Transitional Medical Assistance (TMA) Under Medicaid

Transitional Medical Assistance (TMA) Under Medicaid

Order Code RL31698
Transitional Medical Assistance (TMA)
Under Medicaid
Updated July 24, 2008
April Grady
Analyst in Health Care Financing
Domestic Social Policy Division

Transitional Medical Assistance (TMA) Under Medicaid
Summary
Medicaid, a means-tested federal/state program that provides health care
coverage to certain groups of individuals, requires that states continue Medicaid
benefits for certain low-income families who would otherwise lose coverage because
of changes in their income. This continuation is known as transitional medical
assistance (TMA). Federal law permanently requires four months of TMA for
families who lose Medicaid eligibility due to increased child or spousal support
collections, as well as those who lose eligibility due to an increase in earned income
or hours of employment. Congress expanded work-related TMA under Section 1925
of the Social Security Act in 1988, requiring states to provide TMA to families who
lose Medicaid for work-related reasons for at least six, and up to 12, months.
To qualify for TMA under Section 1925, a family must have received Medicaid
in at least three of the six months preceding the month in which eligibility is lost and
have a dependent child in the home. During the first six months of TMA, states must
provide the same benefits the family was receiving, although this requirement may
be met by paying a family’s premiums, deductibles, coinsurance, and similar costs
for employer-based health coverage. An additional six months of TMA (for a total
of up to 12 months) is available for families who continue to have a dependent child
in the home, who meet reporting requirements, and whose average gross monthly
earnings (less work-related child care costs) are below 185% of the federal poverty
line. States may impose a premium, limit the scope of benefits, and use an
alternative service delivery system during the second six months of TMA.
Although federal statute outlines requirements for TMA, some states modify
these requirements in practice. A survey of state Medicaid directors conducted by
the Congressional Research Service (CRS) in July 2002 collected information on
TMA programs in 46 states. Although not required by law, 12 states provide more
than 12 months of TMA coverage. Many states also have policies that modify the
“three of six months” requirement (17 states), change reporting requirements (19
states), or allow individuals to self-declare earnings and child care costs (20 states).
None of the states have limited the scope of benefits provided during the second six
months, and three states impose a premium. States are not required to report TMA
participation and expenditures separately from other Medicaid data, but a number of
states were able to provide these as part of the CRS survey.
Since 2001, Section 1925 TMA requirements have been funded by a series of
short-term extensions, most recently through June 30, 2009 (P.L. 110-275).
Although a State Children’s Health Insurance Program (SCHIP) reauthorization bill
passed by the House in 2007 (H.R. 3162) would have modified TMA and extended
it for four years, the SCHIP bills that were vetoed (H.R. 976 and H.R. 3963) would
not. If Section 1925 were allowed to expire, states would still be required to provide
four months of TMA to families who lose Medicaid eligibility because of an increase
in earned income, hours of employment, or child or spousal support, but not to those
who lose eligibility because of the loss of a time-limited earnings disregard (such
disregards allow families to qualify for Medicaid at higher income levels for a set
period of time).

Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Family Medicaid Coverage and Cash Welfare . . . . . . . . . . . . . . . . . . . . . . . 2
Medicaid Eligibility Under Section 1931 . . . . . . . . . . . . . . . . . . . . . . . 2
Transitional Medical Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Initial Six-Month Period of Section 1925 TMA Coverage . . . . . . . . . . 5
Second Six-Month Period of Section 1925 TMA Coverage . . . . . . . . . 6
TMA Enrollment and Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
State TMA Program Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Legislative Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
TMA and Welfare Reauthorization . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Recent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Appendix. State TMA Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
List of Figures
Figure 1. Medicaid Monthly Income Eligibility Threshold for a Working
Parent Applicant in a Family of Three, July 2006 . . . . . . . . . . . . . . . . . . . . . 4
List of Tables
Table 1. TMA Enrollment and Expenditures for Selected Months in 2001 . . . . . 7
Table 2. Overview of State TMA Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Table A-1. Responses to the CRS Survey on TMA Policies, by State . . . . . . . . 15

