January 2003

Grant Results

SUMMARY

From 1997 to 2000, researchers at the George Washington University Center for Health Services Research and Policy studied the effects of the health-related provisions of the Welfare Reform Act of 1996 and their implications for access to Medicaid and for safety net providers.

The research team gathered data through surveys of patients and staff from health centers and state agencies, interviews with state officials, and case studies.

Key Findings
Key findings from the project include:

  • The diversion process in the states has fundamentally altered conditions for access to Medicaid.
  • States have failed to recognize the need to restructure their Medicaid programs in response to the new welfare paradigm of "work instead of welfare."
  • Serious deficiencies exist in federal qualified health center outstation activities.
  • The 1996 reform laws effectively created more uninsured people by denying Medicaid access to legal permanent residents, resulting in additional strain on the provider safety net.

Funding
The Robert Wood Johnson Foundation (RWJF) supported this project through two grants totaling $875,428.

 See Grant Detail & Contact Information
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THE PROBLEM

The Personal Responsibility and Work Opportunity Act of 1996 (the Welfare Reform Act) had many implications for Medicaid. Some of the changes in major health-related areas included:

  1. Severing the automatic eligibility link between Medicaid and welfare programs.
  2. A state option to eliminate Medicaid coverage for all aliens who were then qualified for coverage.
  3. Eliminating Medicaid coverage for five years for all future qualified aliens (e.g., refugees, asylum seekers) entering the country.

The Welfare Reform Act turned much of the authority for determining Medicaid policies over to the states, which resulted in Medicaid policy and practice becoming and remaining variable from state to state. Following the legislation, state Medicaid enrollments declined, and the number of low-income working families without health insurance grew.

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THE PROJECT

RWJF funded these grants to The George Washington University for a project to study the effects of welfare reform on Medicaid eligibility and on access to health care. The Center for Health Services Research and Policy (formerly the Center for Health Policy Research) conducted the project.

Under the primary grant (ID# 030734), investigators focused on identifying, describing and analyzing changes in state Medicaid programs with respect to policy, program design and administration. The first investigation concerned outstation enrollment, which allows applications for Medicaid at locations other than welfare offices. Project staff conducted a nationwide survey of the country's 654 federally qualified health centers regarding their outstation enrollment activities, and did telephone interviews on the subject with Medicaid officials in the 50 states and the District of Columbia.

The researchers conducted a second investigation in collaboration with the Washington-based Center on Budget and Policy Priorities, a nonpartisan research organization that studies policies affecting low- and moderate-income people, in its State Policy Documentation Project. The collaborators surveyed all 50 states and the District of Columbia about the de-linking of Medicaid from cash welfare programs (including, among others, Temporary Assistance for Needy Families [TANF] and food stamps) for families with children.

The project also evaluated state diversion programs under welfare reform. Diversion encompasses a range of state efforts designed to assist families seeking cash assistance in ways that avoid enrolling them in welfare; the most common are lump sum payment programs, which provide one-time cash payments and mandatory applicant job search programs. However, diversion programs potentially render many families previously eligible for Medicaid ineligible. Along with a survey of state diversion programs nationwide, project staff conducted case studies in five local communities. (This part of the project was funded in part by a $295,000 grant from DHHS and the Administration for Children and Families.)

Project staff expanded the intent of the original project with a study on the impact of the 1996 Illegal Immigration Reform and Immigrant Responsibility Act and welfare reform laws on immigrants' ability and willingness to access Medicaid and health care. For this they did case studies in four sites: Chicago, Washington, San Diego and Brownsville (Texas).

From these research efforts, project staff compiled the following: a report on outstation Medicaid enrollment programs; two monographs on state diversion programs; and a two-volume report on immigrants' experiences with and attitudes toward health care and the new laws. (See the Bibliography.)

