services, prevention and, if
necessary, early intervention.
---------------------------------------------------------------------------
\1\ Medicaid Enrollment in 21 States, The Kaiser Commission on
Medicaid and the Uninsured, April 2000.
---------------------------------------------------------------------------
Medicaid Outreach in IndianaS6602
In the post welfare reform era, it became apparent that to
encourage Medicaid enrollment the perception of the program would have
to change from welfare to health care. Accessibility of enrollment
sites and complexity of application procedures were also a concern. For
these reasons, Indiana felt it was vitally important to develop and
implement outreach as a key focal point in increasing Medicaid
enrollments.
Governor Frank O'Bannon and the state legislature first expanded
Medicaid eligibility to Indiana children in the summer of 1997. Later
that year, Congress passed the Balanced Budget Act of 1997 and brought
the nation's attention to the troubling issue of uninsured children
among the poor and working poor in the U.S. In July of 1998, Indiana
expanded Medicaid eligibility for a second time and was able to use the
Children's Health Insurance Program (CHIP) funding for both expansions
of eligibility. At the same time, O'Bannon issued a statewide directive
that 91,000 uninsured children would be targeted in an aggressive
outreach campaign over the next 18 months. The campaign encompassed
three major components: de-stigmatize Medicaid and CHIP services; reach
out to local communities to find all uninsured children who are
eligible for Medicaid and CHIP; and simplify enrollment processes.
De-stigmatization of Medicaid
The de-stigmatization of Medicaid and CHIP was a priority for the
State. Medicaid was to be converted from a ``welfare program'' to a
program of health care coverage for persons in need of help in
obtaining such coverage. In short, Medicaid was made to look as much
like private coverage as possible. Several strategies addressed this
priority:
Medicaid and CHIP became known to the public as ``Hoosier
Healthwise,'' the name formerly used only for the Medicaid managed care
program;
Hoosier Healthwise was advertised with a friendly mascot,
Dr. Whoosier, an owl that would appear in parades, on frisbees and
sipper cups and in public appearances with Governor O'Bannon; and
The customer's Medicaid card became a Hoosier Health Card,
similar to that used by health plans across the state.
[GRAPHIC] [TIFF OMITTED] T8979.022
Outreach at the Local Level
Another vital element of increased enrollment is outreach into
local communities. A key element to this outreach was extending
outreach beyond state facilities and staff. Prior to 1998, a family had
to visit a Local Office of Family and Children to apply for Hoosier
Healthwise. An active effort was initiated to identify and recruit
alternative locations for enrollment. Soon after the outreach campaign
began, this effort had resulted in over 500 community enrollment
centers that volunteered to accept Hoosier Healthwise applications
across the state, including hospitals, health clinics, child care
centers and social service providers. At the same time, new mail-in
applications were available to families through a widely advertised
toll-free number.
The Hoosier Healthwise enrollment process was significantly
simplified to assist families, further de-stigmatize services, and
encourage participation of local enrollment sites. A fairly complex
automated eligibility process conducted in a Local Office of Family and
Children became a single, double-sided sheet for children and pregnant
women that could be completed in an enrollment center or mailed into
the DFC. Income verifications were simplified and self-declaration was
used more frequently. Although enrollment has been simplified and
enrollment centers are handling part of the application process, the
integrity of eligibility determination has been important to the State.
The DFC received HCFA approval to evaluate the quality of the
enrollment center application process to further improvement in this
area.
The outreach effort also included specific strategies to increase
enrollment among ethnic minorities. The DFC contracted with three
statewide organizations--the Wishard Hispanic Health Project, Indiana
Black Expo and Indiana Minority Health Coalition. Posters, brochures
and applications were translated into Spanish to address the needs of
the largest non-English speaking population in the state. Additionally,
the Indiana Primary Healthcare Association participated in monthly
meetings with the other statewide organizations to ensure services in
the community were coordinated among all the partners. Outreach funds
were provided directly to the 92 counties' Local Offices of Family and
Children to implement the Governor's enrollment directive in a way that
addressed the unique needs and interests of each local community.
Communities used remarkable creativity in spreading the word about
Hoosier Healthwise enrollment: appearing in parades, visiting local
schools and health providers, and sponsoring special events. This local
direction and coordination was vital to the State's success.
[GRAPHIC] [TIFF OMITTED] T8979.023
Results
The outreach campaign was, and continues to be, extremely
successful. Indiana's enrollment of children in Hoosier Healthwise has
increased by almost 60% since the outreach began in July of 1998, from
210,000 to over 330,000. Over 100,000 additional children without
insurance were enrolled in Hoosier Healthwise, which eclipsed Governor
O'Bannon's target of 91,000.
Data Concerns I would like to express Indiana's concerns with the
data and methodologies used to measure the uninsured population and
allocate federal resources to serve the uninsured. The increase in
enrollment of over 100,000 uninsured children during the first eighteen
months exceeded Governor O'Bannon's original expectations. This was due
in part to the lack of precision of the Current Population Survey (CPS)
data that provide the only state-level estimates of uninsured children
by poverty level. The CPS data indicated a 35% drop in the number of
children under 200% of poverty between the 1995 and 1998 three-year
averages for the State of Indiana. This trend seems too extreme to
reflect reality in any meaningful way, especially when compared to
other economic indicators.
The Census Bureau's most recent estimate of uninsured children
under 200% of poverty for Indiana is 123,000. However, the Census
Bureau's large margin of error acknowledges the fact that their point
estimates are questionable. Congress has appropriated more funds to
enlarge the survey. Still, these point estimates currently are being
used to determine the CHIP allotments for states. These seemingly
inaccurate estimates compounded with the precipitous decline in the
number of children under 200% of poverty in Indiana's CPS data have
resulted in a projected 10% decrease in CHIP funding for the State in
2000. Since Indiana is enrolling many more children than the CPS data
projected, a decrease in funding at this time could be quite
detrimental to efforts to improve working families access to health
care. Because of the current inaccuracy of the CPS data at the state
level, we have commissioned a survey of 10,000 families in Indiana to
generate our estimates. Preliminary results from the survey will be
available in June 2000. We would appreciate any flexibility Congress
could build into the allocation formula to adjust for situations such
as these.
