million women and children in 1980 to a $2.1 billion program that serves
an estimated 4.5 million women and children in 1990.

Since both the WIC and Medicaid programs serve low-income pregnant
women, an important issue is the extent to which prenatal participation
in the WIC program affects the subsequent health-care costs of Medicaid-
eligible women and their newborns. In particular, if WIC participation
during pregnancy improves pregnancy outcomes, then lower Medicaid
expenditures and state indigent care expenditures in the neonatal period
and later in life may offset the costs of the WIC program. To examine
this issue further, Congress directed the Secretary of Agriculture in 1987
to undertake a study to assess the savings in Medicaid and state indigent
care costs for women and their newborns during the first 60 days after
birth that are due to the mother’s prenatal participation in the WIC
program. This report presents the findings of this study.

B. THE OBJECTIVES OF THIS STUDY

As mandated, the primary objective of this study is to determine the
extent to which the participation of pregnant women in the WIC program
affects Medicaid and indigent care costs from birth to 60 days after birth.
The study entailed analyses of the relationship between Medicaid costs
and WIC participation in each of five states—Florida, Minnesota, North
Carolina, South Carolina, and Texas. A secondary objective of this study
is to examine the effects of prenatal WIC participation on birth outcomes,
including birthweight and gestational age. This analysis of birth outcomes
is important for two reasons. First, savings in Medicaid costs can be
interpreted within the context of the effects of WIC participation on birth
outcomes. Second, WIC participation may have effects on birth outcomes
that may not adequately be reflected by the estimated savings in Medicaid
costs. That is, to the extent that WIC participation improves birth
outcomes by drawing individuals into the health care system, this increased
demand for health care may at least partially offset any savings in
Medicaid costs due to better birth outcomes.

1As discussed in Chapter II of this volume, examining state indigent care
costs was not feasible in this study.

2


uncompensated hospital care within the context of this study. In order to
be applicable to this study on the cost-effectiveness of the WIC program,
a health care service or reimbursement program must have had data files
on individuals that could be linked to WIC program records.

A second reason for omitting indigent care costs from the analysis is that
many programs which serve low-income pregnant women provide only
prenatal care to participants, and do not cover labor and delivery costs.
Thus, even for those programs for which individual-level program data
systems are maintained at the state level, information is not available on
the primary outcome variable for the analysis—-indigent care costs for labor
and delivery and during the 60-day period after birth.

A third reason for omitting state indigent care costs from the study is that
some of the state programs that provide financial assistance at and after
birth exist precisely because of problems related to the pregnancy and
birth. For example, in many states, Programs for Children with Special
Health Needs reimburse providers for services rendered to children born
with serious health needs. Thus, in order to be a participant in such a
program, the newborn is by definition a high-cost birth, and it is of little
interest to examine the effects of the WIC program on program costs. If
any analysis of such programs were to be undertaken, it would likely focus
on the effect of the WIC program on the likelihood of receiving any
benefits at all, rather than on the costs received once in the program.

19


DESCRIPTION
OF THE STUDY
STATES

THE SAVINGS IN MEDICAID COSTS
FOR NEWBORNS AND THEIR MOTHERS
FROM PRENATAL PARTICIPATION IN THE WIC PROGRAM

EXECUTIVE SUMMARY

This study is mandated by the Commodity Distribution Reform Act and
WIC Amendments of 1987 (Public Law 100-237) and the Joint Resolution
Continuing Appropriation for Fiscal Year 1988 (Public Law 100-202). Its
primary objective is to determine the savings in Medicaid costs for
newborns and their mothers during the first 60 days after birth from
participating in the Special Supplemental Food Program for Women,
Infants, and Children (WIC) during pregnancy. The prenatal component
of the WIC program provides food supplementation, nutrition education,
and health-care and social services referrals to low-income pregnant
women, the primary goal of which is to improve their nutritional status.
To the extent that improved nutritional status leads to more favorable
birth outcomes, then lower Medicaid expenditures and indigent care costs
after birth may offset the costs of providing prenatal WIC benefits.

‘A secondary objective of this study is to examine the effects of prenatal
participation in the WIC program on two important birth outcomes--
birthweight and gestational age. This analysis complements the analysis
of Medicaid costs, in that the savings in Medicaid costs can be interpreted
within the context of the effects of WIC participation on birth outcomes.

Specifically, the analysis conducted for this study addressed the following
questions:

@ What are the savings in Medicaid costs for newborns and their mothers
during the first 60 days after birth from participating in the WIC
program during pregnancy?

© Are the savings in Medicaid costs that are due to prenatal WIC
participation greater or less than the costs of providing WIC benefits
to pregnant women?

Does prenatal WIC participation affect such birth outcomes as
birthweight and gestational age?

The study entailed analyses of the relationship between Medicaid costs
and prenatal WIC participation in each of five states--Florida, Minnesota,
North Carolina, South Carolina, and Texas. The study period included all
Medicaid births in 1987 for Florida, Minnesota, North Carolina, and South
Carolina and all Medicaid births from January through June 1988 in
Texas. These five states accounted for nearly 105,000 Medicaid births.
The proportion of these births to WIC participants varied considerably
across the study states, ranging from nearly one-half of the Medicaid

ix




LIST OF TABLES

Page
BIRTH OUTCOMES AND PERINATAL RISK FACTORS: U.S. J
AND STUDY STATES .......0 00. e cece eee neers 9
THE CHARACTERISTICS OF THE WIC PROGRAM IN THE
STUDY STATES ....... 00. c cece eee eee tenet nes 14
NUMBER OF MEDICAID MOTHERS AND NEWBORNS ........- 27
DESCRIPTIVE DATA ON MEDICAID BIRTHS: NUMBER OF
BIRTHS, AVERAGE MEDICAID COSTS, AND BIRTHWEIGHT .... 28
DEMOGRAPHIC CHARACTERISTICS OF MEDICAID
MOTHERS ........- cece cece centre ener eee e ene etarees 31
PRENATAL CARE CHARACTERISTICS OF MEDICAID
MOTHERS ........ 000 e cece eee e nee eee etree eter nnee 34

SAVINGS IN MEDICAID COSTS FROM BIRTH TO 60 DAYS
AFTER BIRTH ASSOCIATED WITH PRENATAL PARTICIPATION
IN THE WIC PROGRAM ...... 2. ee eect terete rete teeeee 43

ESTIMATED BENEFIT-COST RATIOS ......-.----eee eerie 45
SAVINGS IN MEDICAID COSTS FROM BIRTH TO 60

DAYS AFTER BIRTH: EFFECTS OF PRENATAL WIC
PARTICIPATION AND THE ADEQUACY OF PRENATAL

CARE 2... cece ccc cc tee eet ee etees 47

ESTIMATED EFFECTS OF WIC PARTICIPATION ON BIRTH-
WEIGHT AND GESTATIONAL AGE ...... 6. - esse cece eee eee 50

iti



end of the time period for this study. Thus, for most of 1987, pregnant
women and children were potentially eligible for Medicaid in one of the
following three groups:

e AFDC recipients who were “categorically” eligible for Medicaid
because they received cash assistance under the Aid to Families with
Dependent Children Program. In addition, some former AFDC
recipients who became ineligible for AFDC payments remained
eligible for Medicaid.

