Medicaid Enrollment

Low-income families are entitled to keep their Medicaid coverage regardless of whether they are receiving cash assistance, but welfare reform has made it difficult for the states to identify and enroll families that qualify for cash assistance and those that are making the transition to work. Procedural difficulties with income reporting have limited the extent to which families are receiving transitional Medicaid and maintaining their eligibility for it; as a result, some are being terminated from their insurance despite being eligible. Medicaid enrollment among the nonelderly and nondisabled adults and children declined by about 1.7 million, or 7 percent, between 1995 and 1997, while welfare participation declined by 3.1 million, or 23 percent. This raises questions about whether the states have been able to link welfare and Medicaid policies in a way that consistently ensures Medicaid coverage for those who are eligible for it. GAO recommends that Congress revise the Social Security Act to relieve these procedural difficulties. The Health Care Financing Administration could also serve as a source of technical assistance and help disseminate information on states' best practices in implementing transitional Medicaid.

GAO noted that: (1) between 1995 and 1997, Medicaid enrollment declined nationwide, but substantially less than welfare participation; (2) overall, Medicaid enrollment among the nonelderly and nondisabled adults and children declined by about 7 percent, compared with a 23-percent decline in welfare participation; (3) shifts in individual states' Medicaid enrollment for these adults and children during this period ranged from a 19-percent decline in Wisconsin to a 26-percent increase in Delaware; (4) while most states experienced declines in Medicaid enrollment, enrollment increased in some states, in part as a result of individual state program expansions; (5) on the other hand, Medicaid and welfare enrollment declines have been attributed to strong state economies, low unemployment rates, and new state welfare-to-work initiatives; (6) the smaller declines in Medicaid enrollment may also be due to federal eligibility protections built into welfare reform and ongoing expansions of Medicaid coverage for low-income children that predate welfare reform; (7) one eligibility protection that predates welfare reform--transitional Medicaid assistance--provides an additional year of Medicaid coverage for individuals who lose Medicaid eligibility as a result of employment or increased income; (8) the extent to which transitional Medicaid has affected national enrollment trends, however, is uncertain because of the lack of uniform reporting and tracking of this entitlement; (9) GAO's analysis shows that changes in state-level welfare policies and practices can both positively and negatively influence Medicaid enrollment; (10) recognizing that the income reporting requirements can limit beneficiaries' access to the transitional Medicaid entitlement, the Health Care Financing Administration (HCFA) has submitted a legislative proposal to eliminate these requirements for up to 1 year; and (11) GAO's work shows that increased state flexibility to ease reporting requirements could facilitate the transition from welfare to work and make Medicaid more available to eligible individuals.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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