December 6, 1999

Steps States Can Take to Facilitate Medicaid Enrollment of Children

The latest data from the Census Bureau show that the United States has made little progress in recent years in reducing the number of low-income children without health insurance coverage, despite strong economic growth, the lowest unemployment rate in a quarter of a century, and continued expansions in children's eligibility for publicly-funded coverage. In 1998, nearly one out of four low-income children — 7 million low-income children, with family income below 200 percent of the federal poverty line — went without coverage.

This lack of progress cannot be attributed to shortcomings in the new Children's Health Insurance Program, which was just getting started in 1998, the year covered by the new census data. Instead, the lack of progress appears to result largely as a result of the decline in the number of poor children who are enrolled in Medicaid. Between 1996 and 1998, the number of children with incomes below the federal poverty line on Medicaid declined by 1.3 million, from 9.2 million in 1996 to 7.9 million in 1998, and the uninsured rate among poor children climbed to 26.5 percent, from 24.1 percent in 1997. These data are consistent with other studies and reports showing that welfare changes have inadvertently — and inappropriately — caused families eligible for Medicaid to lose out on coverage.

The decline in Medicaid participation described above has occurred, to a large extent, because state systems have not fully "delinked" Medicaid eligibility from eligibility for welfare. In addition, there is a general lack of understanding about Medicaid eligibility on the part of families, government agencies and community-based groups. For example, many people to do not realize that children in working families may qualify for Medicaid. Numerous application barriers also account for the large gap between the number of children eligible for Medicaid and the number insured by that program. Many states that have used the funds available under the Children's Health Insurance Program to create separate state coverage programs have designed simple application and enrollment systems. Although states have considerable flexibility under current law to take similar steps to simplify and streamline Medicaid application and enrollment procedures, they have not always taken advantage of these opportunities.

Successfully reducing the number of uninsured children will depend on aggressive outreach efforts to inform families about eligibility, to revamp state and local agency computer systems and train caseworkers to ensure families do not lose Medicaid coverage as a result of welfare changes, and to design application forms and enrollment systems that are easy for families to navigate. The following are 10 steps states can take to facilitate the enrollment of children in Medicaid:

1. Adopt policies and procedures to implement the "delinking" of Medicaid eligibility from eligibility for welfare. Computer systems need to be revamped to assure that welfare policies and procedures — such as terminations due to time limits or sanctions — do not spill over to Medicaid. Systems need to be in place to assure that families diverted from receiving ongoing cash aid are still given the opportunity to apply for Medicaid coverage. In addition, families leaving welfare for work or families that would otherwise become ineligible for Medicaid due to earnings need to be provided the Transitional Medical Assistance (TMA) to which they are entitled.

2. Shorten and simplify the Medicaid application. Redesign applications so forms are user-friendly. Make sure questions are clear and unnecessary questions are eliminated. Exercise flexibility to significantly reduce the verification burden on families. Applicants who have trouble gathering the required documents may be denied Medicaid even though they are eligible. Under federal Medicaid law, the only verification that families must submit is proof of the child's immigration status, a requirement applicable to non-citizens. Simplified applications make outstation sites — locations other than the welfare office where pregnant women and children can apply for Medicaid — more effective. They also make it more feasible for staff of community-based organizations to play a direct role in assisting families in navigating the application process.

3. Eliminate the assets test used to determine eligibility for Medicaid for pregnant women and children. Dropping the assets test is one way to simplify the Medicaid application and minimize the verification burden. It also can save on the administrative costs of processing the application.

4. Allow applicants to submit their completed applications through the mail. For working parents or residents of rural areas, making a trip to the Medicaid office can be difficult or costly. Medicaid offices often are open only during regular work hours and overcrowding may cause long waits for service. Community-based organizations can have the mail-in applications on hand and can assist families in completing and mailing the forms.