© Pregnant women and children who resided in households which met
the income and resource requirements of AFDC eligibility, but who
were not eligible for AFDC because the state did not provide AFDC
benefits to pregnant women without other children (AFDC coverage
which is at the state’s option) or the child did not meet the definition
of “dependent” (that is, both parents were in the home). Women
were eligible from the point at which pregnancy was medically
established, and birth-related services were covered through 60 days
postpartum. Newborn children were covered for one year, provided
that the mother was eligible for and receiving Medicaid at birth, and
provided that the mother remained eligible and the child resided with
the mother.

© Medically needy individuals in families with children whose income
and/or resources were above the limits established for AFDC eligibility
but still needed medical assistance in the state’s view. The state set
income limits for the medically needy program that did not exceed 133
and 1/3 percent of the benefits paid to an AFDC case with no other
income. A medically needy program was provided at the state’s
option; however, if the state had a medically needy program, it had to
serve pregnant women and children, as defined above. All states in
the study except South Carolina had a medically needy program in
1987,

In October 1987, Florida, North Carolina, and South Carolina
implemented Medicaid coverage of women and infants in families whose
incomes were up to 100 percent of poverty; in September 1988, Texas did
also. In July 1987, Minnesota raised the Medicaid income threshold for
its medically needy program to 88 percent of poverty; in October 1988, it
raised its Medicaid income levels for pregnant women to 185 percent of
poverty.

17



Specifically, the analysis addressed the following questions:

@ What are the savings in Medicaid costs for mothers and their
newborns from birth to 60 days after birth due to the mothers’
Participation in the WIC program during their prenatal period?

© Are the savings in Medicaid costs that are due to prenatal WIC
participation greater or less than the costs incurred by the WIC
Program to provide its services, including the costs of nutrition
supplementation, administration, and nutrition education?

© Does prenatal WIC participation by Medicaid recipients affect such
birth outcomes as birthweight and gestational age?

C. BASIC STUDY DESIGN

The analysis of the effects of prenatal WIC participation on Medicaid
costs from birth to 60 days after birth included three key components:

1. Combining information on Medicaid costs, WIC participation and
costs, and birth outcomes for each of the study states

2. Assessing the savings in Medicaid costs by comparing Medicaid costs
for WIC participants with the Medicaid costs for nonparticipants
based on statistical analysis to adjust for differences in costs
attributable to other factors

3. Interpreting the study findings and their implications for the states not
included in the study and for recent changes in the WIC and Medicaid
Programs and target populations

The first component pertains to the data used in the analysis. In each of
the five study states, the database for the analysis was constructed from
three separate state data files: (1) Medicaid files, which provided
Medicaid cost and eligibility data on newborns and their mothers; (2) Vital
Records files (birth, infant death, and fetal death files), which provided
data on maternal characteristics, birthweight and other newborn
characteristics, prenatal care, and infant and fetal deaths; and (3) WIC
Program files, from which the Medicaid mothers were identified as either


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D. ORGANIZATION OF THIS REPORT

This volume includes five chapters and two appendices. Chapter II
provides background information on the states included in the study and
on the WIC and Medicaid programs in those states. Chapter III describes
the data used in the analysis and presents descriptive data on the
Medicaid births in each of the study states. The main analytical findings
are presented in Chapter IV, and Chapter V discusses the implications of
the study findings for the national WIC and Medicaid programs.
Appendixes A and B contain tables with detailed analytical results.


¢ Omission of
the Cost of
Indigent Care
Programs from the
Database and the
Analysis

In terms of the services covered by Medicaid, no major service limitations
existed that would have affected normal maternal and newborn care.
However, some states imposed restrictions that may have limited Medicaid
reimbursement for high-cost newborns. In South Carolina, Medicaid
allowed a maximum of 18 ambulatory visits—including physicians’ visits—a
year; however, according to state Medicaid program staff, this restriction
probably did not affect most maternal and infant care. In contrast, Texas
and Florida imposed service limits during the study year that may have
limited the number of days reimbursed by Medicaid for high-cost
newborns. During the study period, the Texas Medicaid program paid for
a maximum of 30 inpatient hospital days per spell of illness, and required
a 60-day break before another reimbursable spell of illness. In addition,
it imposed a $50,000 expenditure cap. The cap was subsequently raised
to $200,000 in November 1988, with the other service restrictions
remaining unchanged. Florida imposed restrictions on both physician
visits and inpatient days in 1987. Medicaid recipients were allowed only
one physician inpatient hospital visit per day (although other physician
services in the hospital could be billed) and a maximum of 45 inpatient
days per fiscal year. These limitations were changed effective July 1989.
In particular, Florida eliminated limits on hospital days for children
younger than age one.

The Congressional mandate for this study requested an assessment of the
savings in both Medicaid and indigent care costs for newborns due to
prenatal WIC participation. However, determining indigent care costs for
pregnant women and newborns is difficult, since many of these costs are
bore by the private sector and are seldom documented. This problem is
particularly true with delivery and newborn services, for which states have
traditionally provided relatively little funding other than through Medicaid,
thus forcing hospitals to bear the brunt of uncompensated care costs.

