Coordinating Medicaid and Food Stamps, 9/14/01

COORDINATING MEDICAID AND FOOD STAMPS
How New Food Stamp Policies Can Reduce Barriers to Health Care Coverage for Low-Income Working Families
by Liz Schott, Stacy Dean, Jocelyn Guyer

I.Introduction

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One of the unexpected consequences of welfare reform has been the decline not only in cash assistance caseloads but also in the number of low-income families receiving food stamps and Medicaid benefits. While the face of low-income families is increasingly that of low-wage workers rather than cash welfare recipients, many of these families remain poor and qualify for food stamps and Medicaid. Millions of these low-income children and families are not, however, receiving these benefits despite being eligible for them.

One of the key challenges in the wake of welfare reform is how to improve the systems and processes that deliver food stamps and Medicaid to low-income working families not receiving cash welfare. Generally, efforts to increase enrollment in food stamps and boost enrollment in Medicaid have proceeded on separate tracks. As a result, low-income working families often face two sets of uncoordinated and duplicative application, reporting, and renewal requirements if they seek to secure and maintain both food stamps and Medicaid. The lack of coordination between Medicaid and food stamps creates unnecessary confusion and paperwork for families and agency staff alike.

Until recently, federal rules gave states relatively little flexibility to simplify and streamline the food stamp requirements that apply to working families, making it difficult, and even of questionable value, for states to coordinate and align their Medicaid and food stamp procedures. Recent federal rules and other clarifications in the food stamp program, however, provide new opportunities for states to improve the access of low-income working families to food stamps. These food stamp options also provide states an opportunity to improve the access of low-income working families to Medicaid benefits. Because these food stamp options have the potential to improve the enrollment of families in Medicaid, it is important that state Medicaid agencies and non-profits working on health care access policy — and not just those concerned with hunger issues — understand the potential advantages of the food stamp changes and participate in shaping state food stamp policy decisions accordingly.

Example of How Food Stamps Can Assist In Simplifying Medicaid

In a number of states, many eligible children and families lose Medicaid coverage at renewal because of failure to complete the paperwork or other procedures required by the state to remain enrolled. Both Washington State and Illinois have implemented systems that automatically extend Medicaid eligibility based on information contained in a food stamp quarterly report or application for recertification. This approach ensures that no Medicaid-eligible food stamp recipient will lose Medicaid coverage for failure to comply with Medicaid redetermination procedures. Because the Medicaid renewal is automatic and invisible to the family, a food stamp recipient never needs to complete Medicaid review forms. Medicaid continues with minimal renewal effort by the state agency and no effort required of the family.

Here are some examples of how these approaches serve to continue Medicaid:

In Washington State, recipients of TANF or food stamps generally have eligibility reviewed every three months. At each review of TANF or food stamps, the computer automatically restarts the Medicaid 12-month eligibility period. Thus, for example, if a recipient has a TANF or food stamp review in February, 2001, the computer will automatically restart family-based Medicaid for 12 months, until February 2002. This process continues so long as the recipient completes scheduled reviews and remains Medicaid-eligible. If the recipient does not complete the next scheduled (May, 2001) review for food stamps or TANF, the food stamps and TANF will close but Medicaid remains open as no review is due until February, 2002.

In Illinois, families with children are generally certified for 12 months in the food stamp program and must submit a short report regarding their financial circumstances every three months. Under the Medicaid family coverage category, families receive Medicaid for 12-month periods. Each time a household submits a food stamp quarterly report, the state uses the information to renew Medicaid eligibility for a new 12 months eligibility period. Consider a household that begins receiving Medicaid and food stamps in January, 2001. In March, the family submits a food stamp quarterly report. In addition to using the information to continue food stamps for the next three months period, the state uses the information on that report to renew Medicaid eligibility for 12 months. This results in extending the Medicaid eligibility period by 3 months. If the household fails to submit a quarterly report, it loses its food stamps. Medicaid, however, continues for an additional 9 months (based on the previous quarterly report.)

The purpose of this paper is to review from a Medicaid perspective the key options that states now have that relate to certain requirements that families must meet to secure and retain food stamps. The paper begins with a brief explanation of why individuals interested in health insurance programs should be interested in the implications of these new food stamp options. It then reviews the reporting and certification rules in the food stamp and Medicaid programs and explores how the new food stamp options make it easier for states to simplify and coordinate food stamp and Medicaid requirements. For example, the section entitled "Using Food Stamp Quarterly and Semi-Annual Reporting for Ongoing Medicaid Certification" describes how states can use the information they gather from families for food stamp purposes to reduce the paperwork that families must file to remain enrolled in health care coverage.⁽¹⁾ Finally, the paper covers some important implementation issues that states may wish to consider when evaluating the benefits of improved coordination.

End Notes for Introduction:

1. This paper focuses primarily on the relationship between food stamps and the family-based and children's Medicaid coverage categories. Most families who receive Medicaid coverage will also be eligible for food stamps. Depending upon the income of a particular family, the eligibility standards selected by the state, and, at times, the age of the children, a family that qualifies for food stamps might qualify for Medicaid coverage for the entire family through section 1931 of the Social Security Act or the children might qualify for children's coverage category of Medicaid or a separate state child health insurance program funded under SCHIP. At a minimum, most children in families with incomes below 130 percent of the federal poverty line (the food stamp eligibility cut-off) qualify for Medicaid or SCHIP in every state.