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1 (January 27, 2005)

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                                                                Order Code RS22035
                                                                    January 27, 2005



 CRS Report for Congress

               Received through the CRS Web




     Coverage of the TANF Population Under
                     Medicaid and SCHIP

                               Elicia J. Herz
                      Specialist in Social Legislation
                      Domestic Social Policy Division

Summary


     Health insurance is an important support for individuals receiving, leaving or
 diverted from the Temporary Assistance for Needy Families (TANF) welfare or cash
 assistance program for low-income families. Medicaid and SCHIP (State Children's
 Health Insurance Program) are key vehicles for providing such coverage. While there
 is no formal link between TANF and either Medicaid or SCHIP, some TANF-eligibles,
 especially children, are likely to qualify for one of these programs. But state eligibility
 rules can be complex and often differ for parents versus children, leaving some parents,
 in particular, without coverage. Finally, transitional medical assistance (TMA) for
 families losing Medicaid coverage for work-related reasons is set to expire at the end of
 March 2005.


 Background

    Medicaid provided access to medical services for approximately 51.4 million people
in 2002 (the latest official enrollment figure). To qualify, applicants' income and
resources (also called assets) must be within program financial standards. These
standards vary considerably among states, and different standards apply to different
population groups within a state. Medicaid eligibility is also subject to categorical
restrictions - generally, it is available only to low-income persons who are aged, blind,
disabled, members of families with dependent children, and certain other pregnant women
and children.

    The Temporary Assistance for Needy Families (TANF) program provided cash
assistance to 2.2 million families in FY2003. TANF is structured as a flexible block grant
to states, and it was the centerpiece of the 1996 welfare reform law, replacing previous
entitlements to cash assistance. Under TANF, eligibility thresholds and benefit levels are
established by states, but federal law imposes work requirements and time limits on
benefits.


Congressional Research Service **o The Library of Congress

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