MEDICAID; HEALTH INSURANCE;

WELFARE - MEDICAL ASSISTANCE (MEDICAID); INSURANCE - HEALTH;

Federal laws/regulations; Connecticut laws/regulations;

You asked for a list of states that offer subsidized health insurance for adults that is comparable to or more generous than Connecticut’s Section 1931 coverage for non-disabled adult caretaker relatives of children enrolled in Medicaid.

The bulk of the information in this report comes from federal Center for Medicare and Medicaid Services (CMS) fact sheets and conversations with CMS staff. We also relied on information provided by the National Conference of State Legislatures (NCSL).

SUMMARY

Every state must offer Section 1931 Medicaid coverage to families receiving cash assistance using income limits that are no lower than those that were in place at the time Congress passed federal welfare reform legislation in 1996. But states have the discretion to offer coverage to other caretaker relatives who may not be receiving cash assistance. In Connecticut, Section 1931 coverage is available to parents and caretaker relatives of children receiving Medicaid whose income does not exceed 100% of the federal poverty level (FPL), regardless of whether

they receive cash assistance. This report focuses only on those states that provide Medicaid to caretaker relatives who do not receive cash assistance. (Parents making the transition from cash welfare to work can get up to two years of Medicaid with higher incomes. )

We do not know the total number of states providing Medicaid to these caretaker relatives. However, NCSL reports that currently five states (California, Maine, New Jersey, Ohio, and Rhode Island) and the District of Columbia (DC) offer Section 1931 Medicaid coverage to adult caretakers with income limits equaling or more generous than Connecticut’s program. They all offer this coverage using limits tied to the FPL: California (100%), Maine (150%), Ohio (100%), Rhode Island (100%), and the District of Columbia (200%). (New Jersey offers this coverage up to 133% of the FPL but is phasing it out. New applicants may not have incomes higher than 30% of the FPL. ) Governor Davis has likewise recommended lowering California’s limit to 60% of the FPL but this has not been approved by the legislature. (Given rising budget deficits, several states are proposing Medicaid cuts and some of these scale back adult Medicaid coverage. A recent Center on Budget and Policies and Priorities paper www. cbbp. org reports on these activities. )

Section 1931 coverage is not the only way states can expand subsidized health care coverage, although it is perhaps the easiest one since states can offer this coverage through amendments to their Medicaid state plans and do not have to show that they are budget neutral. Some states have obtained federal waivers (either from Medicaid or State Children’s Health Insurance Program (SCHIP) rules) to offer adult coverage at the same or higher income limit than Connecticut’s. A 1115 SCHIP waiver is appealing because it allows states to receive a higher (65%) match on program expenditures than allowed under Medicaid. (The Medicaid match in Connecticut is 50%. ) But unlike traditional Medicaid, which is an entitlement, SCHIP is funded from a block grant from which each state receives an allotment. States that have 1115 Medicaid waivers, for which the reimbursement is the same as regular Medicaid, often cap enrollments and impose other requirements that make it less generous than traditional Medicaid.

Moreover, although they offer an alternate route to coverage, waivers are not necessarily equivalent to straight Medicaid coverage, which requires nominal, if any, coinsurance and offers a fairly broad array of services. Almost all waiver states require premiums, co-payments, or both, although these coinsurance payments are usually capped. And many limit the types of Medicaid services covered.

New Jersey, Rhode Island, Wisconsin, and Minnesota have Section 1115 SCHIP waivers to provide adult coverage with income limits at or above 100% of the FPL. Nine states use Section 1115 Medicaid waivers to offer this coverage. In the latter states, the family coverage is usually a part of a larger expansion initiative.

A number of states have received approval to provide or expand adult coverage through the use of Health Insurance Flexibility and Accountability waivers (HIFA), a Bush administration initiative. States use either the Medicaid or SCHIP waivers to provide more innovative health care expansions. But, these typically involve enrollment limits, higher cost-sharing for certain groups (like adults), and more limited services. According to NCSL, only two states have actually implemented these initiatives. We have excluded them from this report but can send you information about them if you would like. You can also look at an earlier OLR report, 2002-R-0148, which discusses the initiative, albeit briefly.

HEALTH CARE EXPANSIONS TO COVER ADULTS

Section 1931 of the Social Security Act

As part of the federal welfare reform legislation of 1996, Congress enacted a new section of the Medicaid law (Section 1931), which essentially de-linked Medicaid from cash assistance. (Previously, people receiving cash assistance were automatically eligible for Medicaid. ) Section 1931 prohibits states from setting eligibility for Medicaid at levels lower than their pre-August 16, 1996 levels to ensure that people do not lose their coverage. States were, however, allowed to use less restrictive eligibility criteria by disregarding a portion of working parents’ income, eliminating an asset test, extending benefits to two-parent families, or raising income limits to adjust for inflation.

Connecticut’s Section 1931 Coverage

In Connecticut, the Department of Social Services was able to disregard excess income over the 1996 limits (which were the same as the cash benefit amount) to enable families who were receiving Temporary Family Assistance (TFA), working, and earning less than 100% of poverty to continue to get Medicaid.

In 1999, the legislature expanded its Section 1931 coverage to include adult caretaker relatives who were not receiving cash assistance with incomes up to 185% of the FPL with no asset test. Here again, the state used the less restrictive methodology allowed by federal law to get to this higher level by disregarding a higher amount of earnings. The following year, the legislature reduced the limit to 150% of the FPL. It did so again earlier this year when a provision in PA 03-2, which became effective on April 1, 2003, lowered the limit to 100% of the FPL. This latest reduction has not been implemented as it is being challenged in federal court.

Table 1 lists the jurisdictions with Section 1931 Medicaid coverage that apply the same or higher income limits than Connecticut. It also indicates which of these states have asset tests and what they are.

Table 1. Jurisdictions with Section 1931 Coverage Comparable to or More Generous than Connecticut

Source: NCSL

SCHIP and Medicaid Section 1115 Waivers

Federal law allows states to expand eligibility for both Medicaid and SCHIP coverage using Section 1115 demonstration waivers for the purpose of conducting pilot, experimental, or demonstration projects that are “likely to promote the objectives” of the program. With the Medicaid waivers, states can get a 50% match for program expenditures. For SCHIP, the state can “draw down” from their SCHIP block grants 65% of any expenditures. For either type of waiver, any money spent on an expansion must be offset with a savings elsewhere.

Tables 2 and 3 list the states that offer subsidized health coverage to caretaker adults who do not receive cash assistance and allow income limits equal to or greater than Connecticut allows under Section 1931.

The states in Table 2 provide coverage using 1115 SCHIP waivers. As we mentioned above, once a state spends its SCHIP block grant allotment, no new additional federal funds are available. But in all four states, coverage reverts to Medicaid once the SCHIP allotments are spent.

This means that these adults would still get health care coverage but it would be paid with Medicaid instead of SCHIP funds. Table 3 shows those states that have used Section 1115 Medicaid waivers to offer health care coverage to caretaker adults.

For each state, we include income and benefit limits and cost sharing requirements.

Table 2. 1115 SCHIP Waiver States

Source: CMS

* Applies to parents and caretaker relatives.

1. State has just reduced the income limit to approximately 30% of the FPL for new enrollees.

Table 3. 1115 Medicaid Waiver States

Source: CMS

¹ This coverage is for uninsured custodial parents up to 100% of the FPL. Adults transitioning off cash welfare who are not otherwise insured or Medicaid-eligible can get coverage up to 300% of the FPL for up to two years. Uninsured non-custodial adults with incomes up to 125% of the FPL and actively paying child support can also get coverage.

RC: eh