How restrictive are Medicaid's categorical eligibility requirements? A look at nine Southern states

Medicaid, as an existing program with federal matching dollars, remains attractive to state legislatures looking for a means to address the problems of the uninsured. However, the extent to which states can maximize coverage of the poor uninsured under Medicaid's present eligibility criteria is unknown. Surprisingly, this study of nine Southern states shows a modest 14.8% reduction in the uninsured population when the AFDC income eligibility threshold is moved up to the federal poverty level. This threshold is twice as high as the national mean and three times greater than the mean income eligibility threshold for the nine states that were the focus of this study. In sharp contrast, elimination of the categorical eligibility requirements under the same poverty-level threshold reduces the uninsured population by nearly 40%.