Medicaid: Transitional Coverage Can Help Families Move From	 
Welfare to Work (23-APR-02, GAO-02-679T).			 
                                                                 
Welfare reform significantly changed federal policy for 	 
low-income families with children and established a five-year	 
lifetime limit on cash assistance. Welfare reform also extended  
transitional Medicaid assistance through 2001. States have	 
implemented various initiatives to help families move from cash  
assistance to the workforce, including some enhancements to	 
transitional Medicaid. These initiatives likely helped to cut	 
cash assistance caseloads by more than half from 1996 through	 
mid-2001. Low-wage or part-time jobs--which are common for newly 
working individuals--often do not come with affordable health	 
insurance, thus making transitional Medicaid coverage an	 
important option. The implementation of transitional Medicaid	 
assistance varied across the 21 states that GAO reviewed. State  
practices enhanced beneficiaries' ability to retain Medicaid	 
coverage. However, many families did not receive their full	 
transitional Medicaid assistance benefits because they failed to 
report their income three times during the 12-month period of	 
coverage. Amending the Medicaid statute to provide states with	 
greater flexibility to ease income-reporting requirements, as has
been done for other aspects of the Medicaid program, could	 
facilitate uninterrupted health insurance coverage for families  
moving from cash assistance to the workforce.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-02-679T					        
    ACCNO:   A03157						        
  TITLE:     Medicaid: Transitional Coverage Can Help Families Move   
From Welfare to Work						 
     DATE:   04/23/2002 
  SUBJECT:   Disadvantaged persons				 
	     Employment 					 
	     Federal aid programs				 
	     Health care programs				 
	     Health insurance					 
	     Program graduation 				 
	     Public assistance programs 			 
	     State-administered programs			 
	     Welfare benefits					 
	     Welfare recipients 				 
	     Workfare						 
	     Medicaid Program					 

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GAO-02-679T
     
A

Test i mony Before the Subcommittee on Health, Committee on Energy and
Commerce, House of Representatives

For Release on Delivery Expected at 3: 00 p. m. MEDICAID Tuesday, April 23,
2002 Transitional Coverage Can

Help Families Move from Welfare to Work

Statement of William J. Scanlon Director, Health Care Issues

GAO- 02- 679T

Mr. Chairman and Members of the Subcommittee: I am pleased to be here today
as you consider the role of Medicaid in helping families? transition from
welfare to the workforce. Since 1988, the Medicaid program has offered
transitional Medicaid assistance, which provides certain families who are
losing Medicaid as a result of employment or increased income up to 1 year
of additional Medicaid health

insurance coverage. Transitional Medicaid assistance was originally enacted
for a 10- year period, and has twice been extended to help provide continued
health insurance coverage to families moving into employment. 1 The
enactment of federal welfare reform in August 1996 significantly changed
federal welfare policy for low- income families with children in

several ways, including establishing a 5- year lifetime limit on cash
assistance. 2 The welfare reform law also extended transitional Medicaid
assistance through 2001, thus continuing an important link to health
insurance coverage for individuals as their economic circumstances changed.
States have implemented a variety of initiatives intended to help families
move from cash assistance to the workforce, including some enhancements to
transitional Medicaid. These initiatives have likely contributed to a drop
in cash assistance caseloads of more than 50 percent

from 1996 through mid- 2001. 3 Because the transitional Medicaid provision
is due to expire in September 2002 and you are considering its extension,
you asked us to provide information on the role this program plays in
supporting transitions from welfare to work. Accordingly, my remarks today
will focus on how

1 The Family Support Act of 1988 created the transitional Medicaid
assistance program as sect. 1925 of the Social Security Act, and was scheduled
to expire on September 30, 1998. See Pub. L. No. 100- 485, sect. 303( a), 102
Stat. 2343, 2385, and 2391. The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 extended states? obligation to provide

transitional Medicaid assistance through 2001. See Pub. L. No. 104- 193, sect.
114( c), 110 Stat. 2105, 2180. The Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 extended the sunset provision to
September 30, 2002. See Pub. L. No. 106- 554, Appendix F, sect. 707, 114- 2763A-
463, 114- 2763A- 577. 2 See The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996, Pub. L. No. 104- 193, sect. 103, 110 Stat. 2105,
2137. 3 See U. S. General Accounting Office, Welfare Reform: States Provide
TANF- Funded Work

