The Impact of Welfare Reform on Insurance Coverage before Pregnancy and the Timing of Prenatal Care Initiation

Despite recent improvements in many maternal and infant health indicators, maternal and infant morbidity and mortality continue to be public health problems in the United States. Throughout most of this century, policymakers have endorsed prenatal care (PNC) as one means of improving maternal and infant health. In particular, initiation of PNC early in pregnancy has been advocated because it allows for early detection and treatment of existing medical and obstetric conditions and provides an opportunity for encouraging healthy behavior and educating women early in their pregnancies about proper nutrition, adequate weight gain, dangers of smoking, alcohol and drugs, and other factors that may affect pregnancy outcomes (Lewis, Mathews, and Heuser 1996). Healthy People 2000 (NCHS 2001) included a target that 90 percent of pregnant women initiate PNC in their first trimester. When the target was not met (only 83 percent of women initiated care in their first trimester in 2000), it was reiterated in Healthy People 2010 (USDHHS 2000; NCHS 2001). To increase the use of PNC, policymakers and program planners focused on improving access to it. Beginning in the mid-1980s, the federal government gradually expanded eligibility requirements for Medicaid to include more low-income pregnant women. By 1989, states were required to cover pregnant women with family incomes up to 133 percent of the federal poverty level (FPL) and could opt to include pregnant women with family incomes up to 185 percent of the FPL (Gold, Singh, and Frost 1993). In addition, states could implement presumptive eligibility, extending temporary Medicaid coverage to pregnant woman so that they can receive PNC immediately; outstationing, signing pregnant women up for Medicaid at provider offices instead of solely at welfare offices; and continuous eligibility, allowing women to retain Medicaid coverage throughout pregnancy despite fluctuations in income (Gold, Singh, and Frost 1993). The federal government also began providing matching funds to states for a broader set of services for pregnant women, including case management. As a consequence of these expansions, the percentage of live births paid for by Medicaid increased significantly, from 17 percent in 1985 to 35 percent in 1998 (The Alan Guttmacher Institute 1987; NGA 2001). Early PNC initiation also increased in the first half of the 1990s; the percentage of mothers initiating PNC in the first trimester of pregnancy increased from 76 percent in 1985 through 1991 to 83 percent in 1998 (Lewis, Mathews, and Heuser 1996; USDHHS 2002). How much of this increase was due to the Medicaid expansions remains uncertain. A review of the literature on this issue suggests that the expansions led to modest improvements in PNC use but only in some states and only for some groups of affected women (Howell 2001). Payment of delivery costs by Medicaid does not necessarily mean that women enrolled in Medicaid initiated PNC early in their pregnancies. Studies have found that the timing of PNC initiation is strongly associated with the timing of coverage (Egerter, Braveman, and Kristin 1999) and that women with Medicaid-covered deliveries often do not enroll until their second or third trimester and therefore initiate PNC later in their pregnancies than women with prior coverage (Braveman et al. 1993; Kaestner 1999). Recent changes in social welfare programs may have slowed or threatened further improvements in first-trimester PNC initiation. In particular, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 may have stalled or reversed improvements in early initiation of PNC among low-income women in the United States. PRWORA replaced Aid to Families with Dependent Children (AFDC) with the Temporary Assistance for Needy Families (TANF) program. The new program restricted welfare tenure and imposed new work requirements and sanctions for noncompliance. PRWORA also uncoupled welfare and Medicaid eligibility and barred most immigrants entering the country after August 22, 1996 from receiving federally supported Medicaid benefits for at least 5 years. Although drafters of the welfare reform legislation required states to retain Medicaid eligibility for families with dependent children who were at or below the states' AFDC income eligibility levels as of July 1996, beneficiaries were no longer automatically enrolled in Medicaid by their social workers as they had been under AFDC. Studies show parallel reductions in welfare and Medicaid caseloads with concurrent increases in the number of uninsured adults (Ellwood 1999; Holahan and Pohl 2002; Holl, Slack, and Stevens 2005). Because welfare recipients are primarily women of childbearing age, they are particularly vulnerable to becoming uninsured (Gold 1999; Thorpe, Flome, and Joski 2001; Kaestner and Kaushal 2003). Private insurance options have not been available for many women who are diverted from welfare or who leave welfare for work (Garrett and Holahan 2000). A recent study of data from eight states found that welfare reform decreased the probability that unmarried pregnant women with children who met the July 1996 AFDC income standards were insured before pregnancy by an average of 7.9 percentage points (Adams et al. 2005). Pregnancy may be a motivating factor for many of these eligible women to enroll in the program. Delays in enrollment or in finding Medicaid participating providers may lead these women to initiate PNC later in their pregnancies. Three prior studies investigated the effects of recent welfare reforms on PNC initiation (Joyce et al. 2001; Currie and Grogger 2002; Kaestner and Lee 2005). Using National Natality Files (NNF) for 1990 through 1996, Currie and Grogger (2002) investigated the effects of pre-PRWORA reforms. They found statistically significant positive effects of the rate of welfare receipt on whether women received first-trimester PNC. Furthermore, they found a larger estimated effect for unmarried teens and high school dropouts compared with married college-educated women, which they argue provides evidence that the effects were related to changes in the welfare program. In a subsequent study, using a similar longitudinal analysis and data from the NNF extending beyond PRWORA implementation (i.e., 1992–2000), Kaestner and Lee (2005) found welfare caseloads to be positively associated with first-trimester PNC among unmarried women with less than 12 years of education. However, when they applied a difference-in-difference approach to separate out the effects of changes in welfare caseloads due to general economic trends from those due to welfare reform, they found welfare reform to have a much smaller and statistically insignificant impact on PNC initiation. Joyce et al. (2001) used a difference-in-difference approach and natality files pre- and post-PRWORA to investigate the impact of welfare reform on PNC initiation among foreign-born Latino women, as a proxy for recent immigrants, versus U.S.-born Latino women in California, New York City, and Texas. They found no evidence that welfare reform altered early initiation of PNC among foreign-born Latinas in these areas. These authors were unable to accurately identify the population affected by PRWORA with the natality files and therefore unable to clearly determine PRWORA's effect on the population of interest. The sample of low-educated, unmarried women used by Currie and Grogger and by Kaestner and Lee and the sample of foreign-born women used by Joyce and colleagues exclude many pregnant women affected by the welfare policies and include many who were not affected, adding noise to their estimates and potentially lowering the magnitude and significance of their findings. Furthermore, because the NNF do not include data on insurance coverage, neither Currie and Grogger nor Kaestner and Lee were able to determine whether the estimated effect was a result of lower insurance coverage or other barriers to care arising from welfare reform, making it more difficult to identify corrective policies. To investigate these questions more fully, we used data from the Pregnancy Risk Assessment Monitoring System (PRAMS) before and after the implementation of welfare reform to conduct an analysis of first-trimester PNC initiation among pregnant women financially eligible for Medicaid at welfare income levels. The database includes information on women's family income and health insurance coverage before pregnancy not available on natality files. We were therefore able to more accurately identify the population of interest and to separate out the effects of changes in insurance coverage and other barriers to care resulting from welfare reform.