This study does not directly examine the effects of prenatal WIC
participation on indigent care costs. Three main reasons explain the
omission of indigent care costs from the analysis. First and foremost is .
that the available data on state indigent care programs are limited. All
study states operate programs to serve the needs of low-income pregnant
women, and these programs are discussed in detail in another report from
this study, “Description of State Programs" (Bilheimer, 1990). However,
these programs often do not maintain individual-level data files on services
received and costs incurred. In particular, a major source of concern is
the high level of uncompensated hospital care for maternity and newborn
care, and it is not possible to obtain individual-level data on

18






Medicaid Program

@ Service proximity. Texas is the only one of the five states that did
not have a statewide WIC program during the study period; in 1988,
34 counties out of a total of 254 were unserved. The number of
unserved counties in Texas has steadily declined, and the last unserved
county received WIC services in 1990. To facilitate access, all of the
states use food instrument pick-up sites in addition to certification
sites.

© Income eligibility. Income eligibility standards are relatively uniform
across the five states. Nearly all WIC programs in all five states are
using the 185 percent of poverty income criterion, although, in 1987,
a few locations in Texas, Florida, and North Carolina may have used
a lower income eligibility criterion.

© Waiting lists. Strategies for maintaining waiting lists differ among the
states, but it is clear that some states face more of a caseload
management problem than do others and did so in 1987 as well. In
Minnesota, waiting lists and caseload management are important tools
in program operations and serve to identify excess demand for the
WIC program. The other study states made efforts to minimize the
use of waiting lists. While all states affirm that every effort is made
to ensure that priority I pregnant women are not placed on waiting
lists, the reality may vary by state. In particular, pregnant women may
experience delays in enrolling in the WIC program due to constraints
on public maternity care or waits for initial WIC appointments.

Authorized under Title XIX of the Social Security Act, Medicaid is a joint
federal and state program that reimburses the covered medical-care costs
of low-income persons. It is the largest program providing reimbursement
for health care services to the poor, but by no means are all low-income
persons eligible. Eligibility depends on categorical status in addition to
income, and states have considerable discretion in determining income
eligibility ceilings. In addition, while a core group of services is federally
mandated, states can choose to offer a wide range of optional services and
can also impose service limits on both mandated and optional services.

For many years, Medicaid eligibility for low-income pregnant women and
children was linked to eligibility for Aid to Families with Dependent
Children (AFDC). This link effectively excluded low-income pregnant
women in two-parent households and low-income women in their first
pregnancy, although some states opted to cover some of these women.

15


account the number and percentage of eligible women and children being
served, among other measures.

The WIC program is not an entitlement program, and states may not have
sufficient funds to serve all eligible persons who apply for the program.
Federal regulations thus require that the states establish a nutritional-risk
priority system to ensure that scarce program resources are allocated fairly
and reach those who need them the most. Priorities I to III are based on
nutritional risk established through documented nutritionally related
medical conditions, and priorities TV and V are based on nutritional risk
defined in terms of inadequate dietary patterns. Priority VI includes
postpartum women at nutritional risk, although some states may classify
some postpartum women at priority IIL, IV, or V. At their option, states
may define a priority VIL, which includes previously certified WIC
participants whose nutritional status might regress if they can no longer
receive supplemental foods. Pregnant women at nutritional risk as
demonstrated by documented medical conditions receive the highest
priority (priority I), while pregnant women at nutritional risk due to
inadequate dietary patterns are priority IV. During 1987, all five of the
study states served priorities I through IV, and all except Minnesota
served priorities I through VL

At the state level, the WIC agency enters into contracts with local
agencies to administer the program. WIC agencies are usually within local
departments of health, community health centers, or other local public
health care providers. The WIC agency is sometimes a community-based
organization or hospital. States establish both rules for allocating the
state’s funds to local agencies and guidelines within which the local
agencies must administer the WIC program.

Since the majority of WIC providers are local public health clinics, WIC
services have become an integral part of prenatal care provided to low-
income women by public clinics. In terms of aggregate expenditures, WIC
has become a major component of maternal and child health services at
the state and local levels, having grown from a $256 million program that
served 848,000 women and children in 1977 to a $2.1 billion program that
serves an estimated 4.5 million women and children in 1990.

The organization of program operations at the local level varies greatly,
but for pregnant women it works approximately as follows. When a
woman learns about the program and applies to the program at the WIC
office, she is screened to determine whether she meets the income

12



LIST OF FIGURES

Page
PREDICTED MEDICAID COSTS FROM BIRTH TO 60 DAYS
AFTER BIRTH, NEWBORNS AND MOTHERS ......---+-+0++0++ 41

PREDICTED MEDICAID COSTS FROM BIRTH TO 60 DAYS
AFTER BIRTH, NEWBORNS ......... 02: cere teeter ees 42




I. INTRODUCTION

The Commodity Distribution Reform Act and WIC Amendments of 1987
(Public Law 100-237) and the Joint Resolution Continuing Appropriation
for Fiscal Year 1988 (Public Law 100-202) mandated a study to examine
the relationship between prenatal participation in the Special
Supplemental Food Program for Women, Infants, and Children (WIC)
and Medicaid costs for mothers and newborns from birth to 60 days after
birth. This report presents the results of the study and consists of two
volumes, This first volume summarizes and discusses the basic findings of
the study and describes the WIC and Medicaid programs. The second
volume provides a more in-depth discussion of the methodological
approach underlying the study and the results of the analysis.

A. RATIONALE FOR THE STUDY

Low birthweight and infant mortality are major public health concerns in
the United States. The high social and economic costs associated with low
birthweight are now widely recognized, and public policy has endeavored
to prevent low birthweight by enhancing access to prenatal care,
particularly among low-income women. The high costs of caring for
infants with low birthweight impose a large financial burden on the
Medicaid program, the nation’s primary program providing reimbursement
for health care services to low-income women and their children. During
1984-85, approximately 17 percent of total U.S. births were financed by
Medicaid, and up to 41 percent of Medicaid expenditures for delivery
were for high-cost deliveries (Alan Guttmacher Institute, 1987; Howell
and Brown, 1989). In recent years, the Federal government has expanded
the Medicaid program specifically to improve access to prenatal and
neonatal care for poor women and their children.

At the same time, evidence that good prenatal nutrition improves birth
Outcomes has prompted increased expenditures under the WIC program,
which was authorized by Congress in 1972 to provide nutritional risk
assessments, food assistance, nutrition education, and health and social
service referrals to low-income pregnant and postpartum women and their
infants, and children up to age five. The major goal of the prenatal
nutrition supplementation and education provided under the WIC
Program is to improve the nutritional status of low-income pregnant
women. The program, which is federally funded and administered by state
and local agencies, has become a major component of the maternal and
child health services delivered at the state and local levels. Nationwide,
the WIC program has grown from a $750 million program that served 2


ACKNOWLEDGMENTS

This report was prepared by Mathematica Policy Research, Inc., under contract number 53-
3198-8-63 from the U.S. Department of Agriculture, Food and Nutrition Service, Office of Analysis
and Evaluation.