Support Services to Many Low- Income Families Who Do Not Receive Cash
Assistance, GAO- 02- 615T (Washington, D. C.: April 10, 2002).

 transitional Medicaid assistance provides low- income working families an
option to maintain health insurance coverage and

 states have used transitional Medicaid to provide health insurance
coverage to families.

My comments are based largely on our previously issued reports and testimony
on Medicaid and welfare reform. 4 In summary, transitional Medicaid
assistance is a key protection offered to

families at a critical juncture in their efforts to move from welfare to
work. Employment in low- wage or part- time positions- which is common for
these newly working individuals- frequently does not provide adequate access
to affordable health insurance, whether through employersponsored or
individually purchased health insurance, thus making transitional Medicaid
coverage an important option. Our earlier work

showed that, for the 21 states we reviewed, the implementation of
transitional Medicaid assistance varied across the states and that certain
state practices had enhanced beneficiaries? ability to retain Medicaid
coverage. For example, some states reported increasing training for state
eligibility determination workers to better inform beneficiaries of this
entitlement and how to access it. We also found, however, that many

families did not receive their full transitional Medicaid assistance
benefits because they failed to report their income three times, as
required, throughout the 12- month period of coverage. Amending the Medicaid
statute to provide states with additional flexibility to ease income-
reporting requirements for the coverage period of transitional Medicaid
assistance, as has been done for other aspects of the Medicaid program,
could further facilitate uninterrupted health insurance coverage for
families moving from

cash assistance to the workforce. 5 4 See GAO related products at the end of
this statement. 5 See U. S. General Accounting Office, Medicaid Enrollment:
Amid Declines, State Efforts to Ensure Coverage After Welfare Reform Vary,
GAO/ HEHS- 99- 163 (Washington, D. C.: Sept. 10, 1999). In this report, we
recommended that the Congress consider allowing states to lessen or
eliminate requirements for beneficiary income reporting in transitional
Medicaid assistance. We also recommended that the Administrator of the
Health Care Financing

Administration (HCFA) (1) determine the extent to which transitional
Medicaid is reaching the eligible population and (2) provide states with
guidance regarding best approaches for implementing this benefit. Since that
time, HCFA, now the Centers for Medicare and Medicaid Services, has acted on
the second recommendation but not the first.

Background Transitional Medicaid assistance offers families moving from cash
assistance to employment the opportunity to maintain health insurance

coverage under Medicaid, a joint federal- state health insurance program.
Medicaid spent about $216 billion in fiscal year 2001 on coverage for
certain low- income individuals. 6 Transitional Medicaid assistance provides

certain families losing Medicaid as a result of employment or increased
income with up to 1 year of Medicaid coverage. 7 Families moving from cash
assistance to work are entitled to an initial 6 months of Medicaid coverage
without regard to the amount of their earned income, and 6 additional months
of coverage if family earnings, minus child care costs, do not exceed 185
percent of the federal poverty level. 8 To qualify for either 6month period,
a family must have received Medicaid in 3 of the 6 months immediately before
becoming ineligible as a result of increased income. 9 6 States administer
Medicaid within broad federal guidelines that specify the categories of low-
income individuals that states must cover and the categories that are
optional. However, not all low- income individuals are eligible for
Medicaid; for example, most childless adults are not eligible. In fiscal
year 1999 (the most recent enrollment data

available), Medicaid financed coverage for nearly 41 million individuals. 7
Prior to welfare reform, some states received waiver authority under sect. 1115
of the Social Security Act to extend Medicaid benefits beyond the 12 months
allotted in sect. 1925 of the Social Security Act. After August 22, 1996, this
waiver became subject to a budget neutrality

test, which meant that the cost of extending coverage had to be offset by
transitional coverage. 8 In 2002, the federal poverty level for a family of
three was $15,020, or about $1, 252 per month. 9 GAO/ HEHS- 99- 163,
September 10, 1999.

