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Connecting Medicaid and child support: evidence from the TennCare disenrollment

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Abstract

In 2005, Tennessee disenrolled about 170,000 adults from its Medicaid program. This health insurance reform has been shown to decrease access to care and worsen financial well-being. Those affected by the disenrollment greatly overlaps with the population responsible for paying child support. We examine whether the contraction of public health insurance eligibility in Tennessee affected child support receipt. We find that after TennCare disenrollment, parents with custody of children in Tennessee were 7.2 percentage points (16 percent) less likely to receive child support income. Child support income also decreased by $204 (20 percent). We document heterogenous effects, with the largest effect among custodial parents who are non-white, under age 40, and above the poverty line.

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  1. Another focus of policies is to financially help the custodial parents (usually mothers) directly (Cancian, et al., 2011) however these proposals are controversial as some believe it is the financial responsibility of the non-custodial parents, and policies that focus with focus on custodial parents are shifting the responsibility away from non-custodial parents.

  2. The uninsurable category was able to be eligible up to 400% of the Federal Poverty line, but anyone above the 133% FPL would need to pay premiums and co-payments on a sliding scale. For childless adults, the income eligibility was up to 133% FPL.

  3. In Kentucky, for example, Medicaid consisted of about 18 percent of the state’s appropriations.

  4. At the time of TennCare disenrollment, parental eligibility was limited to those with incomes less than 80 percent FPL (KFF, 2020). If only one parent is considered the legal custodial parent, then only one parent can be considered eligible for Medicaid as a parent. If joint custody is established, then both parents can claim the child as a dependent if they file taxes jointly. If filing separately, however, only one parent can claim the child as a dependent (the legal custodial parent), and this parent would be eligible for Medicaid under parental eligibility, but the other parent (the legal noncustodial) would only be eligible through “childless adult” eligibility. This is true regardless of the living arrangements.

  5. Three features of the overall reduction in Medicaid coverage are important to consider. First, coverage was curtailed for those individuals who remained eligible for TennCare. Continuing enrollees were limited to 4 prescriptions per month and 20 days of inpatient care per year. Second, the state developed a Health Care Safety Net program, funded with $184 M (2018 dollars; inflated from the original estimates, $140 M in 2005 dollars, using the Consumer Price Index), to provide care and assistance to disenrollees. This program included the Mental Health Safety Net (MHSN). Reports indicate that registration with the MHSN by disenrollees with serious mental health was only 65%. At best, the program was able to provide some temporary assistance to disenrollees. Third, community health centers and faith-based organizations were able to absorb some demand from the newly uninsured. Interviews with disenrollees suggest that many had substantial difficulty accessing needed healthcare services after TennCare was terminated. The available literature clearly shows that the disenrollment had a substantial and negative effect on Medicaid enrollment and coverage overall.

  6. Among males aged 45-64 in the U.S., expenditures were about $6,455.

  7. We use the age cut off of 21-64 as a proxy for the age group of the non-custodial parents. NCP’s ages below 21 could have found eligibility through other sources of insurance through being a dependent. Ages above 64 would be eligible by Medicare. Technically we do no need this restriction, since this is about the age of the custodial parent. We relax this restriction in our robustness tables and the results are similar. We prefer this age threshold to approach the set of people that would be most likely to have NCPs affected by the TennCare disenrollment.

  8. In our results we indicate the year in which the information is about, rather than the survey year.

  9. According to Tennessee Department of Human Services, 2008 edition of A Guide to Tennessee Income Shares, “the Department of Human Services replaced the Flat Percentage of income version of guidelines for child support with an Income Shares version, effective January 18, 2005. The Income Shares Guidelines were amended effective June 20, 2006. The new amendments, effective July 22, 2008, further advance the process of determining support, update the figures for self-employed persons, low income parents, and imputed income.”

  10. For example, imagine a custodial parent’s monthly income is $1,000 and the non-custodial parent earns $2,000 per month. If a non-custodial parent was required to contribute 10% of their income, before the change this would be $200 per month. After the change, the fraction of the combined income ($3,000) earned by the non-custodial parent is 66.7%. If the child support obligation is $500, then the non-custodial parent should pay $500*0.667 = $333.5 per month.

  11. Appendix Table 5 shows that TennCare did indeed reduce health insurance coverage by 2.7 percentage points (3.3 percent) among men without dependent children aged 18–50. If we focus on individuals with lower than high-school education (as a proxy for income) the effect is as large as a reduction of 14 percentage points (19%). These results, using the BRFSS, confirm previous work on this topic.

  12. We are limited primarily due to the lack of similarity in the pre-TennCare time periods across treatment and control states.

  13. We have also run a specification where the outcome is divorced and the results are similar as with the marriage outcome.

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Authors and Affiliations

  1. School of Public Policy, Georgia Tech. 685 Cherry St., Atlanta, GA, 30332, USA

    Lindsey Rose Bullinger

  2. Frank Batten School of Leadership and Public Policy & National Bureau of Economic Research, University of Virginia, 235 McCormick Road., Charlottesville, VA, 22904, USA

    Sebastian Tello-Trillo

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  1. Lindsey Rose Bullinger
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Appendix

Appendix

Figures 4–7 and Tables 5–7

Fig. 4
figure 4

Standard deviations across treatment and control groups before TennCare disenrollment

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Fig. 5
figure 5

Raw trends for main variables

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Fig. 6
figure 6

Event study specification for marriage rates

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Fig. 7
figure 7

Effects of TennCare disenrollment on open child support cases

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Table 5 Effects of the disenrollment on health insurance coverage for men 21–50 without children in the household
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Table 6 Testing standard error adjustments
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Table 7 Alternative specifications
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Bullinger, L.R., Tello-Trillo, S. Connecting Medicaid and child support: evidence from the TennCare disenrollment. Rev Econ Household 19, 785–812 (2021). https://doi.org/10.1007/s11150-021-09547-w

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