The Influence of Federal Mandates on State Medicaid and AFDC Decision-Making

This article focuses on the influence of federal Medicaid mandateson state AFDC and Medicaid policy decision-making. The resultsconfirm certain concerns about federal mandates: the benefitsof federal Medicaid mandates (eligibility expansions to pregnantwomen and infants) appear to be offset by state reductions inAFDC and other Medicaid policy areas. In particular, federalMedicaid mandates had a negative effect on AFDC and MedicallyNeedy financial eligibility levels and Medicaid optional benefitcoverage—areas where states maintained discretionary power.A political-economic theory is used to test the impact of federalMedicaid mandates where a different political process is postulatedfor each policy dimension. The model is estimated using paneldata and a heteroskedastic, timewise autoregressive model.     

Medicaid in the 1990s: Trends, Innovations, and the Future of the "PAC-Man" of State Budgets

Rapidly escalating health-care inflation and congressionallymandated expansions have led to large increases in spendingfor Medicaid, the federal-state program of health care for thepoor. These increases came at a time when state budgets werealready under recession-induced stresses. In addition, 1991brought new pressures for Medicaid spending from the courtsand closer federal scrutiny and control over revenues used forthe program's state "match." Yet the Medicaid picture is farfrom bleak. Diversity, innovation, and an emerging stale policyrole also characterize the program in ways that epitomize thestrengths and weaknesses of the American intergovernmental system.     

Informal caregiving as state Medicaid expenditure: an only slightly immodest proposal

States and Medicaid recipients would be better off if the federal Medicaid program allowed states to assign a dollar value to some unpaid care friends and family give to Medicaid recipients. The dollar value of this unpaid labor would then be counted as state spending in the calculation of federal match. The proposal, which would ease the pressure on tight state budgets, is entirely compatible with the recent federal-state compromise regarding provider taxes and donations and reinforces an important but overlooked Medicaid policy that cultivates and relies upon households to deliver care.     

Medicaid matters: children's health and Medicaid eligibility expansions.

In the late 1980s, a series of federal laws were enacted which expanded Medicaid eligibility to more of the nation's children. States had a great amount of discretion in how fast and how far these expansions were implemented. As a result, there was great variation among the states in defining who was eligible for the program. This variation provides a rare opportunity to disentangle the effect of Medicaid from a child's socioeconomic status. Using data from the National Health Interview Survey, we address whether the Medicaid expansions improved the health and functional status of children. Econometric models were developed using fixed-effects regressions, and were estimated separately for white, black, and Hispanic children. White children experienced statistically significant reductions in acute health conditions and functional limitations. Black and Hispanic children showed some evidence of improved health conditions and functional status, but this evidence is inconclusive in the study sample. This may be due to differences in their access to appropriate health services or to the smaller sample size of minorities in each geographic area. The findings are also relevant to the implementation of the Children' Health Insurance Program (CHIP), the latest federal effort to expand access to health care to poor and near poor children. In many states, CHIP is being implemented in whole or in part through further Medicaid expansions.     

THE STATES' ROLE IN HEALTH CARE COST CONTAINMENT*

Under the Social Security Act of 1935, the federal government expanded its involvement in maternal and child health care programs through grants-in-aid to state and local health departments. The Medicaid legislation of 1965 vastly enlarged federal expenditures, and state responsibilities. State performance was frequently criticized, especially in health care cost containment. Recently, the states have initiated several efforts to link cost containment and the quality of health care.     

Has the Shift to Managed Care Reduced Medicaid Expenditures? Evidence from State and Local‐Level Mandates

From 1991 to 2009, the fraction of Medicaid recipients enrolled in HMOs and other forms of Medicaid managed care (MMC) increased from 11 percent to 71 percent. This increase was largely driven by state and local mandates that required most Medicaid recipients to enroll in an MMC plan. Theoretically, it is ambiguous whether the shift from fee‐for‐service into managed care would lead to an increase or a reduction in Medicaid spending. This paper investigates this effect using a data set on state‐ and local‐level MMC mandates and detailed data from the Centers for Medicare and Medicaid Services (CMS) on state Medicaid expenditures. The findings suggest that shifting Medicaid recipients from fee‐for‐service into MMC did not on average reduce Medicaid spending. If anything, our results suggest that the shift to MMC increased Medicaid spending and that this effect was especially present for risk‐based HMOs. However, the effects of the shift to MMC on Medicaid spending varied significantly across states as a function of the generosity of the state's baseline Medicaid provider reimbursement rates.     

