Family Coverage: Covering Parents Along with Their Children
Legislative Authority
Eligibility
States have the option under federal Medicaid law to expand coverage for parents above federal minimum standards. It is particularly important for states to exercise this option because the federal Medicaid minimum coverage requirements for parents are much lower than for children.
- Children: At a minimum, states must cover children in Medicaid with incomes below 100 percent of the FPL for children age six and over and below 133 percent of the FPL for children under age six.
- Parents: The federal minimum eligibility level for parents is tied to each state’s 1996 eligibility levels in the former cash assistance program, Aid to Families with Dependent Children (now known as TANF). In almost every state, this minimum eligibility level is well below the federal poverty level. In some states, it is below 20 percent of the federal poverty level.
States have the legal authority to expand eligibility for parents above these minimum requirements.
- Under a federal option, states can raise their income eligibility levels for parents to whatever level they choose.1 There is no cap on the eligibility levels states can adopt, as long as states are able to provide the matching funds. Some states that have expanded eligibility for parents have adopted the same income level for parents and children, while others have not gone quite as high for parents as they have for children. For example, as of January 2008, Arizona and Maine cover parents and children up to 200 percent of the FPL, while Connecticut covers parents up to 185 percent of the FPL and children up to 300 percent of the FPL.
- Some states have used waivers instead of the regular legislative option to expand coverage for parents. In general, states that have relied on waivers have done so either because they wanted to narrow the scope of eligibility (for example to just cover parents whose employers contribute toward the cost of coverage) or because they wanted to use some of their federal SCHIP funds to cover parents. SCHIP funds normally cannot be used to cover parents but under the Clinton and Bush administrations some states were granted waivers to cover parents with SCHIP funds at the more advantageous “enhanced” matching rate.2 However, in August 2007, the Secretary of Health and Human Services announced that he would no longer approve or renew SCHIP parent waivers.3 As parent waivers come up for renewal, funding for coverage is generally moved from SCHIP to Medicaid.
Benefits
Federal Medicaid law accords states more discretion in designing the benefit package for adults as compared to children. Under the basic federal benefit rules governing adult coverage, states must cover certain “mandatory” benefits while other benefits are “optional.” Once a state decides to cover a benefit, it must assure that the scope of coverage is sufficient to meet minimum federal standards.4 Federal Early Periodic Screening Diagnostic and Treatment (EPSDT) requirements, which require that states cover regular preventive screening and all medically necessary services, apply only to children.
New federal rules adopted as part of the federal Deficit Reduction Act of 2005 (DRA) further expanded state flexibility to design benefit packages for adults, allowing states to adopt what are referred to in the law as “benchmark” benefit packages.5 In general, these benchmarks are similar to the benchmarks that apply in separate SCHIP programs. It is important to note, however, that the adults covered under Medicaid expansions generally have much lower incomes than the children covered through SCHIP. Parents with income this low have little ability to afford care that is not covered as part of the benefit plan. The DRA also gives states the authority to design different benefit plans for different groups of adults.
Cost sharing
As is true for benefits, states have greater flexibility to charge parents premiums and cost sharing than they do for children, although recent changes adopted in the DRA have narrowed the differences somewhat. (See a discussion of the children and parent cost sharing rules.)
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Strategies and Considerations
Footnotes
1. The family coverage option that allows states to expand coverage to parents above federal minimum standards is found at section 1931 of Title XIX of the Social Security Act; see also M. Birnbaum, “
Expanding Coverage to Parents Through Medicaid Section 1931,” State Coverage Initiatives (May 2000).
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2. S. Artiga & C. Mann, “
Family Coverage Under SCHIP Waviers”, Kaiser Commission on Medicaid and the Uninsured (May 2007); and Government Accountability Office, “
State Children’s Health Insurance Program: Program Structure, Enrollment and Expenditure Experiences, and Outreach Approaches for States that Cover Adults,” (November 2007).
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3. See
letter from Secretary Michael O. Leavitt, Department of Health and Human Services, to Senator Chuck Grassley, Ranking Member of the Finance Committee (July 31, 2007).
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4. See Kaiser Family Foundation,
The Medicaid Resource Book (July 2002).
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5. 72 Fed. Reg. Number 36 (February 22, 2008). See also Centers for Medicare and Medicaid Services, “
Deficit Reduction Act;” J. Guyer, C. Mann, & J. Alker, “
The Deficit Reduction Act: A Review of Key Medicaid Provisions Affecting Children and Families,” Center for Children and Families (March 2006); and Kaiser Commission on Medicaid and the Uninsured, “
Deficit Reduction Act of 2005: Implications for Medicaid,” (February 2006).
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