Implications of the Balanced Budget Act of 1997 for the "Devolution Revolution"

From an economist's perspective, the fiscal and administrativegoals of the so-called "devolution revolution" include lessfederal intergovernmental aid, especially if fiscally equalizing;the substitution of block grants for matching grants; greateradministrative flexibility for the states; and fewer underfundedmandates. This article uses these devolulionary yardsticks toanalyze the major provisions of the federal Balanced BudgetAct of 1997. These provisions fall far short of a "devolutionrevolution." The act increases the level of federal assistance,leaves Medicaid as an open-ended entitlement, and preservesa strong role for the federal government in shaping intergovernmentalgrants. The article discusses the political forces moderatingthe act's devolutionary impact.     

The Medicaid Mandates of the 1980s: An Intergovernmental Perspective

Medicaid, the health care program for the poor, has undergone significant changes in the last fifteen years. Many of those changes relate to the intergovernmental nature of the program. Medicaid is jointly operated, with the federal and state governments sharing program costs. Despite a set of program guidelines dictated by the federal government, states have traditionally had substantial latitude in Medicaid decisions. However, a series of developments in the 1980s led to increasing constraints on state Medicaid discretion, including federal mandates to expand Medicaid coverage. This article examines the inception and effectiveness of the Medicaid mandates from the perspective of interstate equity of health care services for poor families.     

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.     

Medicaid Spending Dynamics: Implications for Cost Control Strategies

Because of the Medicaid program's high cost and rapid growth, state governments see it as an attractive target for cost-control strategies. The usual ways that budgeters contain spending do not work well on the Medicaid program. Cutting the Medicaid budget is likely to have unintended consequences for state revenues and spending. States can best cope with Medicaid's cost by developing a system-wide strategy of meeting their citizens' health and human-service needs.     

Administrative Easing: Rule Reduction and Medicaid Enrollment

Administrative burden is widely recognized as a barrier to program enrollment, denying legal entitlements to many potentially eligible individuals. Building on recent research in behavioral public administration, this article examines the effect of voluntary state reductions in administrative burden (administrative easing) on Medicaid enrollment rates using differential implementation of the Affordable Care Act. Using a novel data set that includes state-level data on simplified enrollment and renewal procedures for Medicaid from 2008 to 2017, the authors examine how change in Medicaid enrollment is conditioned by the adoption of rule-reduction procedures. Findings show that reductions in the administrative burden required to sign up for Medicaid were associated with increased enrollments. Real-time eligibility and reductions in enrollment burden were particularly impactful at increasing enrollment for both children and adults separate from increases in Medicaid income eligibility thresholds. The results suggest that efforts to ease the cognitive burden of enrolling in entitlement programs can improve take-up.     

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 costs and birth outcomes: the effects of prenatal WIC participation and the use of prenatal care.

This study examines the effects of prenatal WIC participation and the use of prenatal care on Medicaid costs and birth outcomes in five states--Florida, Minnesota, North Carolina, South Carolina, and Texas. The study period is 1987 for Florida, Minnesota, North Carolina, and South Carolina and January-June 1988 for Texas. Prenatal WIC participation was associated with substantial savings in Medicaid costs during the first 60 days after birth, with estimates ranging from $277 in Minnesota to $598 in North Carolina. For every dollar spent on the prenatal WIC program, the associated savings in Medicaid costs during the first 60 days ranged from $1.77 to $3.13 across the five states. Receiving inadequate levels of prenatal care was associated with increases in Medicaid costs ranging from $210 in Florida to $1,184 in Minnesota. Prenatal WIC participation was associated with higher newborn birthweight, while receiving inadequate prenatal care was associated with lower birthweight.     

Early Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non‐Expansion States

The Affordable Care Act (ACA) aimed to achieve nearly universal health insurance coverage in the United States through a combination of insurance market reforms, mandates, subsidies, health insurance exchanges, and Medicaid expansions, most of which took effect in 2014. This paper estimates the causal effects of the ACA on health insurance coverage in 2014 using data from the American Community Survey. We utilize difference‐in‐difference‐in‐differences models that exploit cross‐sectional variation in the intensity of treatment arising from state participation in the Medicaid expansion and local area pre‐ACA uninsured rates. This strategy allows us to identify the effects of the ACA in both Medicaid expansion and non‐expansion states. Our preferred specification suggests that, at the average pre‐treatment uninsured rate, the full ACA increased the proportion of residents with insurance by 5.9 percentage points compared to 2.8 percentage points in states that did not expand Medicaid. Private insurance expansions from the ACA were due to increases in both employer‐provided and non‐group coverage. The coverage gains from the full ACA were largest for those without a college degree, non‐whites, young adults, unmarried individuals, and those without children in the home. We find no evidence that the Medicaid expansion crowded out private coverage.     

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.     

Interstate Spillovers,Fiscal Decentralization,and Public Spending on Medicaid Home‐ and Community‐Based Services

This article examines the interstate spillover effect of Medicaid expenditures for home‐ and community‐based services (HCBS) and tests the relationship between fiscal decentralization and public spending. Based on the theory of interstate strategic interaction, an empirical model is specified that explicitly accounts for interdependence in states’ spending decisions. The model is estimated by applying spatial econometric methods to panel data for the 50 U.S. states for 2000–2010. Findings show a positive interdependence in state HCBS expenditures that is contingent on similarity in citizen ideology between states. Fiscal decentralization, measured by transfer dependence and revenue autonomy, is positively related to Medicaid HCBS spending.     

