USA Today Examines Effect of Welfare Reform on Medicaid Enrollment

USA Today on Tuesday examined the increase in Medicaid enrollment since 1997, a trend that "is an aftershock of welfare reform, which ... has pushed individuals off welfare and into the work force." In the past, Medicaid had "gone primarily to welfare recipients," but lawmakers had to extend the program to low-income working families as former welfare recipients found low-wage jobs, USA Today reports. According to USA Today, the number of Medicaid beneficiaries increased from 34 million in 1999 to 47 million in 2004, and program expenditures increased from $159 billion in 1997 to $295 billion in 2004. As a result of the increase in Medicaid enrollment, the rate of uninsured children decreased from 14.8% in 1997 to 11.7% in 2004. In addition, USA Today reports that many "low-income workers are choosing Medicaid over employer insurance because it is less expensive and often covers more." John Begala of the Ohio Commission to Reform Medicaid called the increase in Medicaid enrollment "one of the great policy success stories of the decade." However, opponents maintain that the increase in Medicaid enrollment has contributed to the federal budget deficit. Michael Cannon, director of health care studies at the Cato Institute, said, "Shame on us for creating perverse incentives that cause people to give up private coverage for Medicaid" (Cauchon [1], USA Today, 8/2).

USA Today on Tuesday also examined the effect of welfare reform on Medicaid enrollment in Washington County, Ohio -- "a relatively poor area" on the Ohio River where the increase in the number of beneficiaries is "startling." Since 1997, the number of families in the county that receive welfare benefits has decreased from 427 to three, and the number of Medicaid beneficiaries has increased from 4,020 to 7,316. According to USA Today, the decrease in welfare recipients and increase in Medicaid beneficiaries has occurred nationwide "mostly in poor and working-class neighborhoods," such as Washington County, and "out of view of the affluent and well-insured." Michael Paxton, director of the county welfare program, said, "People who left welfare went into jobs paying $5.15 to $7.15 an hour. Medicaid and food stamps and children care assistance make it possible for people to work at low wages" (Cauchon [2], USA Today, 8/2).