In addition, Indiana is one of only 13 states that have or are
expected to have expended its 1998 CHIP allotment. There is debate
regarding the prospect of re-allocating the unused funds. States with
successful enrollment initiatives should not be penalized by delaying
re-allocations until other states exhaust their allotments. The funds
should be used by the states that are providing health coverage to
children now to promote further expansions in enrollment across the
country. The combined effect of inaccurate CPS figures and declining
funds at just the time Indiana needs them would be hugely detrimental
to Hoosier Healthwise.
Enrollment of Low-Income Families
Between 1995 and 1998, Indiana observed declines in low-income
families' enrollment in Medicaid, as did the nation. The steps we have
taken to de-stigmatize the program, reach out to local communities and
simplify enrollment also have had a dramatic effect on the enrollment
of low-income families. In fact, the Low-Income Families (1931)
category of Medicaid has increased by over 40% since May of 1998, when
outreach began. And the rate of increase for parents actually exceeded
the rate of increase for children in that category. Enrollment in
Transitional Medicaid has quadrupled since the outreach began. It is
apparent that fewer families were being served by Medicaid before 1998,
perhaps due to complexity or stigma; however, family coverage has
increased dramatically since steps to de-stigmatize the program and
reach out to communities were taken. Most observers in Indiana feel
that these de-stigmatization and outreach efforts were effective with
parents who voluntarily withdrew from Medicaid when they left TANF,
possibly because it was seen as another type of ``welfare.''
[GRAPHIC] [TIFF OMITTED] T8979.024
In 1998, the State also made many administrative changes to support
the de-linking of Medicaid eligibility from TANF. Changes were made to
the automated system to ensure that no family closed a Medicaid case
without being informed that they remained eligible. Extensive training
was conducted with local staff to ensure that families were told about
the availability and importance of Transitional Medicaid Assistance and
Hoosier Healthwise for Children. These efforts complemented the general
outreach efforts that impacted children and families across the state.
Indiana shares the concern of the Health Care Financing Authority
(HCFA) that families who are eligible for coverage must continue to
receive it. And the State looks forward to receiving the results of the
technical assistance visits conducted by HCFA last fall. However, the
guidance that was issued in April does not take into account any
specific state's circumstances or progress since the de-linking of
Medicaid and TANF. States have not yet been informed of specific
deficiencies found in the site visits. FSSA supports corrective action
where necessary to remedy any inappropriate loss of Medicaid coverage;
however, we believer that a ``one-size-fits-all'' reinstatement
approach could cause confusion and extreme administrative burdens.
Current Initiatives and Next Steps
As an increasing number of families enter the workplace,
the role of supportive services including access to quality
health care has become even more crucial. In addition to health
care, Indiana has focused on a variety of supportive services
for working families. As stated earlier, Indiana is committed
to increasing the level of access and education regarding the
availability of Food Stamps to low-income families; however,
simplifying enrollment processes for Food Stamps may be more
challenging due to the strong focus on eliminating any
potential eligibility and payment errors.
Much of the innovation in supportive services for families
is made possible by the flexibility of TANF block grant funds
that support many services for working families up to 250% of
poverty. Funds available for child care vouchers have increased
from $17 million in 1992 to over $200 million in 2000. Governor
O'Bannon's commitment to early childhood has allowed for
increased funding for early intervention and prevention
services for children at risk of developmental disabilities,
abuse or neglect. Indiana has focused on the importance of non-
custodial parents in children's lives with increased child
support collections and Access and Visitation services that
promote the emotional bond between non-custodial parents and
their children. Also, through the Fathers and Families
Initiative, Indiana continues to encourage and support locally
driven fatherhood programs throughout the state through the
provision of grants and technical assistance.
Indiana is committed to vigorous evaluation of welfare
reform's effects on families and children. As part of the State
Level Project on Child Outcomes funded by HHS in five states,
Indiana is currently surveying Indiana's children in families
affected by welfare reform to determine its effects. Past
findings of Indiana's experimental welfare reform evaluation
found that former clients were working at much higher levels;
however, they were having trouble retaining employment and
increasing the family's net income. As a result, the State
implemented an Earned Income Credit for low-income working
families, enhanced job retention services, and soon will
implement an income disregard for TANF families in poverty.
The vast majority of these family services have been
expanded through the use of TANF federal and Maintenance of
Effort funds and have allowed the State of Indiana to provide a
comprehensive set of supports for working families seeking
economic self-sufficiency. As one of seven states selected by
the National Governors' Association for their State Policy
Academy, ``Expanding Opportunities for Low-Income Families to
Advance in the New Economy,'' Indiana is committed to a
comprehensive approach to enhance the lives of Hoosier
families. Indiana's success in promoting access to health care
will be used as a model for improving access to all of the
critical supports available to working families.
Indiana is investigating options for the possible expansion
health coverage to the parents of children eligible for Hoosier
Healthwise. A committee of stakeholders (businesses, labor and
health care providers) has been appointed to look into a wide
variety of approaches.
We, in Indiana, are proud of our successful efforts to
provide coverage to children and working families. We greatly
appreciate the support provided to us in these efforts by
Congress and the Department of Health and Human Services and
look forward to working with you to assure the best in health
care for every American. Thank you again for this opportunity
to speak with you today.
Chairman Johnson. Dr. Mitchell.
STATEMENT OF LYNN MITCHELL, M.D., M.P.H., MEDICAID DIRECTOR,
OKLAHOMA HEALTH CARE AUTHORITY
Dr. Mitchell. It is my privilege to be here today. My name
is Lynn Mitchell. I am the Medicaid Director of the Oklahoma
Health Care Authority, the designated State Medicaid agency in
Oklahoma. My testimony today reflects Oklahoma's experience and
views.