Transitional Medical Assistance (TMA)
Under Medicaid
Introduction
Medicaid, a means-tested federal/state program that provides health care
coverage to certain groups of individuals, requires that states continue Medicaid
benefits for certain low-income families who would otherwise lose coverage because
of changes in their income. This continuation of benefits is known as transitional
medical assistance (TMA). Federal law permanently requires four months of TMA
for families who lose Medicaid eligibility due to increased child or spousal support
collections. It also permanently requires four months of TMA for families who lose
Medicaid eligibility due to an increase in earned income or hours of employment.
However, Congress expanded work-related TMA benefits as part of the Family
Support Act of 1988 (P.L. 100-485), requiring states to provide at least six, and up
to 12, months of TMA coverage to families losing Medicaid eligibility due to
increased hours of work or income from employment, as well as to families who lose
eligibility due to the loss of a time-limited earned income disregard (such disregards
allow families to qualify for Medicaid at higher income levels for a set period of
time).1 An additional six months of TMA (for a total of up to 12 months) is required
for families who meet certain conditions. These expanded TMA requirements are
outlined in Section 1925 of the Social Security Act, and Congress has acted several
times to extend them beyond their original sunset date of September 30, 1998. Most
recently, TMA requirements under Section 1925 were extended through June 30,
2009, by P.L. 110-275.
This report provides an overview of TMA. While Section 1925 of the Social
Security Act outlines the provisions requiring states to provide TMA for up to 12
months, states have considerable flexibility in designing and implementing their
TMA programs. To better understand these programs, the Congressional Research
Service (CRS) conducted a survey of state TMA policies in effect on July 1, 2002.
1 Under the Aid to Families with Dependent Children (AFDC) program, the predecessor to
the Temporary Assistance for Needy Families (TANF) program — which had a direct link
to Medicaid eligibility — states were required to disregard the earnings of a recipient family
for a limited time (special rules applied to applicants and child students). For the first four
months of a job (less for part-time work), the disregard per month was $120, one-third of
remaining earnings, and actual dependent child care costs up to $175 (up to $200 for a child
under age 2). In months five through 12, the disregard per month was $120 plus dependent
care costs. After 12 months, the disregard per month was $90 plus dependent care costs.
The intent of these disregards was to allow individuals to remain on cash assistance (and
Medicaid) for a limited period of time as they transitioned to work.

CRS-2
This report summarizes the results of the survey and discusses legislation introduced
to extend, and in some instances to modify, TMA.
Family Medicaid Coverage and Cash Welfare
Medicaid is a health insurance program jointly funded by the federal
government and the states. While states have considerable flexibility to design and
administer their programs, certain groups of individuals must be covered for certain
categories of services. Generally, eligibility is limited to low-income children,
pregnant women, parents of dependent children, the elderly, and people with
disabilities. The federal government finances more than half of all Medicaid
expenditures annually.
Medicaid Eligibility Under Section 1931. As described throughout this
report, states are required to provide TMA to families who lose eligibility for
Medicaid under Section 1931 of the Social Security Act. Following is a description
of how Medicaid eligibility works for these families.
Prior to the creation of the Temporary Assistance for Needy Families (TANF)
program, individuals qualifying for welfare under the Aid to Families with
Dependent Children (AFDC) program were automatically eligible for and, in most
states, automatically enrolled in Medicaid. The Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (P.L. 104-193, herein referred to as the
welfare reform law) formally “de-linked” Medicaid and cash assistance and created
a new Medicaid eligibility category for low-income families under Section 1931 of
the Social Security Act.
Medicaid entitlement under Section 1931 was retained only for individuals who
meet the income and resource eligibility standards of their state’s former AFDC
program in effect on July 16, 1996 (herein referred to as eligibility under Section
1931), regardless of whether they receive TANF or ever received AFDC. However,
states were given flexibility to modify their income and resource eligibility standards
for Medicaid in three ways: (1) states may lower their income standards, but not
below those used for AFDC on May 1, 1988; (2) states may increase their income
and resource standards by an amount that is no more than the percentage increase in
the Consumer Price Index (CPI); or (3) states may use less restrictive income and
resource methodologies than those in effect on July 16, 1996.
Since the welfare reform law of 1996, a number of states have aligned Section
1931 Medicaid eligibility with eligibility for TANF, and many use less restrictive
methods for counting income and resources to allow individuals and families to
qualify for Medicaid at higher income and resource levels than those in place on July
16, 1996. As part of their methodology for determining Medicaid eligibility, some
states have policies in place to disregard a portion of earnings or income for a limited
period of time. For example, a state might disregard the first $120 plus 90% of
earnings during a family’s first four months of Section 1931 Medicaid coverage.
After month four, the disregard drops to $120. As a result, the amount a family can

