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What Counts?

Determining Medicaid and CHIP Eligibility for Children

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Document date: June 01, 1999
Released online: June 01, 1999

Assessing the New Federalism is a multiyear Urban Institute project designed to analyze the devolution of responsibility for social programs from the federal government to the states, focusing primarily on health care, income security, employment and training programs, and social services. Alan Weil is the project director. Researchers monitor program changes and fiscal developments. In collaboration with Child Trends, the project studies changes in family well-being. The project aims to provide timely, nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively.

Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District of Columbia, available at the Urban Institute's Web site. This paper is one in a series of discussion papers analyzing information from these and other sources.

The project has received funding from the Annie E. Casey Foundation, the W.K. Kellogg Foundation, the Robert Wood Johnson Foundation, the Henry J. Kaiser Family Foundation, the Ford Foundation, the John D. and Catherine T. MacArthur Foundation, the Charles Stewart Mott Foundation, the David and Lucile Packard Foundation, the McKnight Foundation, the Commonwealth Fund, the Stuart Foundation, the Weingart Foundation, the Fund for New Jersey, the Lynde and Harry Bradley Foundation, the Joyce Foundation, and the Rockerfeller Foundation.

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

Note: This report is available in its entirety in the PDF format, which many users find more convenient when printing.


What Counts? Determining Medicaid and CHIP Eligibility For Children
What Are the Major Medicaid and CHIP Eligibility Groups?
What Are the Poverty-Related Standards for Pregnant Women and Children?
Medicaid Disregards: What Does Not Count?
Specific Disregards Used
Asset Tests in Medicaid
What About CHIP?
What Are States' Options in Establishing Disregard Policies?
About the Authors

What Counts? Determining Medicaid and CHIP Eligibility For Children

For over a decade, states and the federal government have collaborated to expand Medicaid coverage for low-income uninsured children, most recently including the State Children's Health Insurance Program (CHIP). The cumulative effect of these policies has brought Medicaid coverage to millions of children beyond Medicaid's traditional clientele of welfare families. In general, these expansions are "poverty related" and depend on children's family incomes falling below some percentage (such as 100 or 185 percent) of the federal poverty level. The recent reductions of welfare caseloads and initiation of CHIP have made poverty-related expansions more important than ever.

Basing eligibility on a percentage of poverty is easy to understand, applies to children in two- or one-parent families, and adjusts automatically for inflation each year. However, the actual poverty-related eligibility criteria are usually more complicated than they might seem. States have discretion in how to count income, particularly about what types or levels of income or expenses should be "disregarded" (subtracted from gross income to compute net income, which is then compared to the poverty standards). Moreover, some states also limit the amount of assets (e.g., savings or the value of cars) that participating families may have, although most do not. These seemingly minor differences mean that a child might be declared eligible in one state, but not another, even if both states use 100 percent of poverty as the maximum income level.

In this report, we try to peer inside the black box of Medicaid eligibility determination and describe some of the gears in the mechanism. We not only describe state policies about Medicaid and CHIP eligibility of poverty-related children and pregnant women, but also explore how states compute income, including disregard policies.1 In addition to affecting who is actually eligible, disregard and asset policies are operationally important since they affect the complexity of the application process.

First, we review key Medicaid eligibility rules for children. Then, we summarize the Medicaid poverty standards used by the states in 1998, the income disregards, and the asset tests. Next, we present information about CHIP programs that are separate from Medicaid. In the final sections, we discuss the policy options that are available to states.

See the PDF for complete report.


1. To collect information about Medicaid income disregards and assets, the Urban Institute conducted a brief survey of Medicaid and CHIP agencies in all 50 states and the District of Columbia, using a combination of phone and fax communications. We asked about policies in effect in July 1996, October 1997, and October 1998. In this report, we only present data about October 1998. We asked states to include data that pertained to poverty-related Medicaid or CHIP eligibility. Tables equivalent to tables 1, 2, and 4 for July 1996 and October 1997 are not in this report but are available from the authors. There were small changes in policies over the three years.

Topics/Tags: | Children and Youth | Health/Healthcare

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