The Oklahoma Medicaid Program serves over 400,000
recipients, approximately 12 percent of the State's population,
including 260,000 children and 150,000 adults. The current
annual budget is $1.7 billion. Since the Authority's creation
in 1994, we have focused our efforts on achieving efficiencies
through care and benefit management and on improving health
care quality, access to care, and availability and use of
preventive services. By State legislative action effective
December, 1997, Oklahoma extended eligibility to children and
pregnant women with family income up to 185 percent of the
Federal poverty level.
We also initiated an aggressive and highly successful
outreach program. The State was aided financially in its
efforts to extend benefits to uninsured children by your
enactment of Title XXI, the SCHIP program, for which we are
very grateful.
From July, 1997, through March this year, Oklahoma's total
Medicaid enrollment grew from 282,000 to 404,000 individuals, a
43-percent increase. During this same time period as TANF rolls
steadily declined, the Medicaid enrollment for low-income
children grew from 176,000 to 296,000 people, a 68-percent
increase.
I am here to talk briefly about how we increased access and
reduced barriers to quality Medicaid health care for low-income
families, especially those families who are moving forward from
welfare or cash assistance programs.
In addition to expanding the income eligibility standards,
Oklahoma made significant changes in the requirements and in
the manner in which eligibility determinations are made,
changes that are supportive of working families. The agency
reduced the Medicaid eligibility application from 17 pages to 2
pages. The face-to-face interview and the asset test were
eliminated. The automatic case determination at 6 months was
changed to a 6-month redetermination process. Income
declaration was instituted rather than income verification and
documentation. Medicaid applications were made accessible
through Department of Human Services county offices, county
health departments, WIC offices, public libraries, school
systems, day-care facilities and through the mail by calling a
toll-free number.
Perhaps most importantly, the agency had to overcome the
negative stigmatism of Medicaid, welfare, and cash assistance.
The program was designed to emphasize personal responsibility
and destigmatize the negative stereotypes of government
assistance. This resulted in the creation of the managed health
care insurance program called SoonerCare.
An integral part of the agency's success and the aspect of
our program we are very proud is of Oklahoma's outreach
initiative. We recognized the need to develop a comprehensive
outreach campaign to spread the word of available health care
to eligible individuals. The task was enormous, too enormous
for one State agency to undertake alone. Therefore, the
Oklahoma Health Care Authority developed a strong partnership
with other closely related State and Federal agencies.
Our partners included the Oklahoma Department of Human
Services, the Oklahoma State Department of Health, the Oklahoma
Commission on Children and Youth, the Oklahoma State Department
of Agriculture, the Oklahoma State Department of Education, and
the Social Security Administration. The objective was to
effectively communicate the newly expanded health care service
to eligible populations and to reduce the number of uninsured
children in Oklahoma through establishing mechanisms of health
care delivery.
We also focused on enhancing and supporting local and
community-based outreach initiatives. Increased access to
primary health care services that would result in a healthier
Oklahoma population was the common goal.
The Department of Human Services created county-by-county
outreach plans developed by specialized DHS outreach workers.
These approaches included increased office hours, attendance at
special events, public school coordination through the free and
reduced lunch program and day-care coordination. The Oklahoma
State Department of Health reached individuals through the WIC,
Immunization and SoonerStart Early Intervention programs.
Additional outreach partnerships included collaboration
with the Head Start program, the Oklahoma Institute for Child
Advocacy in the implementation of The Oklahoma Covering Kids
Initiative and through the Oklahoma Commission on Children and
Youth in two rural pilot communities to demonstrate grassroots
outreach strategies.
On behalf of the State of Oklahoma, we are very proud of
the efficiency and effectiveness of our Medicaid Program. It is
very humbling that we are becoming recognized as a State that
is moving in a positive direction. We are appreciative of the
Federal support to provide and improve health care coverage to
Oklahoma's working families.
Thank you for your time and this opportunity.
[The prapered statement follows:]
Statement of Lynn Mitchell, M.D., M.P.H., Medicaid Director, Oklahoma
Health Care Authority
Madam Chairman, committee members, it is my privilege to be
here today. My name is Dr. Lynn Mitchell. I am the Medicaid
Director of the Oklahoma Health Care Authority, the designated
state Medicaid agency in Oklahoma. It is my privilege to also
serve on the Executive Committee of the National Association of
State Medicaid Directors. My testimony today reflects Oklahoma
experiences and views. I am proud to say we are among the
leading states setting the standard for state Medicaid programs
that provide health insurance coverage to low-income, working
families.
The Oklahoma Medicaid program serves over 400,000
recipients (approximately 12% of the State's population),
including 260,000 children and 150,000 adults. The current
annual budget is $1.7 billion. Since the Authority's creation
in 1994, we have focused our efforts on achieving efficiencies
through care and benefit management and on improving health
care quality, access to care, and availability and use of
preventive services. By state legislative action effective
December 1997, Oklahoma extended eligibility to children and
pregnant women with family income up to 185% of the Federal
Poverty Level. We also initiated an aggressive and highly
successful outreach program. The State was aided financially in
its efforts to extend benefits to uninsured children by your
enactment of Title XXI, the State Children's Health Insurance
Program, for which we are very grateful.
From July 1997 through March this year, Oklahoma's total
Medicaid enrollment grew from 282,000 to 404,000 individuals, a
43 percent increase. During this same time period as TANF rolls
steadily declined, the Medicaid enrollment for low-income
children grew from 176,000 to 296,000 people, a 68 percent
increase.
I am here to talk briefly about how we increased access and
reduced barriers to quality Medicaid health care for low-income
families especially those families who are moving forward from
welfare or cash assistance programs. In addition to expanding
the income eligibility standards, Oklahoma made significant
changes in the requirements and in the manner in which
eligibility determinations are made that are supportive of
working families. The agency reduced the Medicaid eligibility
application from 17 pages to 2 pages (one-page front and back).