CRS-3
earn and still qualify for Medicaid is reduced in the fifth month of coverage and
beyond.2
As shown in Figure 1, the Medicaid income eligibility threshold for a working
parent3 applicant in a family of three ranged from $280 to $5,848 per month as of
July 2007.4 In 10 states, a working parent applicant in a family of three needed
income at or below 50% of the federal poverty line (FPL) to qualify for Medicaid.5
The same parent could have income between 50% and 100% FPL in 19 states, and
income above 100% FPL in 22 states (including DC).
In addition to disregarding certain amounts or types of income, states may
disregard some or all of the value of a parent’s assets when determining eligibility for
Medicaid. As of July 2007, 22 states (including DC) had eliminated their Medicaid
asset test for parents. In contrast, 46 states (including DC) had done so for children.6
2 In 2001 (the most recent comprehensive data available), 36 states (including DC) did not
have time-limited disregard policies for Section 1931 coverage, meaning that the amount a
family could earn and still qualify for Medicaid would not vary from month to month. In
the 15 states with these policies, the length of the disregard period ranged from four to 12
months. See Kaiser Commission on Medicaid and the Uninsured, Can Medicaid Work for
L o w - I n c o m e W o r k i n g F a m i l i e s ? ( A p r i l 2 0 0 2 ) , a v a i l a b l e a t
[http://www.kff.org/medicaid/4032-index.cfm].
3 Although parents and children are eligible for family Medicaid coverage under Section
1931, a number of eligibility pathways with higher income and asset thresholds (e.g.,
mandatory eligibility for ages 6 and under with family income less than or equal to 133%
FPL) may be available for children. Depending on state practices, children may be enrolled
via these other pathways, rather than Section 1931. In contrast, Section 1931 is one of the
few Medicaid eligibility pathways available for parents (and more generally, adults) who
are not pregnant, disabled, or elderly. States that wish to work outside of the regular
Medicaid rules can do so under a waiver (see CRS Report RS21054, Medicaid and SCHIP
Section 1115 Research and Demonstration Waivers, by Evelyne P. Baumrucker).
4 Kaiser Commission on Medicaid and the Uninsured, Health Coverage for Children and
Families in Medicaid and SCHIP: State Efforts Face New Hurdles (January 2008), available
at [http://kff.org/medicaid/7740.cfm]. Income disregards can significantly increase the
levels at which individuals are eligible for Medicaid. For example, while New Mexico’s
monthly income eligibility threshold for a non-working parent applicant is 200% FPL
($2,862 for a family of three in 2007), the threshold for a working parent applicant rises to
more than 400% FPL ($5,848) when certain earnings disregards (in this case, $125 plus one-
half of remaining earnings) are taken into account.
5 The 2008 federal poverty line for a family of three is $17,600 per year ($22,000 in Alaska
and $20,240 in Hawaii). The 2007 federal poverty line for a family of three is $17,170 per
year ($21,470 in Alaska and $19,750 in Hawaii).
6 Ibid.