When federal welfare reform was enacted in 1996, states implemented a
variety of initiatives intended to help families move from welfare to the
workforce. Welfare reform provided states additional flexibility in helping
cash assistance recipients to both find work and achieve family
independence. As a result, states have expanded and intensified their
provision of work support services such as those for job search, job
placement, and job readiness. 10 Many individuals in this population had

low skills and faced a number of barriers to maintaining work and
independence. For example, our work has shown that factors such as limited
English proficiency, poor health, and the presence of a disability were some
of the factors that affected the extent to which former cash assistance
recipients were able to find and keep employment. 11 Maintaining health
insurance coverage is important to persons entering the

workforce because there are important adverse health and financial
consequences to living without health insurance. The availability of health
insurance enhances access to preventive, diagnostic, and treatment services
as well as provides financial security against potential catastrophic costs
associated with medical care. Research has demonstrated that uninsured
individuals are less likely than individuals with insurance to have a usual
source of care, are more likely to have difficulty in accessing health care,
and generally have lower utilization

rates for all major health care services. Uninsured individuals are more
likely than those insured to forgo services such as periodic check- ups and
preventive services, well- child visits, prescription drugs, dental care,
and eyeglasses. As a result, individuals not covered by health insurance may
need acute, costly medical attention for conditions that might have been
preventable or minimized with early detection and treatment. 10 GAO- 02-
615T, April 10, 2002.

11 See U. S. General Accounting Office, Welfare Reform: Moving Hard- to-
Employ Recipients Into the Workforce, GAO- 01- 368 (Washington, D. C.: March
15, 2001).

Transitional Medicaid Limitations in private sources of coverage underscore
the importance of Assistance Can Fill

transitional Medicaid assistance as an option for those moving from cash
assistance to employment. Private health insurance is not accessible to or
Gaps in Accessibility of affordable for everyone. Although most working
Americans and their Private Health families obtain health insurance through
employers, many workers do not Insurance for LowIncome have coverage because
their employers do not offer it or the coverage offered is limited or
unaffordable. Lack of insurance is more common

Workers among certain types of workers, employers, and industries and may

disproportionately represent individuals transitioning from cash assistance
to work. For example, individuals who work part- time or are employed in
low- wage jobs are less likely to have access to affordable
employersponsored

coverage. Furthermore, those who do not have employersponsored coverage may
find alternative sources of coverage, such as the individual insurance
market, expensive or altogether unavailable. Without continued access to
Medicaid, some of these individuals, who are often in low- wage jobs, will
have limited or no access to alternative coverage and

could end up uninsured. Private Sources of Health

Employment- based coverage is the primary means for nonelderly Insurance Are
Not Americans to obtain health insurance, and over two- thirds of nonelderly
Universally Available and

adults obtained their coverage through an employer in 2000. However, a May
Have Coverage

significant number of workers do not have health insurance because either
their employers do not offer it or they choose not to purchase it. In 2000,
Limitations 30 million nonelderly adults were uninsured, even though 75
percent worked for some period during the year. (See fig. 1.)

Figure 1: Percentage of Uninsured Nonelderly Adults That Were Employed, 2000

24.1 43.4 Full- time

32.5 Part- time

Nonworker Source: GAO analysis of the March 2001 Supplement, Current
Population Survey of nonelderly adults (18- to 64- year- olds).

Lack of insurance coverage is more common among certain types of workers,
employers, and industries. Part- time employees and employees of small firms
(fewer than 10 employees) are more likely to be uninsured

than employees who work full- time or for a large company. Individuals
working in certain industries are less likely to be offered health
insurance. For example, in 1999, more than 30 percent of workers in the
construction, agriculture, and natural resources (for example, mining,
forestry, and fisheries) industries were uninsured, as were about 25 percent
of workers in wholesale or retail trade. In contrast, 10 percent or less of
workers in the finance, insurance, real estate, and public employment
sectors were

uninsured. These patterns may disproportionately affect individuals leaving
cash assistance because they often work in low- wage jobs, parttime, or in
industries such as retail that often do not provide health coverage.

