New Report Shows Huge Enrollment Drops in Medicaid Among Low-Income Parents

PARENTS LOSE COVERAGE MOVING FROM WELFARE TO WORK

Since the advent of welfare reform in 1996, nearly one million low-income working parents in 15 states lost Medicaid coverage, mainly as they moved from welfare to work, according to a new report released today by Families USA. The report provides the first documentation of the health coverage effects of welfare reform on low-income parents.

The report was based on statistics provided by the 15 states with the largest number of uninsured adults - Arizona, California, Florida, Georgia, Illinois, Louisiana, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, and Virginia. Altogether these states account for 70 percent of the uninsured non-elderly adults in the United States.

During the four-year period from January 1996 through December 1999, Medicaid coverage for low-income parents in the 15 states dropped from 3,503,553 to 2,557,673 - a decline of 27 percent. Reductions in Medicaid enrollment occurred in each year, and the percentage of enrollment losses over the past two years (January 1998 to December 1999) were only slightly lower than the enrollment losses in the previous two years.

"Most parents moving from welfare to work are in jobs that provide no health coverage but are losing their Medicaid lifeline," said Ron Pollack, executive director of Families USA. "Hundreds of thousands of low-wage working parents are cast adrift without health care when they do the right thing and find jobs."

The report shows very different enrollment rate drops from state-to-state. Texas, which has the highest uninsured rate (51 percent) in the nation among non-elderly adults below 200 percent of the federal poverty line, experienced the highest percentage Medicaid enrollment losses of parents during the past two years, a drop of 30 percent. Over the course of the entire four-year period studied, Texas had the second highest (after Georgia) enrollment decline rate, 46 percent. Parental Medicaid enrollment in the state dropped from 232,380 in January 1996 to 126,368 in December 1999 - a loss of 106,012.

Among the 15 states studied over the four-year period, Tennessee had the lowest rate of parental Medicaid enrollment losses, a drop of 11 percent.

The report found numerous reasons for the declines in Medicaid enrollment of low-income parents. Many lost coverage because state computers erroneously assumed that anyone leaving welfare is no longer eligible for Medicaid. Similarly, state caseworkers often failed to notify parents leaving welfare that they might still qualify for Medicaid. Although, under federal law, parents moving from welfare to work are automatically eligible for Medicaid transition assistance, many never received that transitional coverage from the state.

According to the Families USA report, the Medicaid eligibility levels for working parents are low but vary considerably from one state to another. In Louisiana, Virginia and Texas, annual Medicaid income eligibility limits for parents in three-person families are $3,168, $4,572 and $4,728, respectively. In California, the limit is $15,228.

"In the vast majority of states, parents working at the minimum wage, $5.15 per hour, are considered to have too much income to qualify for Medicaid if they work full time," said Pollack. "In Louisiana, Virginia and Texas, parents working at the minimum wage are disqualified from Medicaid if they work more than 12, 17 and 18 hours per week, respectively."

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Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.

1201 New York Avenue NW, Suite 1100 · Washington, DC 20005
202-628-3030 · Email: info@familiesusa.org · www.familiesusa.org