Medicaid for children: federal mandates, welfare reform, and policy backsliding

The 1996 federal welfare reform law delinked Medicaid enrollment from welfare participation. This paper estimates the impact of welfare reform on children's Medicaid enrollment using a methodology that both adjusts for income and other demographic differences over time and across states, and provides income-specific estimates of enrollment. The results indicate large enrollment declines: Between 1995 and 1998, enrollment probabilities for children in families with no income declined from 81 percent to 68 percent, while at half the poverty line, the decline was from 61 percent to 53 percent. This implies that 926,000 to 1.37 million fewer children were enrolled after welfare reform. At the state level, Medicaid declines and welfare reform were strongly associated, with only a few states succeeding in preserving children's Medicaid coverage.