RWJF funded grant ID# 034315 as supplemental funding that allowed project staff to add two additional studies to the project. Researchers did a sub-study concerning the status of Section 1931 changes in Medicaid programs in states that have diversion programs. Section 1931, part of the Welfare Reform Act, created a new avenue to Medicaid eligibility for families and fundamentally altered the welfare system by eliminating receipt of cash assistance as a Medicaid pathway. Section 1931 also allows states to tailor their Medicaid eligibility criteria to account for the potential effects of their diversion programs on participants' access to Medicaid. Project staff conducted follow-up interviews with officials in the 31 states with diversion programs and reviewed the states' Section 1931 amendments.

For the second sub-study, project staff did a nationwide survey of community health center patients to examine their experiences applying for Medicaid and their perceptions about stigma (whether people feel negatively about themselves because they participate in Medicaid). Researchers conducted a pilot survey of nine federally qualified health centers s in New Hampshire and an 11-state survey in which they asked more than 1,100 patients in 30 community health clinics about their insurance history and access to Medicaid and health care.

The supplementary grant resulted in one report about states' use of Section 1931 and three reports concerning Medicaid stigma. (See the Bibliography.)

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FINDINGS

The two grant projects produced numerous findings, including the following:

  • The emergence of diversion fundamentally altered conditions for access to Medicaid. By mandating work-related activities as a condition for receiving cash assistance, diversion means that more applicants have earned income; Medicaid eligibility remains tied to no earned income, thereby creating substantial barriers to Medicaid for families.
  • States have failed to recognize the need to restructure their Medicaid programs in response to the new welfare paradigm of "work instead of welfare." Although Section 1931 in effect gives states the opportunity to establish Medicaid as a health insurance program for low-income families and provide an essential support to families choosing work instead of welfare, this opportunity has been largely unrealized.
  • Serious deficiencies exist in federally qualified health center outstation activities, a federal program designed to enhance enrollment of children in Medicaid. While federally qualified health centers represent a major source of health care for low-income uninsured children, this study suggests that nearly half of these centers do not engage in outstationing activities and that one-third of the centers that do engage in them do not conduct all mandatory activities of outstationing. Lack of state support was the most frequently cited reason for failure to perform these activities.
  • The traditionally held notion of so-called "welfare stigma" is not a barrier to enrollment. The types of stigma that do have a significant impact on Medicaid enrollment are related to how people are or expect they will be treated during the application process and after enrollment.
  • Investigators estimated that of the 1998 community health center patient study sample, 27 percent of uninsured adult patients and 70 percent of uninsured child patients were eligible for Medicaid but not enrolled.
  • Few states have considered using the Section 1931 options to promote Medicaid access for diverted families. Most of the states (20) with lump sum payment diversion programs have not modified their Section 1931 eligibility criteria to disregard the lump sum payment when determining eligibility for Medicaid. Thus, diverted families may be ineligible for Medicaid by electing to receive a lump sum payment in lieu of cash assistance.
  • Few states are making concerted efforts to inform parents in low-income families that they may be eligible for Medicaid without being eligible for, or even applying for, cash assistance. This circumstance heightens the possibility that potentially eligible families may fall through the cracks.
  • The 1996 reform laws effectively created more uninsured people by denying access to Medicaid for legal permanent residents who had previously been eligible; this resulted in additional strain on the provider safety net and making access to care more difficult for all groups of uninsured, citizens and immigrants alike.
  • Barriers exerting a negative effect on immigrants' willingness to apply for Medicaid were related more to vulnerable and low-income population status than to barriers related to immigrant status and the 1996 laws. In mixed immigrant families, however, non-citizen parents reported that they are reluctant to access services for citizen children for fear of jeopardizing non-citizen family members.

Recommendations

Among their recommendations for policy changes, researchers suggested that:

  • To accommodate applicants with earned income due to diversion, a fundamental restructuring of Medicaid is necessary. Although states have broad authority to do this, they may need greater technical capacity to accomplish it.
  • In the wake of welfare reform and its consequences for the working poor, an overarching critical analysis is needed to determine if the Medicaid program in its current configuration is capable of providing coverage for the growing numbers of low-income workers and their families.

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AFTER THE GRANT

The center received an 18-month $285,000 grant from the Kaiser Family Foundation to continue tracking states' activities using Medicaid as health insurance for low-income working families.

