Children's Medicaid Enrollment: The Impacts of Mandates, Welfare Reform, and Policy Delinking

From 1984 to 1990, Congress enacted a series of mandates that expanded Medicaid eligibility for low-income children by gradually delinking Medicaid eligibility from welfare eligibility. The 1996 national welfare reform law nominally completed the delinking process when the statutory phase-in of children's Medicaid coverage was preserved even as the states were given increased flexibility for administering welfare programs. This article provides estimates of the impact of these federal policy changes on children's Medicaid enrollment rates and analyzes the degree of success in uncoupling children's Medicaid enrollment from welfare. Data from the Current Population Survey for 1979 to 1998 are used to provide standardized enrollment probabilities for the United States and individual states. The results show important enrollment increases associated with the period of the mandated expansions, followed by enrollment declines associated with welfare reform. The largest increases in enrollment during this period were in states with historically restrictive welfare eligibility, but rates also rose in states that previously had relatively expansive welfare eligibility. The net effect was a reduction in the extent of state-to-state variation in enrollment. The Medicaid expansion peaked in 1995, prior to the advent of national welfare reform. Since then, children's Medicaid enrollment has fallen, with the largest declines falling on families with the very lowest incomes. Consistent with the desire to delink children's Medicaid coverage from welfare, the association between Medicaid and AFDC/TANF enrollment weakened during the expansionary period, but there still was a relatively strong relationship between policy outcomes for these two programs. Despite the policy changes, Medicaid coverage of children is still influenced by state-level welfare policy.