Medicaid eligibility expansion in Florida: effects on maternity care financing and the delivery system

In July 1989, the income limit on Medicaid eligibility for pregnant women in Florida was increased from 100% to 150% of the poverty level. This change may have led to substantial shifts in the financing of pregnancy-related care, and also may have had distinct effects on different providers in the health care delivery system.

Matched birth and death certificates, hospital discharge abstracts, Medicaid eligibility records and encounter records from county public health departments were used to estimate changes in the flows of funds and services by major payer groups during the period preceding the expansion (July 1988-June 1989) and for calendar year 1991. A total of 188,793 births in the first period and 193,292 in the second were examined.

The number of births financed annually by Medicaid in Florida increased by 47% following the eligibility expansion, from 47,400 in 1988-1989 to 69,600 in 1991. This increase stemmed largely from covered births to women who otherwise would have been uninsured. Seventy-three percent of the additional 22,200 deliveries funded through Medicaid in 1991 are attributed to women who were eligible as a result of the expansions. The additional prenatal care financed by Medicaid was delivered almost entirely by county public health departments, which increased their capacity by more than 100%, from 177,000 visits in 1988-1989 to 433,000 in 1991. Medicaid payments for maternity care increased 39%, from $135 million to $187 million, while payments made by the uninsured dropped by 29%. These changes resulted in a 5% rise in hospital revenues, despite little change in the number of admissions.

The Medicaid expansion benefited low-income pregnant women and hospitals in Florida. It is unknown whether the private delivery system would have accommodated the increased demand in the absence of the public health system response.