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GRANT DETAILS & CONTACT INFORMATION

Project

The Effects of Welfare Reform on Access to Health Care

Grantee

George Washington University (Washington,  DC)

  • Assessing the Implementation of Health-Related Provisions of the Welfare Reform Act
    Amount: $ 771,852
    Dates: February 1997 to June 2000
    ID#:  030734

  • Supplemental Funding to Examine the Implications of Welfare Reform on Access to Health Care
    Amount: $ 103,576
    Dates: July 1998 to September 1999
    ID#:  034315

Contact

Kathleen A. Maloy, J.D., Ph.D.
(202) 530-2368
kmaloy@gwu.edu
Sara Rosenbaum, J.D.
(202) 296-6922
sarar@gwu.edu

Web Site

http://www.gwumc.edu/sphhs/healthpolicy

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Articles

Rosenbaum S and Maloy KA. "The Law of Unintended Consequences: The 1996 Personal Responsibility and Work Opportunity Act and Its Impact on Medicaid for Families with Children." Ohio State Law Journal, 60(4): 1443–1478, 1999.

Reports

Darnell J, Maloy KA and Nolan L. States' Use of Options Under Section 1931 to Account for the Effects of Diversion on Access to Medicaid. Washington, D.C.: Center for Health Services Research and Policy, The George Washington University, 1999.

Maloy KA, Pavetti L, Shin P and Darnell J. A Description and Assessment of State Approaches to Diversion Programs and Activities Under Welfare Reform. An Interim Report of the Findings by the Administration for Children and Families and the Assistant Secretary for Planning and Evaluation U.S. Department of Health and Human Services. Washington, D.C.: Center for Health Policy Research, The George Washington University, 1998.

Maloy KA, Pavetti L, Darnell J and Shin P. Diversion As a Work-Oriented Welfare Reform Strategy and Its Effect on Access to Medicaid: An Examination of the Experiences of Five Local Communities. Washington, D.C.: Center for Health Policy Research, George Washington University, 1999. Also available online.

Maloy, KA, Darnell J and Rosenbaum S. Work Instead of Welfare: States' Responses to the New Welfare Paradigm and the Implications for Access to Medicaid. Washington, D.C.: Center for Health Services and Policy, The George Washington University, 1999.

Maloy KA, Darnell J, Nolan L. et al. Effect of the 1996 Welfare and Immigration Reform Laws on Immigrants' Ability and Willingness to Access Medicaid and Health Care Services: Volume I, Synthesis Report, Focus Group Reports. Washington, D.C.: Center for Health Services Research and Policy, The George Washington University, 2000. Also available online.

Maloy KA, Darnell J, Nolan L et al. Effect of the 1996 Welfare and Immigration Reform Laws on Immigrants' Ability and Willingness to Access Medicaid and Health Care Services: Volume II, Findings from Four Metropolitan Sites. Site visit reports. Washington, D.C.: Center for Health Services Research and Policy, The George Washington University, 2000. Also available online.

Rosenbaum S, Maloy KA, Stuber J and Darnell J. Initial Findings from a Nationwide Study of Outstationed Medicaid Enrollment Programs at Federally Qualified Health Centers. Washington, D.C.: Center for Health Policy Research, The George Washington University, 1998.

Stuber J, Maloy KA and Rosenbaum S. Understanding the Insurance Status of Patients in Nine New Hampshire Community Health Centers: A Pilot Study. Washington, D.C.: Center for Health Policy Research, The George Washington University, 1998.

Stuber J, Maloy KA, Rosenbaum S and Jones KC. Beyond Stigma: What Barriers Actually Affect the Decisions of Low-Income Families to Enroll in Medicaid?—Issue Brief. Washington, D.C.: Center for Health Services Research and Policy, The George Washington University, 2000. Also available online.

Presentations and Testimony

Julie Darnell, "What Does Welfare Reform Have to Do with Medicaid?" at the National Association of Community Health Centers 22nd Annual Policy and Issues Forum, March 1997, Washington, D.C.