The report represents a team effort in which many individuals made key contributions. We
gratefully acknowledge the assistance of the following programmers who contributed their
enormous expertise and hard work to constructing the complex database for the analysis: Dan
Buckley, Robert Cohen, Lauren Haworth, Ann Huff, John Mamer, Josh Rozen, and Paula Wolk.
The members of the advisory panel for the study--David Baugh, David Guilkey, Ian Hill, Anne
Koontz, and Wayne Schramm--provided valuable comments on the database design, analysis, and
preliminary results. Florida, Minnesota, North Carolina, South Carolina, and Texas WIC,
Medicaid, Vital Records, and Health Statistics staff provided basic data extracts, program
information, and assistance in the planning and data collection stages of the study. We would also
like to recognize the substantial assistance and encouragement provided by Marian Lewin, formerly
of the Food and Nutrition Service, and by Jay Hirschman, Jan Lilja, Christy Schmidt, Ron Vogel,
and Fran Zorn of the Food and Nutrition Service, and David Baugh, Gretchen Brown, Deidra
Abbott, and Marilyn Hirsch of the Health Care Financing Administration.

The authors acknowledge their intellectual debt to the previous work of Wayne Schramm and
his colleagues at the Missouri Center for Health Statistics, who linked databases and compared
costs for the WIC and Medicaid programs, and to the work of Ian Hill and his colleagues at the
National Governors’ Association, who tracked and assessed the numerous recent Medicaid
expansions for pregnant women and children.

The authors would also like to thank several individuals from Mathematica Policy Research
who made important contributions both to the study and this report: Harold Beebout, John
Burghardt, Cindy Castro, Thomas Good, Debra Jones, and Barbara Prince.

Barbara Devaney
Linda Bilheimer
Jennifer Schore


IL DESCRIPTION OF THE STUDY STATES AND THE WIC
AND MEDICAID PROGRAMS

Background information on the study states and on the WIC and
Medicaid programs is important for interpreting and generalizing the
findings of the study, which are presented in the subsequent chapters of
this report. Section A of this chapter describes the perinatal and
sociodemographic characteristics of the five study states, and Section B
provides background information on the WIC and Medicaid programs.

A. DESCRIPTION OF THE STUDY STATES
Five states were selected for this study—Florida, Minnesota, North

Carolina, South Carolina, and Texas. Several factors were considered in
the final selection of the study states. They include:

The geographical distribution of the study states. The study states
were selected in part to ensure a representative geographic
distribution. The North Central, Southeastern, and Southwestern
regions of the country are represented by the five states selected,
although three of the five states are from the Southeast.

Large urban areas. Three of the five states selected (Florida,
Minnesota, and Texas) have large urban areas, which is useful for
drawing conclusions about the effectiveness of the WIC program in
other states with large urban areas.

Perinatal outcomes. It was desirable that the study states exhibit
variation in birth outcomes and perinatal risk factors to facilitate
determining whether the cost-effectiveness of the WIC program
depends on the extent to which the target population exhibits adverse
birth outcomes. The perinatal outcomes for the study states range
from some less favorable outcomes for South Carolina to some very
favorable outcomes for Minnesota.

Minority representation. Given the ethnic diversity of the target
population, it was desirable that the study states exhibit a broad
representation of minorities. Four of the five states (the exception is
Minnesota) have large minority populations, and both Florida and
Texas have a large Hispanic population. In addition, Minnesota
provides information on the effects of prenatal WIC participation in
states with a predominantly white population.


zeae” The Savings in
«er Medicaid Costs for

Otfice of

“i Newborns and Their
Mothers from
Prenatal Participation
in the WIC Program

Volume 1

Prepared by:

MATHEMATICA POLICY RESEARCH, INC.

Prepared for:
U.S. Department of Agriculture

Food and Nutrition Service
Office of Analysis and Evaluation

October 1, 1990



THE
CHARACTER-
ISTICS OF WIC
PARTICIPANTS
AND NONPARTI-
CIPANTS

the household incomes of the Medicaid mothers and newborns considered
in this study were very low, and considerably lower than the WIC income
eligibility limit of 185 percent of poverty. Since 1987, Medicaid has
increased the income eligibility standards for pregnant women and
children. Currently, states are required to expand Medicaid coverage to
pregnant women and children whose incomes are below 133 percent of
poverty and have the option to provide coverage up to 185 percent of the
federal poverty level.

The basic analytic approach to measuring the savings in Medicaid costs
from prenatal participation in the WIC program was to compare the
Medicaid costs of WIC participants with the Medicaid costs of a group of
women who did not participate in the WIC program (nonparticipants).
However, because WIC participants may differ from nonparticipants in
terms of other factors that also influence Medicaid costs, it was necessary
to identify and adjust for these differences in order to obtain accurate
estimates of the effects of prenatal WIC participants. Thus, an important
component of the analysis was a descriptive analysis of the demographic
and prenatal care characteristics of Medicaid mothers who are WIC
participants and those who are nonparticipants. WIC participants are
defined as women who redeemed any food instruments during the nine
months prior to birth or, if no redemption data are available, who had a
WIC certification date during the nine months prior to birth.

Differences in the adequacy of prenatal care for WIC participants and
nonparticipants were large and consistent across the study states. In all
five states, Medicaid mothers who did not participate in the WIC program
were two to three times as likely to have received inadequate prenatal
care as WIC participants, where inadequate prenatal care is defined as 4
or fewer prenatal care visits. Overall, 9.6 percent of WIC participants
received inadequate levels of prenatal care, in contrast to 22.4 percent of
nonparticipants. WIC participants in all five states also had an average of
one to two more prenatal visits. The average number of prenatal care
visits ranged from 8.9 to 11.2 for WIC participants and from 7.1 to 9.2 for
nonparticipants. These findings have important implications for the
analysis of Medicaid cost savings, since it is important that the effects of
prenatal WIC participation be isolated from the effects of prenatal care
on Medicaid costs.

Jn contrast to the striking differences in the adequacy of prenatal care, the
differences in the demographic characteristics of WIC participants and
nonparticipants in any given state were generally quite small.