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.     

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.     

Medicaid,the States and Health Care Reform

Health care reform in the US is relying extensively on Medicaid for achieving universal health coverage. This article addresses the question of whether Medicaid is an appropriate foundation for reducing the ranks of the uninsured, given its dependence on economic conditions and the vulnerability of state budgets, along with the ever-changing preferences of governors and legislators. This article assesses the effects of the ebb and flow of Medicaid policy-making on at‐risk populations and what this implies for the Affordable Care Act. By establishing a nationwide income floor at 133% of the Federal Poverty Level, the legislation eliminates eligibility inequities across the states. However, it is argued that when state budgets are strained, as they undoubtedly will be when the reform bill is fully implemented, local officials will downsize benefit packages, raise co-payments, mandate more managed care, and reduce provider payments, negatively affecting the availability, scope, and quality of services.     

Federalism by Waiver: MEDICAID and the Transformation of Long-term Care

In recent years, many states in the U.S. have substantiallyreinvented their Medicaid programs through the unprecedenteduse of federal waivers. This article focuses on 1915c programwaivers, which gave states the opportunity to overcome Medicaid'sinstitutional bias by offering more home and community-basedservices. The use of this tool has fueled deinstitutionalizationand other program changes. It reflects the rise of executivefederalism—the growing tendency for major program decisionsto shift from the legislative arena to the executive branchof the national and state governments. By functioning as licenses,the 1915c waivers take devolution via the administrative processto new levels. The proliferation of these waivers suggests aneed to revise prior conceptions of federal–state relations,such as picket fence federalism.     

Welcome Mats and On‐Ramps for Older Adults: The Impact of the Affordable Care Act's Medicaid Expansions on Dual Enrollment in Medicare and Medicaid

For many low‐income Medicare beneficiaries, Medicaid provides important supplemental insurance that covers out‐of‐pocket costs and additional benefits. We examine whether Medicaid participation by low‐income adults age 65 and up increased as a result of Medicaid expansions to working‐age adults under the Affordable Care Act (ACA). Previous literature documents so‐called “welcome mat” effects in other populations but has not explicitly studied older persons dually eligible for Medicare and Medicaid. We extend this literature by estimating models of Medicaid participation among persons age 65 and up using American Community Survey data from 2010 to 2017 and state variation in ACA Medicaid expansions. We find that Medicaid expansions to working‐age adults increased Medicaid participation among low‐income older adults by 1.8 percentage points (4.4 percent). We also find evidence of an “on‐ramp” effect; that is, low‐income Medicare beneficiaries residing in expansion states who were young enough to gain coverage under the 2014 ACA Medicaid expansions before aging into Medicare were 4 percentage points (9.5 percent) more likely to have dual Medicaid coverage relative to similar individuals who either turned 65 before the 2014 expansions or resided in non‐expansion states. This on‐ramp effect is an important mechanism behind welcome mat effects among some older adults.     

When is Growth Not Growth? The Curious Case of Mental Health Budgeting in New York

This article argues that the adverse impact of Medicaid on state budgets alleged in various public debates has been overstated, in some measure because of the inaccurate and misleading manner in which Medicaid expenditures are appropriated in state budgeting systems. Data on Medicaid and mental health spending in the state of New York is used for analysis. The first section provides a Medicaid spending and budgeting background. The second section discusses Medicaid and mental health in New York. The third section describes actual budgeted spending for mental health in New York, and the final section provides a discussion and concluding comments.     

Privatizing Public Nursing Homes: Examining the Effects on Quality and Access

This study examines the effects of local government divestment on quality and access to care for Medicaid recipients in privatized nursing homes. The central hypotheses are concerned with the impact of new ownership on both aspects of organizational performance. The analysis indicates that privatization of nursing homes involves a complex set of trade-offs. Changing organizational ownership to for-profit increases the number of regulatory violations, decreases residents' quality of life, but does not influence Medicaid admissions. While no decline in quality is found among divested nonprofit facilities, access to care declines in the comparison groups of nonprofit homes. The author concludes that as counties minimize their roles as service producers, federal, state and local governments should enhance their regulatory capacity by improving quality assurance mechanisms and providing adequate reimbursement for low-income clients.     

Demographic,Employment, Expenditure,and Income‐Related Dependency Ratios: Population Aging in the Fifty States

Old‐age dependency ratios (OADR) are frequently used to measure the economic impact of U.S. population aging. However, at the state level youth‐dependence, and the “birth dearth,” are important. While federal expenditures on elder Social Security, Medicare, and Medicaid are large, state expenditures on dependent youth are much higher than on elders. The states are ranked by the OADR and three other dependency ratios that consider youth and a state's employment, fiscal outlay, and per‐capita income. Very different rankings are found. States with higher OADR ratios had lower total dependency expenditures. Projections for 2030 are compared with 2000 results.     

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.     

Local Government and Strategies for Decentralization in the "State of the Autonomies"

The convergent forces of democratization, decentralization,the welfare state, and international integration have made Spanishlocal governments similar to their equivalents in other partsof Europe. Nevertheless, local governments are the most poorlydefined part of the post-Franco puzzle of reform. This articletraces the history and development of Spanish local governmentwithin the emerging state of the autonomies, and examines theirambivalent position and uncertain future. Despite the greatertransformative emphasis on building federal arrangements throughthe autonomous communities, local governments play importantroles in establishing self-rule and shared rule.