Julie Darnell, "Welfare Reform and Medicaid: A Look at the Past and Present," at the National Association of Community Health Centers 28th Annual Convention and Community Health Institute, August 1997, New Orleans, La.

Julie Darnell, "The Welfare/Medicaid Interaction: Implications for Maternal and Children's Health," keynote speech at the Missouri Perinatal Association 21st Annual Conference, March 1998, Jefferson City, Mo.

Julie Darnell, "Medicaid Outstationing Enrollment Activities at Federally Qualified Health Centers: A Progress Report Seven Years after Enactment of Federal Law," at the Second Annual Chicago and Great Lakes Health Services Research Symposium, March 1998, Chicago, Ill.

Julie Darnell, "Immigration and Welfare Reform Revisited," at the Northwest Regional Primary Care Association, Region X Primary Care Conference, May 1998, Boise, Idaho.

Kathleen A. Maloy, "TANF and Medicaid: What Are the Implications for Policy and Practice," at the Public Health Social Work Bi-Regional Conference, University of North Carolina at Chapel Hill, May 1998, Chapel Hill, N.C.

Kathleen A. Maloy, "Findings from Study of State Diversion Programs and Implications for Medicaid," at the 15th Annual Association for Health Services Research Conference, June 1998, Washington, D.C.

Julie Darnell, "Medicaid Outstationed Enrollment at Federally Qualified Health Centers: A Progress Report Seven Years after Enactment of Federal Law," at the Association for Health Services Research 15th Annual Meeting, June 1998, Washington, D.C.

Kathleen A. Maloy, "Findings from Study of State Diversion Programs and Implications for Medicaid," at the American Public Welfare Association Meeting of the National Council of State Human Services Administrators, July 1998, Washington, D.C.

Kathleen A. Maloy, "Successful Strategies for Enrolling the Harder-to-Serve Populations in Medicaid Managed Care," at the Annual Conference of the National Academy of State Health Policy, August 1998, San Diego, Calif.

Jennifer Stuber, "Results from a Survey of Community Health Center Patients in New Hampshire," at the Annual Conference of the National Association of Community Health Centers, August 1998, New York, N.Y.

Kathleen A. Maloy, "Lessons for Expanding Medicaid Under Section 1931 from Research on Diversion: Experiences of Five Local Communities in Implementing Work-Oriented Welfare Reform Strategies," at the National Conference of State Legislators Meeting of Human Services and Health Heads, June 1999, Washington, D.C.

Kathleen A. Maloy, "Effects of Diversion Under Welfare Reform on Access to Medicaid and the Availability of Section 1931 Options," at the National Medicaid Eligibility Conference sponsored by the US Department of Health and Human Services, September 1999, Kansas City, Mo.

Julie Darnell, "Diversion as a Welfare Reform Strategy and Its Effect on Medicaid: Unintended but Not Unavoidable Consequences," at the Annual Conference of the American Public Health Association, November 1999, Chicago, Ill.

Kathleen A. Maloy, "Diversion as a Welfare Reform Strategy and Its Effect on Medicaid," at the National Health Policy Forum, November 1999, Washington, D.C.

Kathleen A. Maloy, "Maintaining Medicaid Enrollment in the Wake of Welfare Reform," at the National Health Policy Forum, November 18, 1999, Washington, D.C.

Kathleen A. Maloy, "Effects of the 1996 Welfare and Immigrant Reform Laws on Immigrants' Access to Medicaid and Healthcare Services," at the Annual Conference of the Association for Health Services Research, June 2000, Los Angeles, Calif.

Kathleen A. Maloy, "Barriers to Medicaid Enrollment as Reported by CHC Patients: What Is the Actual Effect of Stigma on Decisions to Enroll?" at the 2000 Primary Care Symposium sponsored by the Department of Health and Human Services, Health Services and Resources Administration, Bureau of Primary Health Care, July 2000, Bethesda, Md.

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Report prepared by: Jan Hempel
Reviewed by: Janet Spencer King
Reviewed by: Molly McKaughan
Reviewed by: Marian Bass
Program Officer: Michael Rothman

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