A Report from Families USA
June 2000

Go to Work, Do Not Collect Health Insurance: Low Income Parents Lose Medicaid

INTRODUCTION In May 1999, Families USA issued a report on the earliest effects of welfare reform. Losing Health Insurance: The Unintended Consequences of Welfare Reform found that, as of 1997, approximately 675,000 low-income people had lost Medicaid coverage and become uninsured due to welfare reform. Several subsequent studies by other researchers have confirmed and expanded upon those findings. It is now generally accepted that welfare reform has contributed to the growth in the number of Americans without health insurance.

Children have been disproportionately affected by welfare reform: Children account for two-thirds of those who lost Medicaid coverage due to welfare reform. The decline in children's insurance coverage, however, has been offset to some extent by the implementation of the Children's Health Insurance Program (CHIP) in the states. A Families USA study of Medicaid and CHIP enrollment in the 12 states with the most uninsured children found that, from 1996 to 1999, nearly one million children lost Medicaid, but many of these children were then enrolled in newly expanded Medicaid programs or the new CHIP programs. While enrollment of children in Medicaid alone declined by 8.9 percent over these three years, combined Medicaid and CHIP enrollment dropped by 2.0 percent.

Although the parents of these children also lost coverage because of welfare reform, until now there have been no studies of welfare reform's impact on the health coverage of parents. To find out what is actually happening to low-income parents* in the wake of welfare reform, Families USA gathered data on the insurance status of the low-income population and on parents' Medicaid enrollment in the 15 states with the largest number of uninsured low-income, non-elderly adults between 1996 and 1999. Those states are: Arizona, California, Florida, Georgia, Illinois, Louisiana, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, and Virginia. Among them, these states are home to 70 percent of the low-income, under-65 adult population without health insurance in America today.

These state enrollment numbers reveal a disturbing trend: Medicaid enrollment of low-income parents is declining rapidly. As states implemented welfare reform over the past four years, they failed to ensure that parents moving from welfare to work retained needed health coverage. What is more, there has been no major initiative to offset these declines and expand coverage of parents comparable to the expansions of Medicaid and CHIP for children. Although states can receive federal funds for at least half of the cost of expanding Medicaid coverage of parents, few have taken advantage of this opportunity.

[Return to top]

KEY FINDINGS

Uninsured, Low-Income, Non-Elderly Adults

• Among the 15 states with the largest number of uninsured low-income adults, Texas has the highest percentage of uninsured low-income adults (51 percent) and Pennsylvania has the lowest percentage (28 percent).(See table 1.) Among all 50 states, Texas has the highest percentage of uninsured low-income adults and Pennsylvania has the third lowest.
•  Among the 15 states with the largest number of uninsured low-income adults, California had the most (2,822,000) and Tennessee had the fewest (314,000).

Table - Uninsured Adults* Below 200 Percent of the Federal Poverty Level in 15 State, by State (in thousands)              

Parents' Enrollment in Medicaid over Four Years (January 1996 to December 1999)

• In the 15 states with the most uninsured low-income adults, low-income parents' enrollment in Medicaid declined from 3,503,553 in January 1996 to 2,557,673 in December 1999. This is a decline of 945,880 parents, or 27 percent. (See table 2.)
•  The three states with the greatest percentage declines in parents enrolled in Medicaid during the four-year period from January 1996 to December 1999 were: Georgia (-50 percent), Texas (-46 percent) and Ohio (-42 percent).
•  The three states with the smallest percentage declines in parents enrolled in Medicaid during that four-year period were: Tennessee (-11 percent), California (-19 percent), and Illinois (-19 percent)

 The three states with the greatest declines in the number of low-income parents enrolled in Medicaid over the four-year period were: California (-155,846), New York (-123,630), and Texas (-106,012)

 Table2- Drop in Medicaid Enrollment of Parents in 15 States,            
January 1996 to December 1999*            

Overall, in the 15 states there was a decline in every year from January 1996 through December 1999. The decline for the earlier two-year period January 1996 through January 1998 (-16 percent) was slightly larger than the decline from January 1998 through December 1999 (-13 percent).

 Table 3
 Drop in Medicaid Enrollment of Parents in 15 States,
 January 1998 to December 1999*

Parents' Enrollment in Medicaid over the Past Two Years (January 1998 to December 1999)

Among the 15 states, 390,106 low-income parents lost Medicaid coverage from January 1998 to December 1999.(See table 3.)

In six of the 15 states (Florida, Michigan, New Jersey, North Carolina, Tennessee, and Texas), the decline in the number of parents enrolled in Medicaid over the past two years (January 1998 to December 1999) was larger than the decline during the previous two years (January 1996 to January 1998).

The three states with the largest percentage declines in parents' Medicaid coverage during the past two years were Texas (-30 percent), Florida (-26 percent), and Michigan (-24 percent).

The three states with the smallest percentage declines in parents' Medicaid coverage during the past two years were California (down less than 1 percent), Louisiana (-6 percent), and Pennsylvania (-9 percent).

The three states with the largest numerical declines in parents' Medicaid coverage during the past two years were New York (-59,728), Texas (-54,661), and Florida (-50,451).

For a print copy of this report, contact Families USA at 202-628-3030

[Return to top]