THE EFFECT OF
PRENATAL WIC
PARTICIPATION
ON MEDICAID
COSTS

Prenatal WIC participation was associated with substantial savings in
Medicaid costs for newborns and their mothers during the first 60 days
after birth. When newborn and maternal Medicaid costs were able to be
separated, the estimated savings in newborn Medicaid costs associated
with prenatal WIC participation were even greater than the estimated
savings in combined newborn and maternal Medicaid costs.

© Average Medicaid costs from birth to 60 days after birth ranged from
$2,433 in South Carolina (hospital costs only) to $3,822 in Minnesota.
Average Medicaid costs for newborns only from birth to 60 days after
birth were available only for North Carolina and Texas and were
$1,733 and $1,867, respectively.

© Estimated reductions in Medicaid costs for newborns and their mothers
during the first 60 days after birth associated with prenatal participation
in the WIC program ranged from $277 in Minnesota to $598 in North
Carolina, with intermediate values of $347, $493, and $565 in Florida,
Texas, and South Carolina, respectively.

© Estimated savings in newborn Medicaid costs from birth through 60
days associated with prenatal WIC participation were $744 in North
Carolina and $573 in Texas.

Estimated savings in Medicaid costs were combined with data on the costs
of the WIC program to determine benefit-cost estimates for the prenatal
component of the WIC program. All benefit-cost estimates were greater
than one, indicating that the benefits of prenatal WIC participation
(estimated Medicaid savings) exceeded the costs of providing prenatal
WIC benefits. For newborns and mothers, these estimates ranged from
1.77 in Florida to 3.13 in North Carolina, with values of 1.83 for
Minnesota and 2.44 for both South Carolina and Texas. For newborns
only, the benefit-cost estimates were 3.90 in North Carolina and 2.84 in
Texas. Thus, for every dollar spent on the prenatal WIC program, the
associated savings in Medicaid costs during the first 60 days after birth
ranged from $1.77 to $3.13 for newborns and mothers and from $2.84 to
$3.90 for newborns only.

Two points must be considered when these findings are interpreted. First,
the estimated savings in Medicaid costs from birth to 60 days after birth
associated with prenatal WIC participation are independent of the effects
of prenatal care on Medicaid costs. The analytical results also show that
considerable Medicaid cost savings during the 60-day period after birth are
associated with receiving adequate or intermediate levels of prenatal care.

xii


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criterion and one or more of the risk criteria required for eligibility. If
she is eligible, she receives a nutrition education session and a food
instrument for the purchase of a food package from a participating
vendor. Usually (though not always), application, eligibility determination,
service receipt, and health care referrals all occur in the initial visit. In
subsequent months, the participant will then return to the WIC office
periodically in order to pick up her WIC food instrument and receive
nutrition education services. The frequency of food instrument pick-up
varies from once every month to once every three months (at which time
food instruments for three months are picked up). Participants are
eligible for WIC benefits through the end of the pregnancy and up to six
weeks postpartum. The mother may then be recertified as a breastfeeding
mother, or in some instances as a postpartum participant, in which case
she will continue to receive WIC services for an additional period of time.

The WIC programs in the five study states vary greatly in terms of their
total budgets, the total number of persons served, and the distribution of
the caseload across the eligibility categories. As shown in Table IL2, WIC
grants in the five states ranged from approximately $26 million in
Minnesota to $112 million in Texas in fiscal year 1987, with intermediate
figures of $36 million, $49 million, and $58 million in South Carolina,
North Carolina, and Florida, respectively.

Differences in aggregate expenditures are reflected in differences in the
total number of persons served by the WIC program. In 1987, the
average number of persons served per month ranged from 56,000 in
Minnesota to 226,000 in Texas. Data on the proportion of WIC
participants who are pregnant women do not exist for all the study states,
but information is available on the proportion of participants who are
women. These proportions appear to vary considerably, ranging from 15.6
percent in Minnesota to 26.3 percent in Florida. In the other three states,
the proportion of participants who are women varies from 21 percent to
23 percent. Thus, in terms of case mix, the Minnesota WIC program has
a lower proportion of women and a higher proportion of infants and
children than do the WIC programs of the other states, while Florida has
a higher proportion of women than the other states.

In contrast to the variation in the size of the program across the study

states, the availability and accessibility of WIC services vary somewhat less,
although some differences do exist.

13




WIC participants or nonparticipants and which provided WIC cost data
on the participants. These three data files were linked to create a
database with Medicaid birth records in a given time period that included
data on Medicaid costs, WIC participation status and costs, birthweight
and other pregnancy outcomes, and maternal characteristics, such as age,
race, birth parity, education, marital status, prenatal care, and previous
obstetrical history. The time period was 1987 for Florida, Minnesota,
North Carolina, and South Carolina and the first six months of 1988 for
Texas. The WIC/Medicaid data are described in Chapter II of this
volume and in more detail in the forthcoming Volume 2 of this report.

The second analytic component entailed developing an accurate measure
of the Medicaid costs that WIC participants would have incurred had they
not participated in WIC. This analytical component was not
straightforward, because, in addition to WIC participation, WIC
participants and nonparticipants may differ in terms of other
characteristics that affect perinatal outcomes and Medicaid costs. These
factors include demographic and prenatal care characteristics, all of which
vary across individuals and across the study states. Chapter IV of this
volume contains a brief summary of the methodological approach to this
study and Volume 2 will describe the methodological approach in greater
depth.

‘The third analytic component entailed using the results of the analysis to
draw inferences about the WIC and Medicaid programs. The analysis
yielded findings on the cost-effectiveness of prenatal WIC participation in
four states during 1987 and during the first six months of 1988 for Texas.
These findings differ among the study states, because their demographic
compositions and institutional structures differ and because they face
different problems in ensuring that low-income pregnant women and
children have access to care. In addition, the WIC and Medicaid
programs have changed since the study period. It is important that these
factors be considered when the findings are interpreted, in order to assess
their implications for the WIC and Medicaid programs.

2The five states were selected on the basis of an extensive feasibility study
that encompassed site visits to seven possible participant states and a
thorough review of their programs and data systems. Based on this
review, five of the seven states in the feasibility study were selected to
participate.

4


close to the 1986 national average, while the proportion for
Minnesota is considerably below the national average, and the
proportions for the other three states exceed the national average.

© Births to teenagers. In all four Southern states, the percentage of
births to teenagers is high relative to the nation as a whole, while a
very low percentage of births occurs to teenagers in Minnesota. The
contrast between the percentage of births to teenagers in Minnesota
and the four Southern states is striking.