The Federal Role in State Fiscal Stress

This article examines the extent to which the federal government'spolicies were responsible for the fiscal stress experiencedby most state governments in the early 1990s. Federal policieshave contributed considerably to recent state fiscal stress,particularly through the Medicaid program—the fastestgrowing part of state budgets—and the recession, whichdepressed revenue and increased welfare and Medicaid spending.Federal aid reductions have not been an important source ofrecent state fiscal stress. The real value of per capita federalaid other than for welfare programs fell considerably in the1980s, but the reductions were much greater for local governmentsthan for states. The largest reductions were in the early 1980s.Federal policies have affected state finances in several otherways—through tax policy, unfunded mandates, and the federalfailure to cope effectively with problems like health and poverty.Federal court rulings have also caused budget problems (as havestate court decisions). In some respects, state fiscal problemsare not a federal responsibility. Rising school enrollments,new corrections policies, and inelastic tax systems have createdfiscal stress for many states. Excessive state spending in the1980s has contributed to recent fiscal problems in some states,but not generally.     

Assessing medicaid managed care in eastern state

This case examined the expanding role of so-called managed care programs in improving health care for the poor while controlling runaway health care costs. The case asked what the commissioner of health, Dr. Lorna Hill, in a large eastern state should do to effectively monitor Medicaid managed care programs in her state. The commissioner faced intense pressures for cost containment and strong, but not universal, support for the managed care solution to health care cost problems. The commissioner was herself concerned that the cost savings attributed to managed care might not be real and the unintended effects on health care might be adverse. Her immediate challenge was to determine what kinds of data she should require service providers to submit to her agency so that she could effectively monitor managed care programs for health care quality, provide positive feedback to health care providers, and establish politically credible program oversight.     

Assessing Medicaid managed care in eastern state.

This case examines the expanding role of managed care programs in improving health care for the poor while controlling runaway health care costs. The case asks what the commissioner of health in a large eastern state should do to effectively monitor Medicaid managed care programs in her state. The commissioner faces intense pressures for cost containment and strong, but not universal, support for the managed care solution to health care cost problems. The commissioner is herself concerned that the cost savings attributed to managed care may not be real and that the unintended effects on health care may be adverse. Her immediate challenge is to determine what kinds of data she should require service providers to submit to her agency so that she may effectively monitor managed care programs for health care quality, provide positive feedback to health care providers, and establish politically credible program oversight.     

A Reevaluation of the Effects of State and ACA Dependent Coverage Mandates on Health Insurance Coverage

We study state and federal health insurance coverage mandates for young adults. Despite consistent findings that the Affordable Care Act's (ACA) federal mandate was effective, research has disagreed on whether preexisting, state-level mandates were successful in increasing coverage. We reconsider the issue with a new analytical perspective and newly available accurate data on state mandates. We show that the impact of the state mandates was substantive and concentrated among young adults between ages 19 and 23. Our estimates indicate that dependent coverage rose by 3.9 percentage points and overall coverage rose by 3.3 percentage points. Crowd-out of coverage through young adults’ own jobs was negligible. For those above 23, we find little evidence of changes in coverage. We incorporate these insights into analysis of the ACA's mandate, showing its effects were focused among those who were not eligible for state mandates, or were eligible but older than 23. Our results suggest that eligibility restrictions played important roles in limiting the scope of the state mandates, but they can be practical and effective tools for policymakers looking to ensure or expand coverage for young adults in the face of uncertainty about the ACA.     

Proposed: a comprehensive health care system for the poor.

More than half the poor are not covered by Medicaid, the program designed to serve them. Louise Russell outlines a program that would make health care available to all of the poor.     

Does the Federal Government Learn from the States? Medicaid and the Limits of Expertise in the Intergovernmental Lobby

State programmatic expertise is an important asset to federalsystems, but this expertise is not always informative to federaldecision-makers. I argue the degree to which state expertiseis informative to federal decision-makers depends on how wellthe policy interests of state and federal levels are aligned.I illustrate variation in these conditions using case studiesof congressional politics over the Medicaid program. I thenapply a statistical test, which demonstrates that states’programmatic expertise regarding Medicaid is less persuasiveto congressional committee members compared to other witnesseswho are equally knowledgeable. The results suggest a "failureof federalism," where the public good potential of state programmaticexpertise often is not realized in the federal system.     

Federal Reimbursement for Mandates on State and Local Governments

One of the remedies sought by state and local officials for the growing burden of federal mandates is a mandate reimbursement law. A major purpose of mandate reimbursement is to deter Congress from imposing excessive costs on state and local governments by making it fully accountable for its actions. The paper begins by extending the economic theory of grants to mandates and reimbursed mandates. It goes on to assess the benefits and costs of mandate reimbursement, and to distinguish mandates that should be reimbursed, should a reimbursement program prove desirable, from those that should not. Then, using the economic theory of grants and mandates, the paper compares reimbursed mandates with two alternatives for accomplishing the same objective, compensating grants and procedural rules. It concludes that the latter are more promising than mandate reimbursement.     

Intergovernmental Management: Federal Changes, State Responses, and New State Initiatives

This article surveys state responses and new state initiativesin 1983 to three sets of successive federal changes in domesticpolicy. Collectively referred to as the New Federalism, thesechanges include the block grants and accompanying regulatoryreforms of 1981, the changes in Medicaid reimbursement policyof 1982, and the job training and development programs of late1982 and early 1983. Following a brief overview of these changesin intergovernmental management perspective, state responsesin 1983 are examined in three areas—policy development,policy and program management, and service delivery management.     