The application process time was reduced from 45 days to 20
days. The face-to-face interview and the asset test were
eliminated. The automatic case termination at six months was
changed to a six-month re-determination process. Income
declaration was instituted rather than income verification and
documentation. Medicaid applications were made accessible
through Department of Human Services (DHS) county offices,
county health departments, WIC offices, public libraries,
school systems, day care facilities and through the mail by
calling a toll-free telephone number.
Perhaps most importantly, the agency had to overcome the
negative stigmatism of Medicaid, welfare and cash assistance
participants and programs. The program was designed to
emphasize personal responsibility and de-stigmatize the
negative stereotypes of government assistance. This resulted in
the creation of the managed health care insurance program
called SoonerCare.
An integral part of the agency's success and the aspect of
our program we are very proud of is Oklahoma's outreach
initiative. To begin, Oklahoma had a large uninsured
population. We recognized the need to develop a comprehensive
outreach campaign to spread the word of available health care
to eligible individuals. The task was enormous, too enormous
for one state agency to undertake alone. Therefore, the
Oklahoma Health Care Authority developed a strong partnership
with other closely related state agencies. Each agency
committed resources and programs to the outreach effort.
Responsibilities were outlined through a series of outreach
task force meetings. Prior experiences with outreach were
shared in order to focus on the most effective communication
mechanisms.
Our state agency partners included the Oklahoma Department
of Human Services, the Oklahoma State Department of Health, the
Oklahoma Commission on Children and Youth, the Oklahoma State
Department of Agriculture and the Oklahoma State Department of
Education. The objective was to effectively communicate the
newly expanded health care service to eligible populations and
to reduce the number of uninsured children in Oklahoma through
established mechanisms of health care delivery. We also focused
on enhancing and supporting local, community based outreach
initiatives. Increased access to primary health care services
that would result in a healthier Oklahoma population was the
common goal.
The Department of Human Services created county-by-county
outreach plans developed by 47 specialized DHS outreach
workers. They included innovative approaches to meet the
community needs. These approaches included increased office
hours, attendance at special events, community development and
awareness including speaking engagements, public school
coordination through the free and reduced lunch program and day
care coordination. The Oklahoma State Department of Health
reached individuals through the WIC, Immunization and
SoonerStart Early Intervention programs. Additional outreach
partnerships included collaboration with the Head Start
program, the Oklahoma Institute for Child Advocacy in the
implementation of ``The Oklahoma Covering Kids Initiative'' and
through the Oklahoma Commission on Children and Youth in two
rural pilot communities to demonstrate ``grassroots'' outreach
strategies.
The Oklahoma Health Care Authority has designed, developed
and produced fact sheets, flyers, posters, postcards, public
service announcements for newspapers, radio and television as
well as advertisements in movie theaters.
In addition, we are designated by HCFA as a Pilot Outreach
Site for its Native American population. We are also
investigating additional outreach mechanisms such as outdoor
and mass transit promotions.
The Oklahoma Health Care Authority is also focused on
considerations for the long-term Medicaid program to ensure
local communities have adequate support and local outreach
initiatives are working in concert with each other. This will
reduce duplication of effort, maximize lessons learned and
develop ongoing dialogue and information sharing. We will
continue to seek ways to track and measure our health care
program's outreach mechanisms and their effectiveness.
On behalf of the State of Oklahoma, we are very proud of
the efficiency and effectiveness of our Medicaid program. In a
recent Kaiser Commission Study on Medicaid and the Uninsured,
Oklahoma was identified as being one of just a few states that
have experienced constant, positive enrollment growth during
the past two years. It is very humbling that we are becoming
nationally recognized as a state that is moving in a positive
direction. We are appreciative of the federal and state support
to provide and improve health coverage to Oklahoma's working
families.
Thank you for this time and opportunity.
Chairman Johnson. I thank the panel very much for your
testimony. Actually, your success is quite spectacular; and the
common elements of focusing on the target population, systemic
outreach efforts, collaborations, local folks involved makes a
lot of sense.
Also, they are not things that the Federal Government can
do. If you don't do it, we cannot do it. I commend you on that.
I am wondering how difficult it has been to create
seamlessness between Medicaid and CHIP and how difficult the
simplification process has been. I appreciate your bringing the
application that Florida uses, Mr. Winstead.
First of all, I am sorry my friend Pete Stark is not here,
because it is quite interesting how simple this application is.
Actually, it is adults, children, name, address and Social
Security number and a little household information on the back.
You really have simplified at a level that we in Congress have
certainly not been able to do.
It is going to be very hard to integrate these programs,
and also the complexity of doing this nationwide is very hard.
If you can talk about what are some of the--what were some of
the things that were easy about the administrative reforms that
other States could do actually quite rapidly and what are the
things that are hard and are there any things that we need to
change the law, recognizing the shoals that plague that
process.
Mr. Winstead. If I may, first of all, I think it was very
difficult in a lot of ways to accomplish some of the things
that we have. But what we have discovered is some of the
programs are Medicaid are mind-numbing in their complexity. Our
attitude is that we need to manage the complexity and not
delegate it to the families that we serve. We are trying to
build processes to try to make some of that complexity
invisible to the families. I think that the application that we
use for Medicaid and our CHIP program was a big step in that
direction.
One of the things that we found and I am sure others have
found is that one of the real barriers is the stigma associated
with Medicaid and the association that has built up over the
years between Medicaid and welfare. That is why we market our
program as Florida Kid Care. And Medicaid for children is just
one of the components of Florida Kid Care, but other marketing
efforts do not use the word Medicaid, and we have tried very
much to create the message that this is not welfare, this is
health coverage and tried to make that distinction.