@ Inadequate prenatal care. In 1986, the percentage of births to
women receiving late prenatal care (prenatal care during the third
trimester only) or no prenatal care was high in Florida, South
Carolina, and Texas relative to Minnesota and North Carolina and
relative to the nation as a whole. In contrast, the percentage with late
or no prenatal care was lower in both Minnesota and North Carolina
than the U.S. average.

For the most part, these data on perinatal risk factors are consistent with
the birth outcomes of the five study states. In particular, Minnesota
has both very favorable birth outcomes and lower risk factors for adverse
perinatal outcomes relative to the other four states, while South Carolina
shows the highest levels of risk for two of the three perinatal risk factors
and the highest rates of infant mortality and low birthweight.

The inclusion of Florida and Texas, both of which have a large Hispanic
population, raises some very interesting issues. The observed relationship
between prenatal care utilization and birthweight is weaker in states with
high proportions of Hispanic and Native American births (Hughes et al.,
1989). In general, Hispanic women have lower rates of prenatal care
utilization than non-Hispanic women, but also appear to be at lower risk
for having low-birthweight infants. It is possible that cultural factors
influence their use of prenatal care and affect their birth outcomes. Thus,
in analyses of the effects of prenatal WIC participation on Medicaid costs
and birth outcomes, the effects of variations in race and ethnicity must be
accounted for."

1FJorida and Texas are the only two of the five study states for which data
on Hispanic ethnicity are available. However, the number of Hispanic
births in the other three states is very small.

10


CONTENTS (continued)

Chapter Page

Vv. GENERALIZATION OF THE STUDY FINDINGS ................... 53

é MAJOR STUDY FINDINGS .......... 2.000. 0e cece cece eee ee 53
GENERALIZING THE STUDY RESULTS FOR 1987 MEDICAID

BIRTHS ..... 2.2... cece cence eee 54

Socioeconomic and Demographic Differences ................2.604- 55

Differences in Public Prenatal Care Systems for Low-Income Women.... 55

Differences in Medicaid Policies that Affect Reimbursement .......... s7

C. LONG-TERM STABILITY OF THE RESULTS ..........--...-0-5 59

Changes in the WIC Program Since 1987 ............0.- esses eeeee 59

Changes in the Medicaid Program Since 1987 ............ --. 60

Changes in Risk Factors for Adverse Pregnancy Outcomes ............ 63

D. CONCLUSIONS ....... 0... e eee eee nce e eee teen eees 63

REFERENCES ...... 2... cece cece cece eee e nee eee nee eeeees 65

APPENDIX A: ESTIMATED REGRESSION COEFFICIENTS
FOR MODEL TO ESTIMATE THE EFFECT OF WIC
PARTICIPATION ON MEDICAID COSTS

APPENDIX B: ESTIMATED REGRESSION COEFFICIENTS
FOR MODEL TO ESTIMATE THE EFFECTS OF WIC
PARTICIPATION ON BIRTHWEIGHT



THE EFFECT OF
PRENATAL WIC
PARTICIPATION
ON BIRTH
OUTCOMES

© For newborms and mothers, the estimated savings in Medicaid costs
during the first 60 days after birth associated with receiving adequate
or intermediate levels of prenatal care were $267 in Florida, $362 in
Texas, $623 in South Carolina (hospital costs only), $415 in North
Carolina, and $1,005 in Minnesota.

© For newborns only, the estimated reductions in Medicaid costs during
the 60-day period after birth associated with receiving adequate or
intermediate levels of prenatal care were $610 in Texas and $593 in
North Carolina.

The second important point is that the estimated savings in Medicaid costs
associated with prenatal WIC participation are not independent of any
unmeasured characteristics that also may affect pregnancy outcomes and
maternal and newborn Medicaid costs. WIC participants are a self-
selected group of women who may choose to participate in the WIC
program for underlying reasons that might also influence pregnancy
outcomes and Medicaid costs even in the absence of the WIC program.
For example, some pregnant women may not participate in the WIC
program because they lack access to public programs that provide health
care and other services, which may independently affect pregnancy
outcomes. Thus, the estimated savings in Medicaid costs related to
prenatal WIC participation may overestimate the true savings since,
relative to nonparticipants, WIC participants would have lower Medicaid
costs in the absence of the WIC program. The problem introduced by
self-selection is rendered less severe by the fact that (1) the adequacy of
prenatal care is also likely to be related to any such underlying differences
between WIC participants and nonparticipants, and (2) the analysis was
able to adjust the estimated savings in Medicaid costs associated with
prenatal WIC participation for the adequacy of prenatal care. However,
the potential implications of the self-selection issue should be kept in
mind when the study results are interpreted and generalized.

In all five study states, prenatal WIC participation by Medicaid recipients
was associated with increased birthweight, and the estimated increase in
birthweight was greatest for births occurring before 37 weeks gestation.

© The average increase in birthweight related to prenatal WIC
participation by Medicaid recipients ranged from 51 grams in
Minnesota to 73 and 77 grams in Florida and Texas, respectively, to
113 and 117 grams in South Carolina and North Carolina, respectively.


for high-cost newborns. The other three states did not impose
inpatient hospital service limits. These limitations on Medicaid
reimbursements could have the effect of reducing the savings in
Medicaid costs in Florida and Texas relative to the other study states
and would reduce the savings in Medicaid costs in other states with
relevant reimbursement limitations. Since 1987, however, those
Testrictions on Medicaid reimbursements in Florida and Texas have
been relaxed considerably, which could have the effect of increasing
the potential for savings in Medicaid costs in these two states.

© Among the five study states, only South Carolina did not have a
medically needy spend-down program at the time of the study. Spend-
down eligibility is a vehicle by which high-cost newborns can become
eligible for Medicaid due to their medical expenses. The absence of
the program could have the effect of reducing the apparent benefits of
WIC participation in South Carolina and in other states without
medically needy programs if the spend-down eligibility category
included a greater proportion of nonparticipants in the WIC program
than did other Medicaid eligibility categories.

The fact that the benefits of WIC program participation were so clearly
demonstrated in all the study states, despite their population and program
differences, suggests that a nationwide study of all 1987 Medicaid births
would show similar outcomes for WIC program participants and benefit-
cost ratios greater than one in the large majority of states.