5. Expand the use of Medicaid "outstations" to ensure that enrollment sites are available at disproportionate share hospitals and federally qualified health centers (FQHCs) — locations that are required by law. States also can set up outstations at other locations, such as family support centers and school-linked service centers, as well as child care programs, WIC clinics and other places frequently visited by families with eligible children.

6. Adopt the new Medicaid "Presumptive Eligibility" option. Immediate enrollment of children who appear to meet the Medicaid income guidelines — pending formal eligibility determination — can help children get routine care and needed medical treatment without delay. In addition to traditional Medicaid providers, the law allows WIC agencies, Head Start programs and agencies that determine eligibility for subsidized child care to make presumptive eligibility determinations. Families still are obligated to file a formal application within a few weeks. Community-based qualified entities are in a good position to ensure a formal application is completed since they are likely to have regular contact with families.

7. Adopt the new Medicaid 12-month continuous eligibility option. Allowing children to remain enrolled in Medicaid for a full year, regardless of fluctuations in family income, minimizes the obligation families have to submit reports and the need to reaffirm their eligibility at frequent intervals. This option also can help reduce disruptions in coverage and can save on administrative costs.

8. Make income eligibility rules consistent for children of all ages. If one child in a family is eligible for health insurance, then all children in that family should be eligible. Age-based distinctions in Medicaid eligibility guidelines, which may mean a younger child in a family is eligible for coverage, but an older sibling does not qualify, or is eligible for a different program, can place families in the position of not being able to provide the same level of care for all their children.

9. Coordinate CHIP-funded separate programs with the existing Medicaid program. Key features of a coordinated system include use of a single, joint application and uniform eligibility rules for both Medicaid and the CHIP-funded separate program. A coordinated system can make it easier for states to meet the requirement to screen children applying for a CHIP-funded separate program to see whether they are eligible for Medicaid and if so, enroll those children in Medicaid. A coordinated system also can prevent health insurance coverage from being denied, delayed or discontinued, if the applicant enters the system at the "wrong" point or if eligibility changes due to fluctuations in family income.

10. Target Medicaid administrative funds for outreach and enrollment activities. Contract with community-based groups to conduct Medicaid outreach and enrollment activities. Medicaid administrative funds, available at a 50 percent matching rate, can be used for outreach and enrollment activities. In addition, as a result of the 1996 welfare law, $500 million in Medicaid administrative funds are available to states at a 75 to 90 percent matching rate. Congress recently lifted the sunset on the use of these funds, so states have access to their allocations until the funds are fully expended.

For more information: Donna Cohen Ross and Jocelyn Guyer, Congress Lifts the Sunset on the "$500 Million Fund" Extends Opportunity for States to Ensure Parents and Children Do Not Lose Coverage, Center on Budget and Policy Priorities, December 1999. Jocelyn Guyer, Matthew Broaddus, and Michelle Cochran, Missed Opportunities: Declining Medicaid Enrollment Undermines the Nation's Progress in Insuring Low-Income Children, Center on Budget and Policy Priorities, October 1999. Cindy Mann, Ins and Outs of Delinking: Promoting Medicaid Enrollment of Children Who Are Moving In and Out of the TANF System, Center on Budget and Policy Priorities, March 1999. Donna Cohen Ross and Wendy Jacobson, Free and Low-Cost Health Insurance: Children You Know are Missing Out, Center on Budget and Policy Priorities, January 1999.

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Selected Simplification Criteria Medicaid
for Children and CHIP-funded Separate State Programs (SSP)