I think the other thing that I would just like to mention,
because I have not heard any mention of it this morning, which
I think is an important part of the discussion, is the Food
Stamp Program and where that fits in all of this. Many of the
same families that we are trying to reach through our health
coverage efforts also may have coverage for food stamps, and
the fact that many low-income working families don't have to be
eligible for welfare to also receive assistance from the Food
Stamp Program is I think an important part of the mix, but also
part of the complexity and the problem because under Federal
regulations the Food Stamp Program does require office visits,
face-to-face contacts with people. So figuring out ways to make
that benefit accessible so that people don't have to go through
multiple processes is I think an ongoing challenge.
Chairman Johnson. I would certainly hope--particularly
those States that have succeeded in simplifying the health care
application and the operation of that system and better
integrating it, and I think it would be very helpful if you
would get together and make your recommendations as to how we
can simplify and integrate food stamps.
The real issue is the change in guidelines and the
tradeoffs involved, and I think the more that comes from the
people who are on the frontline, the better that Congress can
deal with it. It should not be something that the interest
groups that are in this for different reasons primarily drive.
So I think your recommendations in that area if you work
together would be a very powerful lever to help us get going in
the next session. Everybody knows that needs to be done.
Everyone dreads the cutouts. There is also a lot of recognition
that we must complete this move from a cash benefit to a work
benefit national policy, and that was the goal of food stamps,
and we really have to, in a sense, regularize everything and
integrate everything. I would urge you to move on. You have
done wonderful work in simplifying Medicaid and integrating it
with CHIP. Is it fair to say that all of you have succeeded in
integrating?
Ms. Gifford. I think our program was designed to make it
all part of Hoosier Healthwise so that the families would not
necessarily know which one they were applying for.
Chairman Johnson. Is that true, Dr. Mitchell?
Dr. Mitchell. SoonerCare is a seamless program where CHIP
tied onto our own State eligibility expansion, and they just
happen to coincide at almost the same time.
Chairman Johnson. Would you put on the record the name of
your program and the seamlessness and the income guidelines,
how much you have expanded this, so we have that clear
information.
Ms. Gifford. Hoosier Healthwise, we expanded Medicaid
eligibility up to 150 percent of the Federal poverty level
across the board for all age categories of children using the
CHIP dollars.
Our second expansion, using the CHIP dollars that began a
few months ago, goes to 200 percent of the Federal poverty
level, again an expansion of Hoosier Healthwise but a non-
Medicaid expansion.
Dr. Mitchell. Our program is called SoonerCare, and our
expansion was 285 percent of the Federal poverty level for
children through age 17 and pregnant women.
Chairman Johnson. Dr. Smith?
Mr. Smith. Well, it is my observation, looking around the
country, since I am no longer running the program, that many
States are working very hard to integrate their CHIP programs
and their Medicaid Programs.
If you were to look at Badger Care in Wisconsin or look at
New Mexico's program or MI Child in Michigan, all of these
programs have names which are not Medicaid. They are designed
in many cases to make it as seamless as possible so that in
many cases, in Indiana or Wisconsin, if a child's eligibility
transfers from CHIP to Medicaid, it is transparent to the
child. It is an accounting procedure in terms of how the cost
of program is charged, but it doesn't affect the health care
for the child.
Mr. Winstead. Our program is Florida Kid Care. We cover
children up to 200 percent of the poverty level. For infants,
Medicaid is up to 200 percent, effective July 1. Then for the
younger children, 133 percent is Medicaid, and between 133 and
200 is our Title XXI program. And then for the older children,
up to 100 percent is Medicaid, and above 100 percent is our
Title XXI program. But all children are covered up to 200
percent of poverty.
Chairman Johnson. Thank you.
Mr. Cardin.
Mr. Cardin. Thank you, Madam Chair.
I would like to thank our witnesses. I am particularly
impressed by the brochure from Florida. I think it does really
put in terms that people can understand what is available for
someone who is leaving welfare and is going to work. Although I
might disagree about one aspect. It isn't as scary as it seems.
I think it is kind of scary on health coverage today. The
children have much better rules than the parent do. Too many
adults are not covered by insurance and are not eligible to be
covered by insurance, and the transitional Medicaid is
complicated, and we certainly have not done a very good job on
that.
Then you look at the eligibility, 32 States have
eligibility that if the parent is at minimum wage doesn't even
qualify for Medicaid which the States could be doing a better
job there. The States do have significant surpluses. There is
an opportunity to expand, and yet there has been a reluctance
by the States to do something to help us I think in welfare
reform by making it easier and less scary for people to go to
work.
The question I have for you, though, is: We have one
welfare director and three people in the Medicaid Program. What
is the relationship in the States between the welfare director
and the Medicaid director and maybe also the budget director
about trying to put together strategies that really require the
cooperation of all three of the levels of administration?
If we are going to make welfare reform work, we have to
have a close connection with Medicaid. The more you succeed,
the larger the Medicaid budget is going to be. Success is
measured by greater State expenditure, which doesn't always get
the budget director very happy about that policy. I am curious
about what is the relationship in your various States.
Ms. Gifford. I think you have put your finger on a crucial
element of a successful outreach campaign, having that kind of
cooperation.
Obviously, we had to work very closely together; and the
whole process of designing our CHIP program brought together
interagency, interdivisional representatives and people from
all around the community. Absolutely, that has been I think
very important to our success in Indiana, that cooperation.
We have been confronted in Indiana, because of our success
in enrollment, with budget issues. I now have budget issues,
and I kind of held my breath a few months ago communicating
those issues, wondering what the reaction would be. And I think
that is the true measure of how dedicated the policy leaders in
Indiana are that they said, OK, we have budget issues but at
least it is for a good thing. I continue to have support for
expansion as far as enrollment despite my budget issues, but
those are very critical issues that many Medicaid directors
have to worry about.
Mr. Winstead. In Florida--and I think my colleague from
Indiana made an important point earlier about the executive
direction and the leadership from the top. And I think in our
State Governor Bush has certainly made a priority, health
coverage for children. Every Tuesday afternoon the head of our
agency, the head of the Medicaid agency and the head of health
meet on Health and Human Services issues. We work very closely
together, and the budget that was just passed by the
legislature that the Governor will sign includes over $80
million appropriated to create over a hundred thousand new
slots for additional enrollment of children in health coverage.