CRS-4
Figure 1. Medicaid Monthly Income Eligibility Threshold for a Working Parent Applicant
in a Family of Three, July 2007
New Mexico*
$5,848
Minnesota
$3,936
Iowa*
$3,557
District of Columbia
$2,962
Maine
$2,952
Oklahoma*
$2,862
Indiana*
$2,862
Arkansas*
$2,862
Arizona
$2,862
Wisconsin
$2,737
Vermont
$2,737
Rhode Island
$2,737
Illinois
$2,737
Connecticut
$2,737
Utah*
$2,146
New York
$2,146
New Jersey
$1,904
Massachusetts
$1,903
Hawaii
$1,646
Delaware
$1,521
California
$1,521
Alaska
$1,444
Oregon
$1,431
South Carolina
$1,430
Nevada
$1,341
Ohio
$1,288
Tennessee
$1,143
Washington
$1,092
Colorado
$949
Kentucky
$909
North Dakota
$904
Michigan
$871
Montana
$855
Nebraska
$851
Pennsylvania
$842
Florida
$806
South Dakota
$796
Wyoming
$790
New Hampshire
$781
Georgia
$756
North Carolina
$750
Idaho
$595
Missouri
$556
Maryland
$524
West Virginia
$499
Kansas
$493
Mississippi
$458
Virginia
$438
Texas
$402
Alabama
$366
Louisiana
$280
Source: Kaiser Commission on Medicaid and the Uninsured, Health Coverage for Children and Families in Medicaid and SCHIP (January 2008).
Note: Amounts reflect earnings disregards, if any, which may be time-limited (see text for details). Parents in 29 states also must meet an asset
test to qualify. Depending on the state, coverage may be under Section 1931 of the Social Security Act or under a waiver. States marked with (*)
cover their higher income parents under a waiver, but enrollment may be limited and the coverage may have fewer benefits and higher cost-sharing
than regular Medicaid. The 2007 federal poverty line for a family of three is $1,431 per month ($1,789 in Alaska and $1,646 in Hawaii).

CRS-5
Transitional Medical Assistance
States must provide TMA to families losing eligibility for Section 1931
Medicaid under two scenarios.7 First, states are required to provide four months of
TMA coverage to families who lose Medicaid eligibility under Section 1931 due to
increased child or spousal support. This provision was included in the Child Support
Amendments of 1984 (P.L. 98-378) and was made permanent by the Omnibus
Budget Reconciliation Act of 1989 (P.L. 101-239).
Second, under Section 1902(e)(1) and Section 1925 of the Social Security Act,
states are required to provide TMA to families losing Section 1931 Medicaid
eligibility for work-related reasons. States were originally required to provide four
months of TMA to families losing eligibility due to an increase in hours of work or
income from employment. However, the Family Support Act (FSA) of 1988 (P.L.
100-485) expanded state TMA requirements under Section 1925, requiring states to
provide at least six, and up to 12, months of TMA coverage to families losing Section
1931 Medicaid eligibility due to increased hours of work or income from
employment, as well as to families who lose eligibility due to the loss of a time-
limited earned income disregard.
FSA originally authorized Section 1925 to replace the four-month requirement
in Section 1902(e)(1) through FY1998. However, the welfare reform law of 1996
(P.L. 104-193) extended Section 1925 thorough FY2001, and the provision has
continued to exist under a series of short-term extensions (most recently, through
June 30, 2009).8
If Section 1925 were allowed to expire,9 states would still be required to provide
four months of TMA to families who lose Medicaid eligibility due to an increase in
earned income or hours of employment, but not to those who lose eligibility due to
the loss of a time-limited earnings disregard. In addition, regardless of activity to
extend Section 1925, states would still be required to provide four months of TMA
to families who lose Section 1931 eligibility due to increased child or spousal
support.
Initial Six-Month Period of Section 1925 TMA Coverage. Under
Section 1925 of the Social Security Act, families losing Section 1931 Medicaid
eligibility due to the loss of a time-limited earned income disregard or an increase in
hours of work or income from employment must receive at least six months of TMA
7 Section 1931(c) of the Social Security Act.
8 P.L. 106-554, P.L. 107-229, P.L. 107-235, P.L. 107-240, P.L. 107-244, P.L. 107-294, P.L.
108-2, P.L. 108-40, P.L. 108-89, P.L. 108-210, P.L. 108-262, P.L. 108-308, P.L. 109-4, P.L.
109-19, P.L. 109-91, P.L. 109-171, P.L. 109-432, P.L. 110-48, P.L. 110-90, P.L. 110-173,
P.L. 110-275.
9 Over the years, the provision has expired temporarily on four occasions. Before P.L. 109-
91 was enacted in October 2005, Section 1925 had expired on September 30; before P.L.
109-171 was enacted in February 2006, it had expired on December 31; before P.L. 110-48
was enacted in July 2007, it had expired on June 30; and before P.L. 110-275 was enacted
in July 2008, it had expired on June 30.

