children are still eligible for Medicaid, and state Medicaid agencies will need to find new ways to notify parents about their children's eligibility.

Some observers believe that the changes in the welfare system may result in an increase in the number of Medicaid-eligible children who are not enrolled in the program and that outreach and public education efforts will need to be further strengthened and supported. Early in 1998, the Clinton Administration announced new initiatives to increase outreach and enrollment efforts in Medicaid.

Welfare Reform and SSI Recipients

In 1996, approximately 1 million children under age 18 received Medicaid on the basis of the determination of a disability and associated eligibility for cash payments under the SSI program (SSA, 1997). The 1996 welfare reform law changed the way in which childhood eligibility for SSI is determined by introducing more stringent requirements for SSI eligibility in the following ways:

  • establishment of new definitions of childhood disability,
  • redetermination of the eligibility status of current children receiving SSI under previous regulations and definitions, and
  • continuing reviews of disability status.

With the enactment of the Balanced Budget Act of 1997, Medicaid eligibility (but not cash SSI payments) was restored to many of the SSI recipients who lost coverage under the new welfare law. However, as of August 1997, the new, more restrictive eligibility rules for children with emotional and behavioral problems resulted in the termination of cash disability benefits for more than 95,000 children (SSA, 1997). Eventually, 15 percent of the 1 million children in the program could lose their cash benefits if that rate continues (see Chapter 7, Box 7.1, for a description of the SSI program).

A new option in the Balanced Budget Act of 1997 allows states to create a Medicaid ''buy-in" program for individuals whose incomes are under 250 percent of the federal poverty level and who would otherwise meet the medical eligibility criteria for SSI. The buy-in amounts will be set on a sliding scale based on family income. The new option is geared toward children with disabilities, but it is unclear how many of the children with emotional and behavioral disabilities will eventually be included because of the changes in the determination criteria and procedures.

Why not have Medicaid as a secondary insurance? If you need it and you are running out of your own insurance, pay a premium. That motivates you to work. You could still go to work and could pay your taxes into a Medicaid system, like we pay into the Medicare system. Our spend down amount is $1,100 a month. How are we supposed to pay our mortgage and eat?

Karen LaPlante

Parent, Dublin, VA

Public Workshop, June 2, 1997

The Balanced Budget Act of 1997

Increasingly, managed care has become the delivery system for both privately and publicly insured children and families. One of the most significant changes made by the Balanced Budget Act of 1997 is

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