Young adults, aged 18 to 24, are more likely than any other age group to be
uninsured, largely because certain characteristics of their transition to
the workforce- working part- time or for low wages, changing jobs
frequently, and working for small employers- make them less likely to be
eligible for employer- based coverage. Among those aged 18 to 24, 27 percent
were

uninsured, and among those aged 25 to 34, 21 percent were uninsured in 2000.
(See fig. 2.)

Figure 2: Uninsured Population By Age Group, 2000 30

Percentage uninsured 25 20 15 10

5 0

0- 17 18- 24 25- 34 35- 44 45- 54 55- 64 Age

Source: GAO analysis of the March 2001 Supplement, Current Population Survey
of nonelderly (under 65 years).

Even when employer- sponsored coverage is available, its costs may be
prohibitive or its benefits very limited. Employer- sponsored health plans
may not subsidize coverage for dependents, may restrict or exclude certain
benefits, or may subject participants to out- of- pocket costs either
through premium contributions or cost- sharing provisions that low- wage
workers

may find unaffordable. For example, a 2001 survey by Mercer/ Foster Higgins
found that, on average, large employers (500 or more employees) require
employees enrolled in preferred provider organizations (PPO) to contribute
$56 each month for employee- only coverage, or $191 each month for family
coverage. 12 For lower- wage workers, such as individuals leaving cash
assistance and entering the workforce, even coverage that is 12 Mercer/
Foster Higgins, National Survey of Employer- sponsored Health Plans 2001:

Report on Survey Findings (New York: William H. Mercer, 2002), p. 13. The
Mercer/ Foster Higgins survey is representative of all employers in the
United States with at least 10 employees.

affordable for a worker may be too expensive for covering the rest of the
family members. Those without access to employer- sponsored coverage may
look to the individual insurance market to obtain coverage, and in 2000, 5
percent of nonelderly Americans (or 12.6 million individuals) relied on
individual health insurance as their only source of coverage. However,
restrictions on who may qualify for coverage and the premium prices charged
can have direct implications for consumers. For example, depending on their
health status and demographic characteristics such as age, gender, and
geographic location, individuals in the majority of states may be denied
coverage in the private insurance market or have only limited benefit
coverage available to them. In addition, while all members of an
employersponsored

group health plan typically pay the same premium for employment- based
insurance regardless of age or health status, in most states individual
insurance premiums are higher for older or sicker individuals than for
younger or healthier individuals, potentially making

this option unaffordable. 13 For example, a recent study examined individual
insurers? treatment of applicants with certain preexisting health
conditions, such as hay fever. The study of insurers in eight localities
found that for applicants with hay fever, 8 percent would decline coverage;
87 percent would offer coverage with a premium increase, benefit limit, or

both; and 5 percent would offer full coverage at the standard rate. 14 Cost
differences are often exacerbated by the fact that individuals must absorb
the entire cost of their health coverage, whereas employers usually pay for
a substantial portion of their employees' coverage. 13 The Health Insurance
Portability and Accountability Act of 1996 (HIPAA) guarantees some
individuals leaving employer- sponsored group health plans access to
continued coverage or to a product in the individual market. See 29 USC sect.
1181 (2000), 42 USC sect. 300gg (Supp. II 1996). Although individuals leaving
public insurance programs, such as Medicaid, are not eligible for this HIPAA
protection, they may obtain coverage in most states from high- risk pools
that provide coverage for applicants denied individual coverage due to
health status. These policies tend to cost 25 to 100 percent more than rates
charged to healthy individuals. 14 Georgetown University Institute for
Health Care Research and Policy and K. A. Thomas and Associates, How
Accessible is Individual Health Insurance for Consumers in Less- ThanPerfect

Health? (Washington D. C.: The Kaiser Family Foundation, 2001), http:// www.
kff. org (downloaded on August 14, 2001). The authors examined underwriting
treatment of hypothetical applicants by 19 insurers in eight markets around
the country.