So it just needs to be a priority, and the folks involved need
to work closely together.
Mr. Cardin. Ms. Gifford, let me at least get a response
from you. There is some information here in your State that the
individual who was not receiving cash assistance under TANF but
was receiving Medicaid, that the clock, 5-year clock was still
tolling for that individual even though the person wasn't
receiving benefits under the TANF law. Was that ever the case
and was it corrected?
Ms. Gifford. I am not sure that I can answer that question,
but I can provide that information when I get back to Indiana.
[The information follows:]
Indiana Family and Social
Services Administration
Indianapolis, IN 46707-7083
July 7, 2000
Honorable Benjamin J. Cardin
House Committee on Ways and Means
1106 Longworth House Office Building
Washington, DC 20515
Dear Congressman Cardin:
I am happy to be able to provide a response to the question that
you posed during my testimony on May 16, 2000 regarding the application
of federal time limit policies in the Temporary Assistance for Needy
Families (TANF) Program.
First of all, it is important to explain that Indiana has been
operating a welfare reform demonstration project since June 1995. Under
the terms and conditions of this demonstration, the state applies a 24-
month time limit to a portion of our TANF cash assistance adults. The
State's time limit does not apply to children.
Another provision of the State's Demonstration Project allows a
family to be considered a cash assistance recipient even though the
family's income is greater than the traditional income limits of the
program and would otherwise be ineligible for assistance. The State's
traditional program limits eligible for assistance. The State's
traditional program limits eligibility to approximately 24% of the
Federal Guidelines. The welfare reform provision allows a family to be
considered a receipient even though the family does not received a TANF
cash assistance provided their income remains below 100% of the Federal
Poverty Guidelines. These families are referred to as ``zero grant''
recipients. The advantage of this provision is to provide their income
remains below 100% of the Federal Poverty Guidelines. These families
are referred to as ``zero grant'' recipients. The advantage of this
provision is to provide a family additional support once the parent
becomes employed making the transition to work less threatening. ``Zero
grant'' families receive the full array of employment support services,
categorical eligibility for Medicaid, child support services at no cost
and priority for child care support services. Once a family's income
exceeds 100% of the Federal Poverty Guidelines as a result of new or
increased earnings, that family becomes elgibile for Transitional
Medicaid benefits.
The terms and conditions approved by the Administration of Children
and Families of the Department of Health and Human Services establish
that a month during which a family has status as a zero grant family is
a month of assistance for the purposes of the State's 24 month limit.
As a component of the State's demonstration, this provision will remain
in effect until March 31, 2001 when federal approval for the
demonstration expires. Upon expiration fo the demonstration, the State
will bring its TANF Program in full compliance with all applicable
requirements of the TANF Block Grant.
I appreciate your interest in Indiana's policies and hope that this
resolves the questions you have regarding this issue. If you have
additional questions regarding Indians' TANF policies, please feel free
to contact Char Burkett-Sims, Assistant Deputy Director of the Family
Resources Bureau. She can be reached by telephone at 317-232-4903 or at
her e-mail address [email protected]
Sincerely,
Kathleen Gifford,
Assistant Secretary
Mr. Cardin. I appreciate that.
Dr. Smith, do you want to respond on your State's
relationship?
Mr. Smith. Not speaking for Michigan but looking around the
country, what I have seen is that many States have discovered
that Medicaid is one of the biggest supporters of welfare
reform that there is. If the objective is to get people off of
welfare and get them into jobs and have them keep those jobs on
a sustained basis, then the health coverage is one of the
strongest supports that can be there. And so I think there is
increasing interest and in a number of States there is explicit
interest in working together so that these two programs work in
concert and support each other.
Mr. Cardin. Dr. Mitchell?
Dr. Mitchell. In Oklahoma as well we have a very good
working relationship with our Department of Human Services who
continues to be our eligibility determination agent in Oklahoma
and has one particular outreach worker assigned over all of the
programs so that we don't let anyone drop through any cracks,
and that has been key in maintaining our numbers.
Our Governor has been very supportive of our eligibility
expansion that took place in December, 1997. At the current
time, however, his focus and the budget office focus has turned
to paying for those individuals that we have in place and in
the program currently, and the focus that is very much on the
forefront right now is paying our providers a more appropriate
reimbursement for the services that they are providing to our
Medicaid patients.
Chairman Johnson. Thank you.
Mr. Watkins.
Mr. Watkins. Let me say thanks to the panel. I was very
impressed also with the Kid Care form. I think it is a very
nice brochure. I am always trying to figure out how to raise
money in this good job. I hope that you get a good response.
Let me say to the panel I have learned a lot today; and,
Dr. Mitchell, it is great having you here. I hope your time
allows you to come by my office so we can visit some more.
Let me state here I understand in Oklahoma we have about
$110 million of TANF money that we are getting people off of
welfare and all. I want to visit with you in more detail about
that. Does Oklahoma spend all of its CHIP funds?
Dr. Mitchell. We have not currently spent all of our CHIP
funds, no, sir.
Mr. Watkins. What percent do you have left?
Dr. Mitchell. I brought that with me. I will pull it out.
Mr. Watkins. How have you used those funds?
Dr. Mitchell. The outreach funds primarily have been used
for our outreach workers. There were some systems changes that
were implemented. Primarily, we have used those for the
outreach workers that have been the key and the integral part
to making sure that we keep those rolls up and offer the health
insurance benefit to all those that are eligible.
Mr. Watkins. You have indicated that you have eliminated
the asset eligibility.
Dr. Mitchell. Yes, sir.
Mr. Watkins. Can you elaborate what you have done on that?
Dr. Mitchell. Probably somebody who has been in the
Medicaid business longer can speak to that, but in the past,
where assets played into the determination of eligibility, that
has been eliminated. So if someone perhaps was given a piece of
land and that in the past might keep someone ineligible for
Medicaid because of that asset, that piece is no longer in the
determination process.
