Women benefit from expanded Medicaid family planning coverage, new study shows

A new study published by The Alan Guttmacher Institute indicates states that have expanded Medicaid coverage of family planning services to more low-income women are better able to meet women’s need for these services than states that have not.

Researcher Jennifer Frost said the states also have seen a 27% increase in the proportion of women whose need for publicly funded family planning service has been met, while states without any Medicaid expansion for family planning have not seen any improvement. Each year, she wrote, more than 20 million American women obtain contraceptive services from a medical provider, and one-quarter of these women received care from a publicly funded family planning clinic. In 2001, a total of 6.7 million women, including 1.9 million teens, received contraceptive services from the 7,683 publicly funded U.S. family planning clinics.

Medicaid is a major source of funding for family planning services. Between 1994 and 2001, seven states — Alabama, Arkansas, California, New Mexico, Oregon, South Carolina, and Washington — obtained federal waivers to provide Medicaid coverage of family planning services to some low-income women earning more than the standard Medicaid cutoff in their states.

Publicly funded clinics needed

On average in 2000, these states served half of women in need of publicly funded services, while states that had not expanded Medicaid coverage served only 40% of women in need. Ms. Frost said publicly funded family planning clinics continue to play a critical role in delivery of contraceptive services and supplies to millions of American women.

Two broad types of change have occurred in the network of publicly funded family planning clinics:

  • First are structural changes, such as changes in the distribution of clinics and clients according to provider type.
  • Second are capacity changes revealed in the absolute gains and losses in clinics and clients served and in changes in the proportion of needs met by clinics.

According to Ms. Frost, structural changes in the clinic network have resulted in part because family planning focused providers have consolidated their operations and are now serving more clients at fewer sites, while primary care focused providers have dispersed and have a greater number of sites, each serving fewer contraceptive clients.

"From the point of view of women seeking services," she said, "the implications of these structural changes are likely to be considerable. High turnover in facilities means that many women will not have a stable source of ongoing care. Some women may lose access to a site they know well or like and may not know of an alternative source. Others may need to travel further to access care when sites close or merge."

The study found regional and state trends in the numbers of clinics and clients served reveal evidence of change in the capacity of the family planning clinic network. Clinic closures, according to Ms. Frost, have not always been compensated for by clinic openings in the same area.

When the researchers looked at the expansion of Medicaid covered family planning care under state-initiated waiver programs, they found that seven states initiated such programs between 1994 and 2001, expanding eligibility for Medicaid-covered contraceptive care to low-income women. In those states, 25% more clients were served by clinics in 2001 than in 1994, and the proportion of met need increased by 27%, so that 50% of all women who needed publicly funded contraceptive care received such care in clinics.

By contrast, the study pointed out, states with less expansive or no waivers served fewer cases in 2001 than in 1994, and the proportion of need met by clinics remained at or below 40%.

Ms. Frost explained that her findings demonstrate the implementation of income-based Medicaid family planning waivers raises the capacity of local clinic networks and improves access to contraceptive care for more women who need such care. And the impact of waivers on clinic capacity may help explain the striking regional variation observed, she added.

Waivers in 19 states

An October 2004 Guttmacher Institute Policy Brief said 19 states have obtained federal approval to extend Medicaid eligibility for family-planning services to individuals who otherwise would not be eligible. Thus, six states have extended eligibility for family planning services to women losing Medicaid postpartum, with eligibility generally lasting for two years.

Also, two states provide family planning benefits for women losing Medicaid for any reason, and 11 states provide family planning benefits to individuals based on income, with most states setting the income ceiling at or near 200% of poverty. Some five states provide family planning benefits to men and women, and three states limit their programs to women at least 19 years old.

The value of state-initiated programs expanding eligibility for Medicaid-covered family planning services was demonstrated in a Centers for Medicare & Medicaid Services (CMS)-funded evaluation conducted earlier in 2004. The evaluation found that all of the expansion programs studied not only met a federal requirement that they not result in additional costs to the federal government, but actually saved money.