Transitional Medicaid Because of limitations in the availability of private
insurance- especially Assistance Can Provide

for low- paid, part- time workers and those in certain industry sectors that
Continued Insurance often characterize jobs available to individuals moving
from cash Coverage assistance to work- transitional Medicaid assistance is
an important option for health insurance coverage. Individuals with lower
incomes have

a much higher than average probability of being uninsured. (See fig. 3.)
Typically, former welfare recipients entering the workforce work part- time
or in low- wage jobs that are less likely to provide health coverage or only

provide coverage at a prohibitive cost. For example, we noted in our 1999
report on states? experiences in implementing transitional Medicaid
assistance that one state found that out of nearly l, 600 former welfare
recipients surveyed, 43 percent of the heads of households worked fewer than
32 hours per week and did not have health insurance, and 32 percent held
low- wage jobs, such as in retail stores, hotels, restaurants, and health
care establishments. Figure 3: Uninsured Population, by Income as a
Percentage of Poverty Level, 2000

35 Percentage uninsured

30 25 20 15 10

5 0

<100 100- 149 150- 199 200- 299 300- 399 >400 Income as a percentage of
federal poverty level ($ 17,050 for a family of four in 2000) Source: GAO
analysis of the March 2001 Supplement, Current Population Survey of
nonelderly

individuals (under 65 years).

In addition, although some employers of former cash assistance recipients
may not offer health insurance, numerous studies have shown that a
significant number of these individuals have access to employer coverage but
choose not to accept it. For example, a recent study showed that although
about 50 percent of individuals transitioning from cash assistance to
employment had access to employer coverage, only about one- third opted to
participate in the employer- sponsored plan. 15 The relatively low ?take-
up? rate is due largely to the high costs of many employer health plans.
Transitioning workers, who commonly earn between $7 and $8 an

hour, may simply be unable to afford their share of the premium, since their
annual earnings range from 73 percent to 111 percent of the federal poverty
level. (See table 1.)

Table 1: Hourly Wages as a Percentage of the Federal Poverty Level for a
Family of Three, 2002

Salary as a percentage of Hourly wage Hours per week Annual earnings the
federal poverty level

$5. 15 a 30 $8,034 53 40 $10,712 71 $7. 00 30 $10,920 73

40 $14,560 97 $8. 00 30 $12,480 83

40 $16,640 111 a Represents the minimum wage, which was last increased on
September 1, 1997.

Source: GAO analysis of salaries in relation to the 2002 federal poverty
level of $15,020 for a family of 3.

15 Gregory Acs, Pamela Loprest, and Tracy Roberts, Final Synthesis Report of
Findings from ASPE ?Leavers? Grant (Washington, D. C.: The Urban Institute,
2001). To conduct studies of families that had left welfare, the Office of
the Assistant Secretary for Planning and Evaluation of the Department of
Health and Human Services awarded competitive grants to select states and
large counties in September 1998. This report synthesizes the findings from
15 of these studies.

States? Efforts While the Medicaid statute provides families moving from
welfare to work

Encouraged Use of with up to 12 months of transitional Medicaid coverage, we
have reported that certain states had obtained waivers from HCFA to extend
the length of Transitional Medicaid, coverage provided, and that the share
of eligible families that actually but Not All Eligible received this
entitlement varied significantly by state. States offered from 1 Families
Received to 3 years of transitional Medicaid assistance in 1999. In the
several states that were able to provide data on participation in
transitional Medicaid Assistance

assistance, we found that participation rates among newly working Medicaid
beneficiaries ranged from 4 to 94 percent. Several states had made efforts
to facilitate beneficiaries' participation in transitional Medicaid. For
example, nine states reported developing outreach and education materials to
inform families and eligibility determination workers about transitional
Medicaid assistance. While such approaches helped make transitional Medicaid
more available, beneficiaries? failure to report income as required often
resulted in their losing eligibility after the first 6 months. Length of
Coverage and