Mr. Watkins. You can be land poor, so to speak, with a lot
of land, but if you don't have a lot of income, you have
eligibility?
Dr. Mitchell. That is correct.
Mr. Watkins. I notice that you have your form down to two
pages?
Dr. Mitchell. Yes. We think that has made a substantial
difference.
Mr. Watkins. I wish my friend Pete Stark was here to hear
that. I would like him to hear that Oklahoma did. Most of those
people in California are from Oklahoma originally from the Dust
Bowl days.
Chairman Johnson. They lost their common sense, huh?
Mr. Watkins. That is correct.
Dr. Mitchell. One was in the Ponca City area, and I believe
the other was in the Garfield, I think, area.
Mr. Watkins. Two of the richest areas of the State.
Dr. Mitchell. That actually was a competitive bid, and we
encouraged communities across the State to apply for that bid.
We stayed clear of it, and those were the two counties that
were awarded those pilot projects.
Mr. Watkins. You have two pilots that have been done on a
competitive bid?
Dr. Mitchell. Yes, sir.
Mr. Watkins. That is interesting. How is that?
Dr. Mitchell. There were some outreach funds shared with
the Oklahoma Commission on Children and Youth who did the
administrative function of the pilot project, and through our
Office of State Finance those bids were let and awarded to two
communities that bid to show that they could be innovative in
trying to attract individuals into the Medicaid Program.
Mr. Watkins. Does it stand to reason if they were two of
the wealthiest communities in the State that they could
probably bid for it more than the poverty areas?
Dr. Mitchell. They did not have to put up the funds. The
bid process came from using the Federal funds. What they did
was have to submit their proposal to be awarded the bid.
Mr. Watkins. Maybe I am a little slow on this. I want to
look into this more.
I feel very strongly about the welfare-to-work program. I
think that reform has been working. We have probably 50 percent
plus more of our welfare recipients off. That definitely--as we
all know, we are trying to prevent them from falling through
the cracks on the Medicaid Program and the health effort
there--and we should.
I know that you have done a good job. Let me just ask the
question here--and, again, I do this from a very sensitive type
feeling. I want to get people on. I think it is good that we
are having this effort. But do any of you have--on a long-term
basis are you coordinating and meeting and working so that they
will go off one of these days?
I think it is fine and dandy, but welfare --and welfare has
a stigma. It has a stigma such that my mother would not allow
us to go welfare. I worked three part-time jobs because she
said that is what we are going to do.
Now Medicaid, we want Medicaid. We have to have it, I agree
there, but we don't want it to be a way of life. I think just
giving them everything does not let them face responsibility or
face reality. Do we have anything in the long term? Short term,
let's get them on. I hope we have a way to exit this program,
helping them on that. Are you meeting with any agency that gets
you there?
Mr. Winstead. If I may----
Mr. Watkins. Are you meeting with an agency? If I can get a
yes or no there.
Mr. Winstead. Yes, sir. And if I may say, the key thing
that we are trying to accomplish in Florida is get families off
of welfare and move to work. You are going to make more money
on welfare.
Number two, children that grow up in families that have
more money and who have working parents are going to do better
than children who grow up on welfare, which is another way of
saying long-term, chronic poverty. We have integrated our
welfare reform efforts within our overall work force efforts,
so within our work force activities we have a whole series of
constant interactions with employers, with businesses, with
economic development interests in Florida looking at incidence
of health coverage, how it is provided by employers, which I
think strategically is where we need to head, is more
integration with the work force.
Mr. Watkins. Ms. Mitchell, what are we doing in Oklahoma in
that area?
Dr. Mitchell. I don't know the answer to that, sir.
Mr. Watkins. If you don't know the answer, I am worried.
Because I think you have to be right in the middle of any
strategy or any effort. Maybe that is one thing that we can
visit about. I think we are doing wrong if we don't get them on
Medicaid when we are getting them off, but I think we are also
doing a disservice if we don't exit this program, try to get
them gainful employment and work, because that is a way of
life. It can become a way of life, and we will try to help move
them off that.
I am here and I want to say from my personal standpoint I
am thankful to this day for my mother and for her attitude.
Because she didn't take the easy way. And I think we have got
to say, hey, let's help them, but let's make sure that we
provide a way because that is how in life later on they are
going to be able to stand on their own two feet. If not, they
are going to bring their children into the same situation.
Thank you for the job you do. I appreciate that very, very
much; and it is a great track record on helping people get off
welfare and get on Medicaid. I know I am very proud of
Oklahoma, Dr. Mitchell, and all of you for what you are doing.
Madam Chair, thank you.
Chairman Johnson. I thank the panelists for their comments.
Dr. Mitchell, I would just say to my colleague Mr. Watkins'
comments about the higher income areas getting the outreach
grants, over and over again I am really struck with the problem
that the poor rural regions have in competing in education.
They don't have the grant writers.
I have one first selectman in my district who has one
administrative person. That is her town government. So when I
get her more rural road money, everybody rejoices. When they
see that the Federal application is a stack like this, she
calls me and says, I don't know why you bothered. I have
schools in my district that don't have a school lunch program
because they can't handle the administrative costs.
It would be interesting to look back and see, was the
application from the poor rural counties, was it lesser quality
for reasons that they couldn't afford to hire a consultant or
they didn't have a grant writer on staff? Because it is a
different problem to outreach in a very poor area than it is to
outreach to poor people in a higher income region. And
Connecticut has a lot of that. It is--because of the general
well-being, it is not hard to find the bottom with welfare, it
is hard to find the transition. It is not that the other grants
are not useful, but I would urge you to just note that.
Mr. Watkins. Madam Chair, you are right. I think a lot in
the lower income they have to use what money they have for the
higher percentage of the people so they don't have different
things to deal with. I am sitting on this Committee for a
reason, and I am sure interested in my area, which has always
been noted as the lowest income area in the State, Madam Chair,
and the highest rate of welfare and poverty. You well know
that.
