The unintended impact of welfare reform on the medicaid enrollment of eligible immigrants.

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 restricted most legal immigrants entering the United States after August 22, 1996, from receiving federally funded Medicaid for at least five years after immigration (Personal Responsibility and Work Opportunity Reconciliation Act of 1996). Since the passage of PRWORA, which is commonly known as welfare reform, legal immigrants have been divided into two eligibility categories. Qualified immigrants are noncitizens who immigrated to the United States before August 22, 1996. Qualified immigrants remained eligible for Medicaid. Unqualified immigrants are noncitizens who immigrated after August 22, 1996, and were barred from Medicaid for five years after entry. Illegal immigrants do not fall into either category; they have always been and continued to be Medicaid ineligible, except in emergency circumstances. Although welfare reform restricted unqualified immigrants' access to federally funded Medicaid, it gave states the option of using state funds to continue state Medicaid programs for unqualified immigrants. States would not receive any federal matching dollars for such programs. States have traditionally been given the authority to expand or deny Medicaid benefits to certain groups, however this was the first time that states were allowed to determine eligibility for immigrants. After welfare reform, eight states continued Medicaid for unqualified immigrants using their own funds. In addition to these changes, welfare reform also reinforced the link between the use of public benefits by immigrants and the public charge law. Public charge has been part of immigration law for more than 100 years, but was rarely enforced. A public charge is, “an alien who has become or is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance, or institutionalization for long-term care at government expense” (Department of Health and Human Services 1998). Welfare reform gave the primary responsibility of enforcing this law to the Immigration and Naturalization Service (INS) (Schlosberg and Wiley 1998). If an INS officer deemed an immigrant a public charge, then this could result in the denial of a green card, denial of readmission to the United States after a trip abroad, or, very rarely, in deportation. In 1999, INS policy was revised to reassure immigrants that they would not be considered a “public charge” for using Medicaid and certain other benefits, such as food stamps (Immigration and Naturalization Service 1999). It remains unclear if this reassurance has been effective at changing immigrants' perceptions. Immigrants are more likely than the U.S.-born to need Medicaid as a source of health insurance because they are poorer (Schmidley 2000) and are less likely to be covered by employer-based health insurance (Carrasquillo, Carrasquillo, and Shea 2000; Thamer et al. 1997). The role of Medicaid in improving access to medical care has been consistently demonstrated (Ayanian et al. 2000; Berk and Schur 1998; Lurie et al. 1984). Research also suggests that immigrants are less likely to have a usual source of care (Ku and Matani 2001), and that immigrants' utilization of health care services is lower than the U.S.-born (Frisbie, Cho, and Hummer 2001; Halfon et al. 1997). Immigrants face numerous cultural and linguistic barriers to care, however; policies that deter immigrants from Medicaid may play an important role in increasing disparities in access to health care. Prior studies have shown that after the passage of welfare reform, the Medicaid enrollment rates of immigrants declined more steeply than for the U.S.-born (Ellwood and Ku 1998; Fix and Passel 1999; 2000; Ku and Matani 2001). However, these studies are somewhat limited because they only examined Medicaid enrollment in the years immediately after welfare reform or they did not take into account whether the immigrant was qualified or unqualified. The present study specifically compares the effect of welfare reform on the Medicaid enrollment of qualified immigrants (those who entered the United States prior to August 22, 1996) and U.S.-born citizens. To study this effect, we used cross-sectional data from the 1994 through 2001 March Supplements of the Current Population Survey (CPS) (U.S. Census Bureau, Annual Demographic Survey of March CPS Supplement) and asked two questions. First, did qualified immigrants experience greater declines in Medicaid enrollment than U.S.-born citizens after welfare reform? Qualified immigrants remained Medicaid eligible, just like U.S. citizens, in all 50 states and the District of Columbia. Our hypothesis is that after welfare reform, qualified immigrants were less likely to enroll in Medicaid compared to the U.S.-born, even though they continued to have the same eligibility. There are several possible reasons for this differential decline in enrollment. One possibility is that the policies aimed at unqualified immigrants had a spillover effect. Interviews conducted with immigrants soon after welfare reform, found that some qualified immigrants expressed both fear and misinformation about Medicaid eligibility (Feld 2000; Stuber et al. 2000). Qualified immigrants thought that enrolling in Medicaid would prevent them from becoming U.S. citizens, that the government would try to keep track of them through the Medicaid program, and that the new welfare reform laws made all immigrants ineligible. Another mechanism through which welfare reform may have differentially affected qualified immigrants is through the delinking of welfare and Medicaid, which meant that individuals on welfare were no longer automatically eligible for Medicaid. Most states continued to have a single application process and made efforts to ensure that individuals did not lose Medicaid coverage. Despite this, there is evidence that individuals were inadvertently dropped from Medicaid after welfare reform because of the numerous administrative changes, confusion over Medicaid case rules, and failure to update automatic eligibility notification systems (Ku and Garrett 2000). It is plausible that immigrants may have had more difficulty negotiating these changes or reapplying for Medicaid if they were erroneously dropped. Our second question asks: was the size of the decline in enrollment for qualified immigrants less in states that continued Medicaid eligibility for unqualified immigrants compared to those in states that did not continue Medicaid for unqualified immigrants? We hypothesized that qualified immigrants living in the eight states that continued Medicaid for unqualified immigrants would experience less of a decline in enrollment than qualified immigrants living in states that did not cover unqualified immigrants. States may have been able to shield immigrants from the spillover effect of federal welfare reform by continuing Medicaid for all immigrants. Again, the mechanisms of this are complex and may include differences in state Medicaid programs that extend beyond their immigrant policy. However, because variations in state Medicaid programs are extensive and continuously changing, we chose to focus on the one policy toward immigrants that has been most constant since 1996.