February 9, 1999
Close to Half of Working Poor Parent Lack Health Insurance
Most States Not Yet Using New Option to Cover These Parents
Table of Contents
II. Data on Uninsured Parents
III. State Medicaid Coverage for Parents
IV. States Have a New Opportunity to Expand Medicaid to Cover More Low-Income Working Parents
Click here to view PDF version of this report.
Nearly half of all poor working parents lacked health insurance coverage throughout 1997, according to a new study the Center on Budget and Policy Priorities released today. The study found that working poor parents were twice as likely to be uninsured as poor parents who are unemployed.
The report, Employed but Not Insured: A State-by-State Analysis of the Number of Low-Income Working Parents Who Lack Health Insurance, also finds that few states have yet to take advantage of a new option the welfare law created that allows states to extend Medicaid coverage to low-income parents. The report notes, however, that a number of states are beginning to consider this option.
The findings of the report, which is based on Census data and provides data for the first time on the number and percentage of low-income working parents in each state who lack insurance, include the following:
- Forty-six percent of the 4.9 million working parents with income below the federal poverty line $13,650 for a family of three were uninsured in 1997.
- More than one of every three parents with incomes below 200 percent of the poverty line ($27,300 for a family of three) or 34.5 percent of such parents lacked insurance in 1997.
Due to changes in welfare programs and a robust economy, fewer low-income parents are now receiving welfare and the Medicaid coverage that typically comes with it. As a result, more of these parents are working at low-wage jobs that offer no health insurance coverage and have joined the ranks of the uninsured.
Jocelyn Guyer, health policy analyst at the Center and the report's principal author, stated: "With employer-based coverage for low-wage workers on the decline, the number of low-income uninsured parents is growing." Guyer added that "this lack of coverage can undermine the goals of welfare reform by forcing low-income parents with a medical condition to choose between their jobs and their health."
State Medicaid Programs Not Filling the Gap
The report finds that most states are not filling these gaps by offering coverage to low-income working parents through Medicaid. Although most states provide coverage to poor and near-poor children in low-income working families, their parents remain without insurance.
- In the typical state, working parents cannot qualify for Medicaid if their earnings exceed 59 percent of the poverty line, or $7,992 a year for a family of three.
- In nine states Alabama, Arkansas, Florida, Idaho, Indiana, Louisiana, Texas, Virginia and West Virginia parents cannot qualify for Medicaid if their earnings are above 37 percent of the poverty line, or $5,050 for a family of three.
- A parent in Alabama working at the minimum wage earns too much to qualify for Medicaid if she works more than 11 hours a week at the federal minimum wage of $5.15 an hour. If her job pays $7 an hour, she cannot qualify for Medicaid if she works more than 8 hours a week.
- In Indiana, a parent is ineligible for Medicaid if he works more than 17 hours a week at the minimum wage, while a parent earning $7 an hour is ineligible if he works more than 12 hours a week.
While there are some situations in which parents with somewhat higher earnings can still qualify for Medicaid, the report noted, state Medicaid rules leave vast numbers of low-income working parents without coverage.
"Parents trying to support their families with very low wages often have nowhere to turn if they need health insurance," Guyer stated. The Center's report includes data on the level of earnings at which a parent loses Medicaid eligibility in each state, as well as data on the number of hours of work in each state at which a parent employed in a minimum wage job or a $7.00-an-hour job fails to qualify for Medicaid.
In addition, some 21 states fail to extend Medicaid coverage to most parents in two-parent households. According to the report, rules in these states that largely limit coverage to parents in single-parent households stem from an old, and now widely discredited, policy left over from the old welfare system.
New Option Allows States to Close Gaps
"Although states vary in their coverage of working parents, this should not be viewed as a report about good versus bad states", noted Cindy Mann, Senior Fellow at the Center and co-author of the report. "Many of the states that rank low on the list for covering parents have expanded coverage in recent years for children in low-income working families. Some of these states also have now begun to consider expanding coverage to the working parents of these children."
Until recently, federal Medicaid rules generally denied states the option to cover parents who were not currently receiving welfare or had not recently received it. "Federal law has changed," Mann said. "States now have a new option to extend Medicaid to low-income working parents." She added that many states still seem unaware of the new option.
Under the option, the federal government will finance half to more than three-fourths of the cost of extending health insurance coverage through Medicaid to low-income working parents, with the exact percentage of the federal government's share depending on each state's Medicaid matching rate. "This option gives many states what they are looking for," Mann observed, "offering them federal matching dollars to turn their child health initiatives into family coverage initiatives for working poor families." She added that "state policymakers are beginning to recognize that using this option to provide coverage to low-income working parents can promote work and help states meet their welfare reform goals."
In recent months several states have taken advantage of the new option to expand coverage for low-income working parents, the report said.
- In October 1998, Rhode Island began covering parents with incomes up to 185 percent of the poverty line, $25,252 for a family of three. The state covers parents in both two-parent and single-parent households. The District of Columbia initiated a similar policy last fall; its eligibility limit for parents is set at 200 percent of the poverty level, or $27,300 for a family of three.
- Missouri and Wisconsin recently acted to extend Medicaid coverage to low-income working parents. Their coverage initiatives are set to take effect in coming months.
See Tables 1 and 2 for state-by-state data on the number and percentage of uninsured working parents in each state. Due to small sample sizes in Census Bureau state-by-state data, these numbers provide an approximate rather than an exact measure of the magnitude of the coverage gap in each state; because they are approximate rather than exact and because the sample sizes are smaller in some states than in others, these data should not be used to compare uninsured rates across states.
See Tables 3 and 4 for data on the level of earnings that will make working parents who are applying for Medicaid ineligible for coverage in each state.
See Table 8 for each state's federal Medicaid matching rate.
State Contacts for Employed But Not Insured
Contact these groups for comment and information about local press activity
National Center for Youth Law
Catholic Charities Colorado
Children's Health Council
Connecticut Legal Services
860-225-8678 ext. 108
Legal Assistance Resource Center ofConnecticut
860-278-5688 ext. 15
Dade County Human Services Coalition
Georgians for Children
United Vision of Idaho
Indiana Coalition on Housing and Homeless Issues, Inc.
Kentucky Task Force on Hunger
Michigan League of Human Services
Gary Gershon or Michael Nelson
Michigan Poverty Law Program
Center for Civil Justice
People and Policy Center of Mississippi
Nebraska Appleseed Center for Law in the Public Interest
NJ Catholic Conference
Leighton Holness and Thomas A. Makin
Legal Services of New Jersey
Lisa Appelrouth Guzman
Nevada Empowered Women's Project
1199 National Health and Human Service Employees Union, SEIU
Greater New York Hospital Association
Greater Upstate Law Project, Inc.
Oregon Center for Public Policy
Elizabeth Bangston Hutto
South Carolina Appleseed Legal Justice Center
Lenora Bush Reese
South Carolina Fair Share
South Dakota Community Concepts
Center for Public Policy Priorities
Wisconsin Council on Children and Families
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