Hundreds of thousands of uninsured low-income parents in New York could gain health care coverage if the state takes advantage of a little-known legislative opportunity. According to a report released today by The Commonwealth Fund, the state could make use of a provision in the 1996 federal welfare reform bill—the Personal Responsibility and Work Opportunities Reconciliation Act—that gave states broad flexibility to determine what counts as income when determining Medicaid eligibility. The federal government would bear half the expansion costs if the state chose to expand public insurance by changing eligibility rules. The Fund report, A New Opportunity to Provide Health Care Coverage for New York's Low-Income Families, by Jocelyn Guyer and Cindy Mann of The Center on Budget and Policy Priorities in Washington, D.C., finds that New York could make a substantial dent in the number of uninsured working adults by expanding its definition of who qualifies for subsidized health care insurance. "This option could be important for parents working in low-wage jobs who are struggling to make ends meet and raise their families," said Karen Davis, president of The Commonwealth Fund. "Access to health insurance is an important step up the ladder to economic independence for parents like these." About 424,000 parents living in New York are uninsured and have incomes at or below 200 percent of the poverty level, which is approximately $27,600 for a family of three. Although six of seven of these parents or their spouses are working, their jobs rarely offer affordable health coverage; for the most part, these low-income families are ineligible for Medicaid under current state law. An employed low-income parent in New York is two and a half times more likely to be uninsured than an unemployed low-income parent. One of three (35%) low-income working parents in New York is uninsured, whereas one of seven (14%) low-income unemployed parents is uninsured. Under current state rules, if the father in a family of three earns the minimum wage and the mother cares for the child, for example, the family is generally ineligible for Medicaid—even if the father's employer does not offer coverage. New York does, however, offer publicly funded state insurance to children in families with incomes up to 230 percent of poverty. "New York has already expanded health insurance coverage for low-income children. An obvious next step is to do the same for their parents," said Jocelyn Guyer, lead author of the Fund report. "Doing so would help reverse the alarming increase in New York's uninsured population and provide much-needed support to its working families." The report describes a "family coverage category" provision in the 1996 welfare reform bill that allows states to expand coverage to families at whatever income and resource levels the states deem appropriate. This little-recognized 1996 provision was brought back to public attention in March 1999 by the Health Care Financing Administration's report, Supporting Families in Transition: A Guide to Expanding Health Coverage in the Post-Welfare Reform World.
Under different expansion strategies, New York could offer coverage to uninsured working parents with incomes up to 250 percent of the poverty level, which would insure approximately 335,000 parents; or up to 185 percent poverty, which would insure 242,000 parents. Even if the state offered coverage only to those living at 133 percent of poverty, it would cover 130,000 working parents. Connecticut, the District of Columbia, Rhode Island, and Wisconsin have already taken advantage of the family coverage category option to loosen Medicaid eligibility rules: they have raised limits to 185 percent, and, in some cases, to 200 percent of the federal poverty level. Other states, such as Ohio, Oklahoma, and Pennsylvania, provide an alternative example of how the federal option can be used: all these states have eliminated asset tests for low-income working parents. The report notes that the number of uninsured New Yorkers is likely to continue growing unless the state makes publicly funded coverage available to low-wage parents. "Time limits on welfare benefits are encouraging more low-income parents to enter the labor market, but their jobs often come without affordable health insurance," said David Sandman, the Fund's program officer for the Health Care in New York City Program. "This incremental option could be an important piece of the puzzle in solving the state's uninsured problem. It could also bolster the state's efforts to help parents move into the workforce."