State Tax Credits and "Making Work Pay" in Post-Welfare Reform Era

This article outlines the work incentives and income support provided by the federal Earned Income Tax Credit (EITC) and illustrates how state earned income and dependent care credits assist working poor families. State earned income and dependent care tax credits serve as critical complements to the EITC, the federal government's largest antipoverty program. By attending to specific components of each tax credit, state policymakers can maximize state funds that qualify for federal maintenance of effort requirements under the Personal Responsibility and Work Opportunity Reconciliation Act (PROWRA), and they can reinforce positive effects and offset work disincentives stemming from current federal tax parameters.     

Stigma and other determinants of participation in TANF and Medicaid.

We developed a conceptual framework to examine the association between stigma, enrollment barriers (e.g., difficult application), knowledge, state policy, and participation in the Temporary Assistance to Needy Families (TANF) and adult Medicaid programs. Survey data from 901 community health center patients, who were potential and actual participants in these programs, indicated that while images of the Medicaid program and its recipients were generally positive, stigma associated with welfare stereotypes reduced both TANF and Medicaid enrollment. Expectations of poor treatment when applying for Medicaid, enrollment barriers, and misinformation about program rules were also associated with reduced Medicaid enrollment. States that enacted strict welfare reform policies were potentially decreasing TANF participation, while states with more simplified and generous programs were potentially increasing Medicaid participation. The results suggest that the image of the adult Medicaid program remains tied to perceptions about welfare and provides guidance to policymakers about how to improve participation rates.     

The devil may be in the details: how the characteristics of SCHIP programs affect take-up.

In this paper, we explore whether the specific design of a state's program has contributed to its success in meeting two objectives of the Children's Health Insurance Program (SCHIP): increasing the health insurance coverage of children in lower income families and doing so with a minimum reduction in their private health insurance coverage (crowd-out). In our analysis, we use two years of Current Population Survey data, 2000 and 2001, matched with detailed data on state programs. We focus on two populations: the eligible population of children, broadly defined--those living in families with incomes below 300 percent of the federal poverty line (FPL)--and a narrower group of children, those who we estimate are eligible for Medicaid or SCHIP. Unique state program characteristics in the analysis include whether the state plan covers families; whether the state uses presumptive eligibility; the number of months without private coverage that are required for eligibility; whether there is an asset test; whether a face-to-face interview is required; and specific outreach activities. Our results provide evidence that state program characteristics are significant determinants of program success.     

State Fiscal Strategies for the 1990s: Balancing Budgets in a Recession

The fiscal crunch facing many states in FY 1991 has its rootsin the recession, federal mandates, election-year politics,and rapid growth in spending for Medicaid and corrections. Southernand midwestern states that made drastic cuts in response tothe 1981–1982 recession have fared relatively well, butstates in the Northeast have faced tax increases, layoffs, cutsin services, and prolonged conflict over state budgets. Althoughthe tax revolt has not led to appreciably lower taxes, it hasmade raising taxes more difficult, and has heralded a shiftto "boutique government," which may create further fiscal problemsin the long run. State tax increases and spending cutbacks mayalso delay recovery from the recession.     

Medicaid's Role in Moves Toward Universal Health Care

This paper considers the problems currently facing the Medical Assistance (Medicaid) program in light of the major problems confronting the American health care system. Actual and proposed Medicaid reforms are reviewed, their merits noted and their shortcomings detailed. It is argued that substantial Medicaid reform can take place only in the context of radical reform of the entire U.S. health care system. Similarly, Medicaid should be incorporated into any plan aimed at providing universal health care coverage.     

The Effects of Mandated Health Insurance Benefits for Autism on Out‐of‐Pocket Costs and Access to Treatment

As of 2014, 37 states have passed mandates requiring many private health insurance policies to cover diagnostic and treatment services for autism spectrum disorders (ASDs). We explore whether ASD mandates are associated with out‐of‐pocket costs, financial burden, and cost or insurance‐related problems with access to treatment among privately insured children with special health care needs (CSHCNs). We use difference‐in‐difference and difference‐in‐difference‐in‐difference approaches, comparing pre–post mandate changes in outcomes among CSHCN who have ASD versus CSHCN other than ASD. Data come from the 2005 to 2006 and the 2009 to 2010 waves of the National Survey of CSHCN. Based on the model used, our findings show no statistically significant association between state ASD mandates and caregivers’ reports about financial burden, access to care, and unmet need for services. However, we do find some evidence that ASD mandates may have beneficial effects in states in which greater percentages of privately insured individuals are subject to the mandates. We caution that we do not study the characteristics of ASD mandates in detail, and most ASD mandates have gone into effect very recently during our study period.