Recent expansions and program enhancements in the Medicaid and the
WIC programs, as well as the growing problem of substance abuse among
Pregnant women, may also affect the long-term stability of the study
results. Higher Medicaid income-eligibility ceilings for pregnant women,
in conjunction with increased coordination between the Medicaid and the
WIC programs, mean that a higher-income group of women are likely to
Participate in the WIC program. At the same time, aggressive outreach
and improved eligibility procedures may bring a higher-risk group of
Pregnant women into both the Medicaid and the WIC programs. The net
effects of these enrollment changes on estimates of WIC benefits is
uncertain.


CONTENTS

Page
INTRODUCTION ....---- 0s eee eect nent etree eer cn es 1
A. RATIONALE FOR THE STUDY ..... 6... 6s eee ects 1
B. THE OBJECTIVES OF THIS STUDY . .. 2
C. BASIC STUDY DESIGN ........----- : . 3
D. ORGANIZATION OF THIS REPORT ....--- 0-0 +e reser erect 5
DESCRIPTION OF THE STUDY STATES AND THE WIC
AND MEDICAID PROGRAMS .....- 055s eee e cece erent eeeee 7
A. DESCRIPTION OF THE STUDY STATES 7
B. PROGRAM BACKGROUND .....--. eee e cere errr e settee 1
WIC Program 22.2... secre eee reer e eter teense e tence tse il
Medicaid Program 15
The Omission of the Cost of Indigent Care Programs
from the Database and the Analysis ......----+--++eeeeer ee eeeeee 18
DESCRIPTION OF THE DATA AND THE CHARACTERISTICS
OF WIC PARTICIPANTS AND NONPARTICIPANTS ....----- ++ +--+: 21
A. OVERVIEW OF THE WIC/MEDICAID DATABASE ......----++-+ 21
Medicaid Data .... 21
WIC Data.....-. 2. 23
Vital Records 24
Combining Measures of Medicaid Costs, WIC Participation and Costs,
and Maternal and Newborn Characteristics .......- 6+ eseee 24
B. THE CHARACTERISTICS OF WIC PARTICIPANT AND
NONPARTICIPANT MEDICAID MOTHERS ........---+---++-+- 30
Demographic Characteristics 30
Prenatal Care Characteristics 33
C. SUMMARY 2.0... eee c ce ceeeee eee eee eet teen ennenes 35
THE EFFECTS OF PRENATAL WIC PARTICIPATION ON
MEDICAID COSTS AND BIRTH OUTCOMES .......------+-+-25+> 37
A. METHODOLOGY .........0- eee eee ences ete 37
B. THE RESULTS OF THE ANALYSIS OF MEDICAID COSTS
FROM BIRTH TO 60 DAYS AFTER BIRTH ....-----+-2ssee eee 40
C. THE RESULTS OF THE ANALYSIS OF BIRTH OUTCOMES ...... 48




© WIC participation rate. Variation in the penetration of the WIC
program among eligible pregnant women is important for assessing the
effects of prenatal WIC participation in states whose availability and
accessibility of WIC services differ. For the five states in this study,
the percentage of Medicaid births occurring to WIC participants
ranged from a low of 47.8 percent in Texas to a high of 73.4 percent
in South Carolina, with intermediate values of 57.6 percent, 68.8
percent, and 68.7 percent in Florida, Minnesota, and North Carolina,
respectively.

Although only five states participated in the WIC/Medicaid study, the
selected states accounted for 18 percent of all U.S. births in 1987.
Overall, some striking contrasts in birth outcomes and perinatal risk
factors exist among the five study states. As shown in Table IL1,
Minnesota contains a lower proportion of low-income women and exhibits
birth outcomes that are more favorable than those of the other study
states. Both its infant mortality rate and percentage of low birthweight
infants are the lowest of the five states and are lower than the rates for
the nation as a whole. In contrast, all of the three Southeastern states—-
North Carolina, South Carolina, and Florida—have infant mortality rates
greater than the national average, with South Carolina having the highest
rate of the five study states. Texas is an extremely large state, accounting
for roughly 8 percent of all U.S. births. Its infant mortality rate is below
the U.S. average, although the percentage receiving late or no prenatal
care is considerably higher than the national average and is the highest of
the five study states.

Table IL1 presents information on three key perinatal risk factors: the
poverty status of women of childbearing age, births to teenagers, and
inadequate prenatal care. The following summarizes the differences in
these risk factors among the study states:

© The poverty status of women of childbearing age. Minnesota has a
considerably lower percentage of low-income women of childbearing
age than do the other four states, and the contrast is even more
marked for the proportion of women below 185 percent of the
poverty level. At the other end of the spectrum, South Carolina has
the highest percentage of low-income women of childbearing age. In
comparison with national data, the proportion of low-income women
of childbearing age in North Carolina in 1984-1986 is very




In addition, AFDC income eligibility standards in some states were so low
that many women below the poverty level were not poor enough to
qualify for Medicaid. This problem was particularly severe in the South;
in 1987, seven Southern states had AFDC payment standards below 30
percent of the federal poverty level (Hughes et al, 1988), which was
$9,056 for a family of three. States have the option of establishing
medically needy programs, which have a higher income ceiling, but they
are not to exceed 133 percent of the AFDC payment standard. Under a
medically needy program, low-income women with high obstetrical and
neonatal costs could "spend-down" and become Medicaid-eligible, although
they were ineligible for Medicaid during their pregnancies.

The growing awareness of the cost-effectiveness of prenatal care in the
early 1980s occurred amid growing concerns about the rising costs of
maternity care and the inadequate financing of maternity care. Access
problems were particularly severe for low-income pregnant women and
infants, many of whom lacked any form of health insurance coverage. In
response to these concems, Congress authorized a series of expansions of
the Medicaid program to pregnant women and infants. The mandates of
the Deficit Reduction Act of 1984 and the Consolidated Budget
Reconciliation Act of 1985 effectively eliminated the Medicaid categorical
eligibility requirement that linked Medicaid eligibility to AFDC eligibility
and required that states provide Medicaid coverage of prenatal, delivery,
and postpartum services to all income-eligible women regardless of their
family structure. Subsequent initiatives in the Omnibus Budget
Reconciliation Acts of 1986 and 1987 (OBRA-86 and OBRA-87) and the
Medicare Catastrophic Act of 1988 have progressively expanded Medicaid
income eligibility to pregnant women and children. Legislation under
OBRA-86, which became effective during 1987, permitted states to extend
coverage to pregnant women and newborns in families whose incomes
were up to 100 percent of the federal poverty level, and permitted them
to waive the assets test for eligibility. OBRA-87 expanded this option by
allowing states to cover pregnant women and infants up to 185 percent of
the federal poverty level. All states were required by July 1990 to provide
Medicaid coverage to pregnant women and infants below 100 percent of
the federal poverty level Finally, under the Omnibus Budget
Reconciliation Act of 1989, states are mandated to expand Medicaid
coverage to all pregnant women and children under age six whose incomes
are below 133 percent of the poverty level.

