Family planning waivers work, research shows

By Rachel Benson Gold
Director for Policy Analysis
The Alan Guttmacher Institute
Washington, DC

Over the past decade, 18 states have obtained federal approval to extend eligibility for Medicaid-covered family planning services to individuals who would otherwise not be eligible. In 2001, these programs served 1.7 million clients, with 1.3 million served in California alone. The first national evaluation of these efforts — commissioned by the Centers for Medicare & Medicaid Services (CMS) in Baltimore — found that every one of the programs studied not only met the requirement that they not result in additional costs to the federal government, but actually saved money.1

Although saving public funds while expanding government services is laudable at any time, doing so is particularly significant at a time when states are in financial crisis and resorting to painful cuts to their Medicaid programs.

In general, states have taken one of three approaches to their programs, which technically require a federal waiver of specific provisions of the Medicaid statute. By law, states are required to cover pregnancy-related care, including family planning, for 60 days postpartum for women with incomes up to 133% of the federal poverty level ($15,670 for a family of three in 2004), which is far above states’ regular Medicaid eligibility ceilings. Six states — Arizona, Florida, Maryland, Missouri, Rhode Island, and Virginia — extend the postpartum period for family planning services for one to five years. Two additional states, Delaware and Illinois, extend family planning coverage to women who leave Medicaid for any reason.

Ten other states (Alabama, Arkansas, California, Mississippi, New Mexico, New York, Oregon, South Carolina, Washington, and Wisconsin) take a far bolder approach by granting Medicaid coverage for family planning solely on the basis of income to women not previously covered under Medicaid at all. Most of these programs cover women in the state with incomes up to 185% or 200% of the federal poverty line. (Four programs — California, New York, Oregon, and Washington — also cover men.)

Programs meet the mark

The CMS study was conducted by the CNA Corp. in Alexandria, VA, along with researchers from the Atlanta-based Emory University and the University of Alabama at Birmingham. It first looked at six state waiver programs (in Alabama, Arkansas, California, New Mexico, Oregon, and South Carolina) to determine whether they met the federal requirement for budget neutrality — that is, that federal spending under the waiver not exceed what federal spending would have been without the waiver.

Using what they deemed to be the most appropriate method for calculating budget neutrality, the researchers found that all six programs resulted in often substantial net savings. For example, the South Carolina program realized total savings of $56 million over a three-year period starting in 1994, while Oregon’s program saw savings of nearly $20 million in a single year. These savings were split between the federal and state governments, based on a formula established by CMS for calculating the federal share of Medicaid costs.

In addition, the CMS study found that even as they saved money, the waivers increased access to services. In four of the six states (Alabama, Arkansas, California, and Oregon), the number of clients served in clinics receiving funds through the Title X program who met the eligibility requirements for the waiver grew after the program was implemented. Geographic availability of services increased in all states, and two states (California and Oregon) demonstrated significant use of private-sector as well as family planning clinic–based services. Finally, the study found evidence in two states (Florida and South Carolina) of a measurable reduction in unintended pregnancy among the total population of women eligible for the waiver — a very high bar for the program to clear, according to the researchers.

Lessons to be learned

The study findings have important implications for federal and state policy-makers and for reproductive health advocates. At the federal level, the study shows that the family planning waivers may well have demonstrated what they were designed to test. Also, it shows that it may be time to give states the authority to expand Medicaid family planning eligibility on their own, without having to go through the process of obtaining a federal waiver — widely acknowledged to be cumbersome at best and prohibitive at worst. Three measures to do just that are pending in the Senate.

The findings have significant relevance for policy-makers at the state level as well. At a time when the states are feeling compelled to make difficult choices about their Medicaid programs, an effort that can reduce costs while actually improving access to care for enrollees may be particularly attractive.

Finally, the study provides important corroborative evidence for a long-standing assertion of reproductive health advocates: that providing additional resources for high-quality family planning services is a wise policy choice, especially in difficult economic times, because it expands access to a service people want and need to improve their own health and well-being and saves taxpayers money. In that way, the study could provide important new impetus for advocates and policy-makers at the federal and state levels to find some much-needed common ground.

Reference

1. Edwards J, Bronstein J, Adams K. Evaluation of Medicaid Family Planning Demonstrations. Alexandria, VA: The CNA Corp., 2003. [For details on Contraceptive Technology Update’s continuing education program, contact: Customer Service, Thomson American Health Consultants, P.O. Box 740056, Atlanta, GA 30374. Telephone: (800) 688-2421. Fax: (800) 284-3291. E-mail: customerservice@ahcpub.com. Web: www.ahcpub.com.]