Good time to save money

"Although saving public funds while expanding government services is laudable at any time, finding a way to do so is particularly significant at a time when states are otherwise feeling the need to make painful Medicaid cuts," wrote researcher Rachel Benson Gold.

The CMS evaluation first looked at waiver programs in Alabama, Arkansas, California, New Mexico, Oregon, and South Carolina to determine whether they met the federal requirement for budget neutrality — holding federal spending under the waiver to no more than it would have been without the waiver.

Using what they deemed to be the most appropriate method for calculating budget neutrality, evaluators from CAN Corp., Emory University, and the University of Alabama at Birmingham found that all six programs resulted in substantial net savings. (See chart.) For example, Ms. Gold said, the South Carolina program realized total savings of $56 million over a three-year period starting in 1994, while Oregon’s program, saved nearly $20 million in one year. Savings were split between the federal and state governments based on a formula established by CMS for calculating the federal share of Medicaid costs.

The evaluation also found that even as they saved money, the waivers increased access to services. In four of the six states studied, the number of clients served in clinics receiving funds through the Title X program who met the eligibility requirements for the waivers grew after the program was implemented.

Ms. Gold reported that geographic availability of services increased in all states and two states demonstrated significant use of private-sector as well as family planning clinic-based services. Also, the study found evidence in two states of a measurable reduction in unintended pregnancy among the total population of women eligible for the waiver.

Ms. Gold said the evaluation results have important implications for federal and state policy-makers and for reproductive health advocates. The first lesson learned, she said, is that states need to be allowed to decide how to structure their programs. Waivers are time-limited research, and demonstration initiatives that test innovative strategies for providing cost-effective care to Medicaid enrollees and the evaluation provided what Ms. Gold said is convincing evidence that the waivers demonstrated what they were intended to test.

Legislation introduced

The Family Planning State Empowerment Act, sponsored by Sens. Lincoln Chafee (R-RI) and Diane Feinstein (D-CA) would give states the authority to expand Medicaid family planning eligibility on their own, without having to obtain a federal waiver. A similar provision also is in the Improving Women’s Health Act sponsored by Sen. Blanche Lincoln (D-AR) and in the Prevent Prematurity and Improve Child Health Act sponsored by Sens. Lincoln, Richard Lugar (R-IN), and Jeff Bingaman (D-NM).

At a minimum, Ms. Gold said, the CMS evaluation provides a road map for CMS to streamline the waiver process by giving states a uniform formula for asserting budget neutrality that is agreed upon in advance. That could reduce the length of time significantly between an application’s submission and its approval.

The second lesson learned is that bigger is better. She said the evaluation findings have relevance for state policy-makers who, in harsh economic times when difficult choices must be made on the Medicaid program, can reduce costs while improving access to care. "Because family planning services are cost-effective, the more people eligible to receive services, the greater the savings to the federal government and to the states," Ms. Gold explained.

The evaluators wrote that "programs that cover all low-income women, for example, will likely reach more of the expansion-eligible women in a given year than those that cover only postpartum women. Given the eligibility structure of the demonstration, a higher enrollment of uninsured eligible women and a greater use of effective contraceptive services will lead to a greater likelihood that the state will see an effect on unwanted pregnancies," they added.

The value of streamlined enrollment was seen in the California Family PACT program. Clients are enrolled at the family planning clinic rather than having to apply in person at a welfare office. Such point-of-service eligibility eliminates the need for clients to make multiple visits and avoids the stigma associated with welfare. Also, clients are able to access services immediately.

The study found that in California, 48% of eligible individuals used services, more than twice the level reported in other states. While the study does not assert a causal relationship between provider-determined eligibility in California and utilization levels, Ms. Gold noted that it gives policy-makers something to think about.

Finally, the evaluation provided 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 while still saving taxpayers money, Ms. Gold pointed out.

(Download the study materials from www.guttmacher.org.)