CRS-6
coverage. To be eligible, federal statute specifies that families must have received
Medicaid under Section 1931 in at least three of the six months preceding their loss
of eligibility and have a dependent child in the home.10 During this initial six-month
period of TMA, states must provide families with the same amount, duration, and
scope of benefits offered under Section 1931 (that is, the Medicaid coverage the
family was previously receiving). However, states may opt to meet this requirement
by using Medicaid funds to pay a family’s premiums, deductibles, coinsurance, and
similar costs for employer-based health coverage (referred to in statute as “wrap-
around”). TMA may not be terminated during this initial six-month period so long
as the family continues to have a dependent child in the home.
Second Six-Month Period of Section 1925 TMA Coverage. During the
initial six-month period, states must notify families of the availability of up to six
additional months of TMA, for a total of up to 12 months of coverage. To maintain
eligibility for the second six-month period of TMA, families must report their gross
monthly earnings and child care costs in months four, seven, and 10 of their coverage
(that is, on a quarterly basis). In addition, TMA coverage may be terminated during
the second six-month period if any of the following apply:
! the family ceases to include a dependent child;
! the family’s average gross monthly earnings (less child care costs
necessary for employment) exceed 185% FPL (approximately
$2,647 for a family of three in 2007);
! the caretaker relative had no earnings in one or more of the three
previous months (unless the state determines that the lack of
earnings was due to an involuntary loss of employment, illness, or
other good cause);
! the family fails to file a quarterly report; or
! the family fails to pay any required premiums (should the state
choose to impose them).
TMA Enrollment and Expenditures
While states are required to submit data on their Medicaid programs to the
Department of Health and Human Services (HHS), they are not required to report
TMA enrollment and expenditures separately from other Medicaid program data. In
the summer of 2002, the Congressional Research Service (CRS) surveyed state
Medicaid directors on their TMA policies. As part of this survey, states were asked
to report, if available, monthly enrollment and expenditures for TMA for selected
months in 2001. These data are provided in Table 1, below.
As Table 1 illustrates, approximately 682,800 individuals in 32 states were
enrolled in TMA in December 2001. More recent data indicate that as of June 2006,
there were approximately 351,300 TMA enrollees in 15 states whose Medicaid
10 Families losing eligibility due to increased child or spousal support are eligible for a total
of four months of TMA if they received Medicaid under Section 1931 in at least three of the
six months preceding their loss of eligibility and have a dependent child in the home. There
are no additional eligibility requirements for support-related TMA.