States? implementation of transitional Medicaid coverage varied, resulting
Program Participation Was in differing lengths of time for which coverage
was provided and differing Mixed Among States rates of family participation.
As of 1999, the most current national data reported, 10 states- Arizona,
Connecticut, Delaware, Nebraska, New Jersey, Rhode Island, South Carolina,
Tennessee, Utah, and Vermont-

provided over 1 year of coverage, while the remaining states provided 1 year
of coverage. (See fig. 4.) In the several states that were able to provide
such data, transitional Medicaid participation rates ranged from

about 4 percent of the families moving from cash assistance in one state to
94 percent of such cases in another. However, low participation rates in
transitional Medicaid assistance did not always indicate that families had
lost Medicaid coverage altogether. For example, officials in the state with
a 4 percent participation rate said that most families losing cash
assistance were still enrolled in Medicaid through other eligibility
categories for lowincome families.

Figure 4: Number of Months States Provided Coverage for Transitional
Medicaid Assistance, 1999

WA ME MT

ND MN

a OR

VT ID NH SD

WI NY

MA MI

RI a WY

IA CT

NE PA

NJ NV UT

CA IL

OH DE

IN CO WV

MD MO

VA DC

KS KY

a NC

TN AZ OK NM

AR SC

MS AL

GA LA TX

FL AK

HI 12 months' eligibility (40 states and the District of Columbia) 24
months' eligibility (7 states) Other time period for eligibility (3 states)

a Rhode Island and Tennessee provided 18 months? eligibility, and Vermont
provided 36 months. Source: Department of Health and Human Services,
Administration for Children and Families, Annual Report to Congress
(Washington, D. C.: 1999).

States? Initiatives Facilitated We found that several states had initiatives
in place to facilitate Beneficiary Use of beneficiaries? access to
transitional Medicaid assistance. The following are Transitional Medicaid
examples of such initiatives.

Assistance, but Not All

 Nine states reported developing specific materials regarding transitional
Families Maintained

Medicaid assistance in easy- to- understand language for eligibility
Coverage determination workers and beneficiaries.

 One state revised its computer systems so that eligible families leaving
cash assistance due to employment were automatically transferred to
transitional Medicaid assistance coverage. In addition, this state?s

eligibility workers randomly contacted families who were leaving cash
assistance to determine their health insurance status and to ensure that
they obtained the additional months of Medicaid coverage for which they were
eligible. As a result of this state?s efforts, about 70 percent of the
families leaving cash assistance or Medicaid received transitional Medicaid
coverage.

 Officials in three other states encouraged increased participation in
transitional Medicaid assistance by contacting families with closed cash
assistance cases to determine whether these families had obtained the
additional months of Medicaid coverage if so entitled. One of these states,
which also provided 24 months of transitional Medicaid assistance, reported
that 77 percent of eligible families were receiving this benefit. However,
even with such successful enrollment efforts, many families did

not receive the full transitional Medicaid assistance benefits because they
failed to periodically report their income as required. The Medicaid statute
requires that beneficiaries report their income three times during the 12
months of transitional Medicaid assistance: once in the first 6- month
period and twice in the second 6- month period. Failure to report income
status in either of these 6- month periods results in termination of
transitional Medicaid benefits.

In 1999, we reported that families? failure to periodically submit required
income reports often resulted in their not receiving transitional Medicaid
coverage for the full period of eligibility. For example, officials in three
states we reviewed told us that families typically received only 6 months of

transitional Medicaid, generally because they failed to submit the required
income reports- and not because of a change in income that made them
ineligible for transitional Medicaid. In contrast, the state that had a 94

percent participation rate for transitional Medicaid offered coverage for 24
months and had received HCFA approval to waive the periodic income-
reporting requirements. Overall, we found that states that waived
incomereporting

requirements reported higher participation rates than states that did not.