One of the things that I have dedicated my entire public
life is to try to lift these people out of poverty--they are my
loved ones, my people throughout the area--and turn some of
those counties into economic growth area, and I am proud that
we have done some of that. But it has been a passion working on
that. We have to make sure that we have a strategy.
I will be happy to work with you. We will do whatever we
can to assist, but we have to make sure that we don't overlook
these areas until we get that done.
Chairman Johnson. And your accomplishments have been
spectacular.
We thank the States and Dr. Smith for bringing a broader
perspective. We appreciate your help in evaluating this problem
and determining what to do. Thank you.
[Whereupon, at 12:35 p.m., the hearing was adjourned.]
[A submission for the record follows:]
Community Legal Services, Inc., Philadelphia, PA
Medicaid Protections For Families Leaving Welfare
Much has been written about the problem of losing tens of
thousands of families from the Medicaid program when parents
move from welfare to work. Here are some legislative
suggestions for Congress to address the problem of Medicaid
retention. These recommendations grow out of Community Legal
Services' \1\ considerable experience in addressing this
problem, both within the state of Pennsylvania and nationally.
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\1\ Community Legal Services, Inc. of Philadelphia is a non-profit,
public interest legal aid firm representing low income people. CLS has
given a higher priority to safeguarding and reinstating Medicaid
eligibility for Pennsylvania's and the nation's poor. This paper was
prepared by Richard P. Weishaupt (215.981.3773) and Jonathan M. Stein
(215.981.3742).
1. Require use of eligibility information given in the Food
---------------------------------------------------------------------------
Stamp program.
Surprisingly large numbers of families participate in the
food stamp program but do not receive Medicaid benefits. Given
the rigor of establishing food stamp eligibility, states should
be required to use existing eligibility information (income,
alienage, household composition, etc.) often in the same
agency's files to make a Medicaid determination without a new
application and face to face interview.
2. Establish presumptive eligibility based on participation in
the School Lunch Program or the WIC program.
The Urban Institute has documented that 48.5% of uninsured
children are in the School Lunch Program and another 19.0% are
in the WIC program. Both these programs are means tested (free
school lunch is set at 130% of the federal poverty level, 185%
for reduced price lunches; WIC requires participants to be
below 185% of FPL). While these maximums do not exactly
correspond to Medicaid eligibility levels in most states, most
families are not right at the eligibility cutoff level.
Legislation could mandate that those in the programs would be
automatically eligible for, say 60 days, while a Medicaid
application was initiated. Temporary eligibility would be
actuated merely by checking a box on the relevant school lunch/
WIC form.
3. Require all states to afford families mail or telephone
redeterminations.
Now that the Medicaid caseload has so many working
families, it is time to afford those families an option that
fits with their work schedule. In many communities, people have
transportation barriers to overcome or are still reluctant to
be seen at welfare offices; eliminating the need to travel to a
welfare office will serve to de-stigmatize the program.
4. Require written withdrawals from Medicaid.
We have seen compelling data that suggests that a great
number of Medicaid families lose eligibility based on an oral
``withdrawal'' of benefits. Many of the oral withdrawals are
misunderstandings or worse; it would be a simple protection to
require those families who do want to refuse Medicaid to do so
in writing.
5. Coordinate Medicaid with the CHIP program.
Although some level of coordination is now in the CHIP
statute, much could be done to bring these two programs closer
together. For example, at the time of termination of Medicaid,
not only should the statute require consideration of other
Medicaid eligibility routes but the statute should require that
all terminees be evaluated for the CHIP program prior to
termination. (This would involve amending Sec. 1925(a)(3)(C).)
Similarly, all rejected Medicaid applicants should be
considered for the CHIP program, without further application.
6. Use IEVS to do ex parte redeterminations and verifications.
Current law requires all states to have an Income
Eligibility Verification System and to do ex parte
redeterminations (where the agency looks to its own data
sources to determine alternative Medicaid eligibility). These
systems allow states to computer check the accuracy of
information provided by applicants and recipients, using
benefits data from federal agencies such as SSA, and, more
importantly, wage data collected from the state's Unemployment
Compensation system. Moreover, HCFA has told states that they
must do redeterminations of eligibility without requiring a
face to face interview when a family loses Medicaid eligibility
under one provision but might qualify under another. (For
example, a welfare recipient who gets a job and is no longer
eligible for cash assistance will almost always qualify for 6
months of TMA benefits.) However, this HCFA directive is not as
helpful as it might be because states insist on wage
documentation from busy families. States are reluctant to use
the data contained in IEVS because, although reliable, it is
usually 3-6 months old.
A simple statutory revision could allow or require states
to use this IEVS data rather than insist on paystub
documentation, which, in a significant number of cases, is not
available.
Use of IEVS data could also obviate the need for quarterly
reporting now required under the TMA program authorized under
Sec. 1925 of the Act.
7. Mandate computer matches and reinstatement of SSI child
disability terminees who have not been afforded the protection
of Sec. 4913 of the Balanced Budget Act.
There has been disturbing evidence that states like
Georgia, Louisiana and Kentucky failed to implement Sec. 4913
that insured the protecting between 50-100,000 former SSI
children onto Medicaid. The problem has been compounded by HHS/
HCFA failing to obtain a computer match between SSI terminees
and the Medicaid enrolled to monitor national compliance and to
order reinstatement of children who were not reinstated. A
computer match and reinstatement could be done in 30 days and
is essential to insure uniform implementation of this three
year old law intended to insure access to health care for
children who, although not meeting a more strict SSI standard,
still need health care.
8. Extend coverage for those losing eligibility due to child
support to make it coterminous to TMA.
Currently families who receive child support that makes
them otherwise ineligible for Medicaid, receive an extra four
months of coverage. We suggest making this identical with the
coverage afforded under Sec. 1925, i.e., 6 months plus an
additional 6 months if income is less than 185% of FPL. This
will simplify the program, encourage child support and insure
more families.
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