	Joint application	Face to Face Interview	Dropped Asset Test	Presumptive Eligibility	12-month Continuous Eligibility10
Alabama	Yes	—		—
Alabama SSP		—		—
Alaska	N/A	—		—	—
Arizona	Yes	—		—
Arizona SSP		—		—
Arkansas1/2	N/A		—	—	—
California	Yes	—		—	—
California SSP		—		—
Colorado	Yes	—	—	—	—
Colorado SSP		—		—
Connecticut3	Yes	—
Connecticut SSP		—		—
Delaware	Yes	—		—	—
Delaware SSP		—		—
District of Columbia	N/A	—		—	—
Florida	Yes	—		—	(children under 5)
Florida SSP4		—		—	—
Georgia5	Yes			—	—
Georgia SSP		—		—	—
Hawaii6	N/A	—		—	—
Idaho	N/A	—	—	—
Illinois	Yes	—		—	—
Illinois SSP		—		—
Indiana3	N/A	—
Iowa	Yes	—		—	—
Iowa SSP		—		—
Kansas	Yes	—		—
Kansas SSP		—		—
Kentucky	Yes	—		—	—
Kentucky SSP		—		—	—
Louisiana	N/A	—		—
Maine	Yes	—		—	—
Maine SSP		—		—	—
Maryland	N/A	—		—	—
Massachusetts	Yes	—			—
Massachusetts SSP		—			—
Michigan3	Yes	—
Michigan SSP3		—
Minnesota	N/A	—		—	—
Mississippi	N/A	—		—
Missouri7	N/A	—	—	—	—
Montana	No		—	—	—
Montana SSP		—		—	—
Nebraska	N/A	—
Nevada	No		—	—	—
Nevada SSP		—		—
New Hampshire	Yes	—			—
New Hampshire SSP		—		—	—
New Jersey3	Yes	—			—
New Jersey SSP3		—			—
New Mexico5/6	N/A
New York3/5/8	No
New York SSP		—			—
North Carolina	Yes	—		—
North Carolina SSP		—		—
North Dakota	No	—	—	—	—
North Dakota SSP		—		—
Ohio	N/A	—		—	—
Oklahoma	N/A	—		—	—
Oregon	Yes	—	—	—	—
Oregon SSP		—	—	—	—
Pennsylvania9	No	—		—	—
Pennsylvania SSP		—		—
Rhode Island	N/A	—		—	—
South Carolina	N/A	—		—
South Dakota	N/A	—		—	—
Tennessee1	N/A			—	—
Texas	N/A			—	—
Utah2/6	Yes			—	—
Utah SSP		—		—	—
Vermont	N/A	—		—	—
Virginia	Yes	—		—	—
Virginia SSP		—		—	—
Washington	N/A	—		—
West Virginia	Yes			—	—
West Virginia SSP		—		—
Wisconsin	N/A			—	—
Wyoming6	Yes		—	—	—
Wyoming SSP		—		—	—
1. In Arkansas and Tennessee mail-in applications are used for the Medicaid expansion groups only. Applicants eligible under pre-expansion guidelines are required to have a face-to-face interview. 2. Arkansas and Utah still count assets in determining Medicaid eligibility for some "poverty level" children. 3. Connecticut, Indiana, Michigan, New Jersey and New York have adopted presumptive eligibility, but have not yet implemented the procedures. 4. Florida operates two CHIP-funded separate state programs. Healthy Kids is available in most counties and covers children age 5 through 19, as well as younger siblings of enrolled children in some areas. Medi-Kids covers children age 0 through 5 and is available statewide. 5. In Georgia a separate Medicaid application is still in use; a face-to-face interview is required when the separate Medicaid application is used, but it can be done outside the Medicaid office. In New Mexico a face to face interview is required, however if a child is enrolled through the presumptive eligibility process, the contact with the presumptive eligibility provider will meet this requirement. In New York, a contact with a community-based "facilitated enroller" will meet the face to face interview requirement. 6. The Medicaid agency will permit a telephone interview. 7. Missouri has eliminated the asset test for applicants eligible under pre-expansion guidelines. Children in the Medicaid expansion group are subject to asset test of $250,000. 8. A joint application for Medicaid and the separate state program is being piloted. 9. Pennsylvania has separate applications for Medicaid and its separate state program. Families are allowed to use either application to apply for Medicaid or the separate state program. 10. A child is enrolled for 12 months, regardless of changes in family income or circumstances.