Washington Watch

Medicaid expansions drive funding growth

By Adam Sonfield Senior Public Policy Associate
Guttmacher Institute
Washington, DC

Federal and state funding for family planning client services reached $1.85 billion in FY 2006, a 63% increase over 12 years, adjusting for inflation.1 Beneath this national trend, however, lie more disparate ones at the state level. Spending decreased or stagnated in 18 states and the District of Columbia since FY 1994, while it increased dramatically elsewhere. (See list of 18 states, below.)

Virtually all of this recent increase in funding has come via the joint federal-state Medicaid program. National Medicaid spending on family planning increased by $775 million, which is nearly 150%, since FY 1994. This continues a decades-long rise in the importance of Medicaid to the provision of family planning services: Medicaid now accounts for 71% of total public funding, up from merely 20% in FY 1980. It also parallels growth in the broader Medicaid program and in U.S. health spending generally.

Although the increasing importance of Medicaid can be seen in states across the country, most of the recent growth in spending reflects a revolution in state policy. Over the past decade, there has been an advent of state programs to expand eligibility for family planning under Medicaid above the income eligibility ceiling for their overall Medicaid program. The 14 states that, by 2006, had initiated one of these income-based Medicaid family planning expansions accounted for two-thirds of the new dollars since the mid-1990s. (See list of 14 states, below.)

Family Planning Spending   Family Planning Expansions

The funding brought into the family planning system as a result of these expansion programs has translated into more Americans being provided with the contraceptive services they need to help them avoid an unplanned pregnancy. The number of Medicaid family planning clients served in the 14 states with expansions increased by 60% from 2000 to 2005, with more than 1 million new clients and more than three times the rate of increase in the rest of the country. An earlier study found that between 1994 and 2001, the entire family planning clinic system in states with these income-based Medicaid expansions managed to increase their client base by one-quarter, compared with no increase at all in states without an expansion.2

More Medicaid ahead

The importance of Medicaid generally and Medicaid expansions specifically to the public provision of family planning services will no doubt continue to grow. Six additional states (Illinois, Louisiana, Minnesota, Pennsylvania, Texas, and Virginia) have implemented such an expansion since mid-2006, and several others are seeking to do so. Currently, states wishing to initiate an expansion program must go through a cumbersome and uncertain process of applying for and periodically renewing a "waiver" from the standard Medicaid rules.

Legislation pending in Congress, the Unintended Pregnancy Reduction Act, is designed to eliminate the barrier of the waiver process. It would give states authority to expand their coverage of Medicaid family planning services to individuals up to the same income level used by the state to determine eligibility for pregnancy-related care, on a permanent basis and without the need for a waiver.3 That legislation was approved by the House in August 2007 as a component of a bill to reauthorize and expand the State Children's Health Insurance Program (SCHIP).4 The Senate never acted on this issue, and it was stripped from the compromise version of SCHIP (along with virtually everything else the House had wanted) that was ultimately vetoed by President Bush. Significantly, however, the family planning expansion provision did not attract public opposition in Congress or from the president, and its sponsors are seeking another legislative train for it to ride.

It's a patchwork system

Despite the ever-increasing importance of Medicaid to the U.S. family planning effort, other programs remain vital nationwide and in specific states. The Title X national family planning program accounts for 12% of U.S. spending on family planning client services, and state appropriations account for 13%. Title X comprises at least 25% of funding for family planning in one-third the states.

Because they are not tied to specific clients or services (as is the case with Medicaid), these federal and state grants are especially flexible and valuable to family planning providers. They can be used for outreach and education activities to draw in hard-to-reach and hard-to-serve clients and to shore up and improve the fragile infrastructure of the nation's clinic system. Even as Medicaid grows, clinics will rely on these other grants to provide services beyond the package paid for by Medicaid and to serve those who are ineligible for Medicaid, including many immigrants.

Beyond those roles, Title X, in particular, will continue to set national standards for providing family planning services that are comprehensive, voluntary, confidential, and affordable and will continue to help knit disparate threads of funding into a flawed but functioning safety net.

References

  1. Sonfield A, Alrich C, Gold RB. Public funding for family planning, sterilization, and abortion services, FY 1980-2006. Occasional Report. New York City: Guttmacher Institute; 2008, No. 38.
  2. Frost JF, Frohwirth L, Purcell A. The availability and use of publicly funded family planning clinics: U.S. trends, 1994-2001. Perspect Sex Reprod Health 2004, 36:206-215.
  3. Unintended Pregnancy Reduction Act of 2007, S. 1075 and H.R. 2523.
  4. Children's Health and Medicare Protection Act of 2007, H.R. 3162.