Programmatic, Economic, and Demographic Forces Underlying Medicaid Enrollment Trends

Abstract

This article examines the enrollment effects of congressionally mandated Medicaid coverage during the late 1980s. Child-related mandates were found to increase noncash enrollments 37% in states without a medically needy program, while the 1990 Omnibus Budget Reconciliation Acts legislation added another 27%—mostly elderly poor. The evidence suggests states responded to the mandates, in part, by shifting cash welfare children and their families to Medicaid-only status. Without continued mandates, the shift to unrestricted Medicaid block grants will likely raise the number of uninsured (mostly children) 30% or more in nonmedically needy states versus 10% to 20% in other states. Federal Medicaid matching was found to be an inadequate incentive for states to extend health insurance coverage to all of their poor. Cyclic variation in state economies is also found to put the poor at risk of disenrollment given state laws requiring balanced budgets.