In implementing public programs such as Medicaid, difficult trade- offs
often exist between ease of enrollment for eligible individuals and program
integrity efforts to ensure that benefits are provided only to those who are
eligible. The experience of some states in easing statutory periodic income-
reporting requirements proved successful in increasing

participation for eligible beneficiaries. In view of concerns that
beneficiary reporting requirements were limiting the use of the transitional
Medicaid benefit, HCFA proposed legislation to eliminate beneficiary
reporting requirements for the full period of eligibility (up to 1 year). To
date, no

action has been taken on this proposal. In our earlier report we recommended
that the Congress may wish to consider allowing states to lessen or
eliminate periodic income- reporting requirements for families receiving
transitional Medicaid assistance, provided that states offer adequate
assurances that the benefits are extended to those who are eligible.
Precedent for a full year of coverage in Medicaid has been provided in other
aspects of the Medicaid program. For example, the Balanced Budget Act of
1997 allowed states to guarantee a longer period of Medicaid coverage for
children, such as 12 months, regardless of changes in a family?s financial
status. 16 As of July 2000, 14 states had implemented this option. 17 A
similar approach could facilitate uninterrupted health insurance coverage
for families that are moving from cash assistance to the

workforce. 16 See Pub. L. No. 105- 33, sect. 4731, 11 Stat. 251, 519 (1997).
According to an official from the Centers for Medicare and Medicaid Services
(CMS), the transitional Medicaid assistance reporting requirements override
other Medicaid provisions, such as continuous eligibility. Thus, according
to CMS? interpretation, a state's use of continuous eligibility does not
eliminate the periodic income- reporting requirements for transitional
Medicaid assistance. 17 Donna Cohen Ross and Laura Cox, Making It Simple:
Medicaid for Children and CHIP Income Eligibility Guidelines and Enrollment
Procedures, Individual State Profiles (Washington, D. C.: The Kaiser
Commission on Medicaid and the Uninsured, October 2000).

Concluding Transitional Medicaid assistance can play an important role in
helping Observations

individuals move successfully from cash assistance to employment, thus
further advancing the goals of welfare reform. Without access to Medicaid
coverage, these individuals, who are often in low- wage jobs, might have
limited or no alternative health coverage and join the ranks of the
uninsured. While our earlier work demonstrated that states varied in the

extent to which families were participating in transitional Medicaid
assistance, states that worked to minimize obstacles- particularly by
reducing or eliminating income- reporting requirements- had higher
participation rates. Removing periodic reporting requirements would help
further increase the use of transitional Medicaid assistance, provided that
sufficient safeguards remained in place to ensure that only qualified
individuals receive the benefits. Mr. Chairman, this concludes my prepared
statement. I will be happy to

answer any questions that you or Members of the Subcommittee may have.
Contacts And

For more information regarding this testimony, please contact William J.
Acknowledgements

Scanlon at (202) 512- 7114 or Carolyn L. Yocom at (202) 512- 4931. Susan
Anthony, Karen Doran, JoAnn Martinez- Shriver, and Behn Miller made key
contributions to this statement.

Related GAO Products

Welfare Reform: States Provide TANF- Funded Work Support Services to Many
Low- Income Families Who Do Not Receive Cash Assistance. GAO02- 615T.
Washington, D. C.: April 10, 2002.

Health Insurance: Proposals for Expanding Private and Public Coverage. GAO-
01- 481T. Washington, D. C.: March 15, 2001.

Welfare Reform: Moving Hard- to- Employ Recipients Into the Workforce. GAO-
01- 368. Washington, D. C.: March 15, 2001.

Welfare Reform: Progress in Meeting Work- Focused TANF Goals. GAO- 01522T.
Washington, D. C.: March 15, 2001.

Health Insurance: Characteristics and Trends in the Uninsured Population.
GAO- 01- 507T. Washington, D. C.: March 13, 2001.

Medicaid Enrollment: Amid Declines, State Efforts to Ensure Coverage After
Welfare Reform Vary. GAO/ HEHS- 99- 163. Washington, D. C.: September 10,
1999.

(290187)

GAO United States General Accounting Office

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