The OBRA-86 expansions to 100 percent of the poverty level were not
implemented in any of the study states until October 1987, towards the

16


WIC Program

B. PROGRAM BACKGROUND

The descriptions of the WIC and Medicaid programs in this section
provide background information for the analytical findings presented in
the following chapters. The discussion focuses primarily on the important
features of program operations. A broader discussion of WIC, Medicaid,
and other indigent care programs for low-income pregnant women and
their newborns is contained in another report from this study, “Description
of State Programs" (Bilheimer, 1990).

The WIC program was authorized by Congress in 1972 to provide
nutritional screening, food assistance, nutrition education, and health care
referrals to low-income pregnant women, breastfeeding women,
postpartum women, infants, and children up to age five who are at
nutritional risk. The major goal of the prenatal component of the WIC
program is to improve the nutritional status of low-income pregnant
women. In most states, the WIC program has become one of the largest
and most important public health programs for low-income pregnant
women and infants, but both the extent to which the WIC program is
integrated with other maternal and child health services and the
proportion of eligible women and infants who participate vary considerably
across the states.

Program eligibility depends on both income level and evidence of
nutritional risk. States have the option of setting income eligibility
between 100 and 185 percent of the federal poverty level, provided that
income eligibility is no lower than that for free or reduced-price health
services. Nearly all states have set income eligibility at 185 percent of the
poverty level. Nutritional risks include both medical risks, such as anemia,
extremes of leanness or obesity, maternal age, or poor pregnancy history,
and dietary risks due to poor dietary patterns.

The WIC program is administered nationally by the Food and Nutrition
Service (FNS) of the U.S. Department of Agriculture (USDA) and at the
state level by a designated state agency, usually the state department of
health? Congress sets funding annually, and the available funds are
allocated to the states on the basis of an allocation formula that takes into

2The WIC program is administered by the Departments of Health in all
of the study states.

i


PROGRAM
BACKGROUND

births in Texas to almost three-quarters of the Medicaid births in South
Carolina.

The five study states exhibited some striking contrasts in birth outcomes
and perinatal risk factors. Minnesota had a lower proportion of low-
income women than the other study states and had birth outcomes that
were more favorable than those of the other study states. Both its infant
mortality rate and percentage of low-birthweight infants (birthweight of
less than 2,500 grams, or 5.5 pounds) were the lowest of the five states
and were lower than the rate for the nation as a whole. In contrast, all
of the three Southeastern States--Florida, North Carolina, and South
Carolina--had infant mortality rates that were higher than the national
average. Texas is an extremely large state, accounting for roughly 8
percent of all U.S. births. In 1987, its infant mortality rate was below the
U.S. average, although a relatively high proportion of women received
inadequate levels of prenatal care.

Authorized by Congress in 1972, the WIC program provides nutritional
risk assessments, food supplementation, nutrition education, and health
and social service referrals to low-income Pregnant and postpartum
women and their infants, and children up to age five. The program, which
is federally funded and administered by state and local agencies, has
become one of the largest public health programs for low-income
pregnant women and children. Nationwide, the WIC program has grown
from a $750 million program that served 2 million women and children in
1980 to an estimated $2.1 billion program that serves 4.5 million women
and children in 1990. During fiscal year 1987, the WIC program in the
five study states ranged from an approximately $26 million program that
served an average of 56,000 persons per month in Minnesota to a $112
million program that served 226,000 persons per month in Texas.

Medicaid is a joint federal and state program that reimburses the covered
medical-care costs of low-income persons. Authorized under Title XIX
of the Social Security Act, Medicaid has become the nation’s primary
medical-reimbursement program for low-income individuals. For many
years, the income eligibility for Medicaid was linked to the AFDC income
eligibility standards, which were low enough that many women below the
poverty level were not poor enough to qualify for Medicaid. In 1987, the
poverty income threshold was $9,056 for a family of three, and, for the
five study states, the Medicaid income eligibility standards for pregnant
women and children ranged from 33 percent of the poverty level in Texas
to 88 percent of the poverty level in Minnesota. In Florida, North
Carolina, and South Carolina, income eligibility levels were between 40
and 50 percent of the poverty level for most of the study period. Thus,

x


GENERAL-
IZATION OF
THE STUDY
FINDINGS

© For Medicaid births occurring before 37 weeks gestation, the average
increase in birthweight associated with prenatal WIC participation
ranged from 138 grams in Minnesota to 259 grams~approximately half

a pound-in South Carolina.

Prenatal WIC participation by Medicaid recipients was also associated
with a lower incidence of preterm births and a longer gestational age.

The results of the study indicate that prenatal participation in the WIC
program improves birth outcomes and generates savings in Medicaid costs.
‘Two important questions concerning the study results are:

1, What inferences can be drawn from these state-specific results about
the nation as a whole?

2. How stable are these conclusions over time?

The following socioeconomic differences among Medicaid-eligible
pregnant women and differences among the state Medicaid programs are
particularly important for addressing these two questions:

e At the time of the study, Medicaid income eligibility ceilings ranged
from 33 percent of the poverty level in Texas to 88 percent in
Minnesota; the other three states had income eligibility ceilings
between 40 percent and 50 percent of the poverty level. In 1987, the
federal poverty income threshold was $9,056 for a family of three. If
prenatal WIC participation is more beneficial for lower-income women,
the variation across states in the Medicaid eligibility ceilings would
result in larger effects of prenatal WIC participation in states with
lower Medicaid eligibility ceilings and smaller effects in states with
higher ceilings.

© The Medicaid income eligibility standards have increased considerably
since 1987. If prenatal WIC participation is more beneficial for lower-
income women, then the benefits of prenatal WIC participation
observed in 1987 may be greater than what would be observed under
the current Medicaid income eligibility standards for pregnant women,
which range from 133 to 185 percent of the federal poverty level.

@ In 1987, both Florida and Texas imposed inpatient hospital service
limits that may have restricted the amounts that Medicaid reimbursed

xiv