CRS-7
enrollment accounted for about 18% of total U.S. Medicaid enrollment.11 Using
these figures, a very rough approximation of U.S. TMA enrollment in June 2006
would be 2.0 million. This rough estimate may be inaccurate if the states without
TMA data differ systematically from the 15 states with TMA data (e.g., if they have
a higher or lower percentage of TMA enrollees in their Medicaid populations).
The vast majority of TMA enrollees are eligible for work-related reasons, as
nearly all states indicated in the CRS survey that less than 10% of their TMA
population lost Medicaid eligibility under Section 1931 because of an increase in
child or spousal support collections. Table 1 also illustrates that expenditures for the
20 states reporting totaled $652.8 million in calendar year 2001.
Table 1. TMA Enrollment and Expenditures for
Selected Months in 2001
Monthly enrollment
Total expenditures
(in thousands)
(federal and state share, in millions)
June
Sept.
Dec.
June
Sept.
Dec.
Calendar
State
2001
2001
2001
2001
2001
2001
year 2001
Alabama
No data provided
Alaska
1.7
2.0
1.9
$0.4
$0.3
$0.4
$4.9
Arizonaa
43.3
16.9
27.2
NA
NA
NA
NA
Arkansasb
9.3
10.0
9.8
No data provided
Californiac
38.3
41.5
43.4
$4.2
$3.9
$4.2
$49.8
Colorado
No data provided
Connecticut
38.8
30.2
28.5
NA
NA
NA
NA
Delaware
12.8
14.4
16.1
$2.5
$2.7
$3.0
$36.6
District of Columbia
No data provided
Florida
88.6
85.9
86.4
$9.6
$9.3
$9.4
$111.1
Georgia
No data provided
Hawaii
4.4
4.3
4.6
$0.6
$0.6
$0.7
$1.9
Idahod
8.4
8.6
9.4
$1.6
$1.2
$1.7
$17.6
Illinois
No data provided
Indiana
26.8
28.1
30.1
NA
NA
NA
$61.4
Iowa
No data provided
Kansas
9.8
9.9
9.6
$1.1
$1.1
$1.5
$14.2
Kentuckye
15.9
17.6
18.8
$3.2
$3.0
$3.2
$39.7
Louisianaf
3.3
3.1
3.8
NA
NA
NA
NA
Maine
No data provided
Maryland
20.0
20.2
20.5
$3.7
$3.3
$3.6
$42.6
Massachusetts
No data provided
Michiganb
69.1
66.2
63.5
No data provided
Minnesotag
16.2
16.0
15.7
$0.9
$2.6
$2.8
$34.1
Mississippi
No data provided
Missourid
20.3
20.7
19.6
$3.4
$3.5
$3.0
NA
Montana
8.0
9.7
8.6
$1.2
$1.3
$1.2
$16.5
11 Kaiser Commission on Medicaid and the Uninsured, Medicaid Enrollment in 50 States:
June 2006 Data Update (October 2007), available at [http://www.kff.org/medicaid/upload/
7606_02.pdf].

CRS-8
Monthly enrollment
Total expenditures
(in thousands)
(federal and state share, in millions)
June
Sept.
Dec.
June
Sept.
Dec.
Calendar
State
2001
2001
2001
2001
2001
2001
year 2001
Nebraska
16.9
15.0
14.6
$1.7
$2.1
$2.9
$30.4
Nevada
8.5
9.9
10.2
$1.2
$1.3
$1.3
$17.2
New Hampshire
1.1
1.1
1.1
NA
NA
NA
NA
New Jersey
27.5
31.3
25.5
$3.1
$3.4
$2.8
$44.0
New Mexico
12.3
13.8
11.6
$2.3
$2.8
$2.4
$28.8
New York
No data provided
North Carolina
14.6
16.8
20.3
$1.5
$2.2
$2.2
$18.4
North Dakota
2.9
2.8
3.0
$0.3
NA
NA
NA
Ohio
No data provided
Oklahoma
No data provided
Oregon
28.4
28.1
28.2
$4.8
$4.4
$4.6
$56.1
Pennsylvania
66.8
67.6
68.4
NA
NA
NA
NA
Rhode Island
1.1
1.1
1.3
NA
NA
NA
NA
South Carolinab
48.4
57.3
62.2
No data provided
South Dakota
No data provided
Tennessee
No data provided
Texas
No data provided
Utah
14.2
11.7
8.9
$2.3
$2.1
$1.7
$24.2
Vermont
7.3
7.2
7.2
NA
NA
NA
NA
Virginia
No data provided
Washington
No data provided
West Virginia
No data provided
Wisconsin
No data provided
Wyoming
2.4
2.6
2.8
$0.3
$0.4
$0.3
$3.3
Total (number of
687.4
671.7
682.8
$50.1
$51.5
$53.1
$652.8
states with data)
(32)
(32)
(32)
(21)
(20)
(20)
(20)
Source: July 2002 Congressional Research Service (CRS) survey of state TMA policies.
Note: NA indicates that a specific piece of information was not available for the state to provide as
part of the CRS survey.
a. Arizona indicated in their survey response that, effective July 2001, they had increased their income
eligibility standard for Medicaid under Section 1931 Medicaid. Since this allowed many
families to retain Section 1931 coverage, TMA enrollment declined.
b. These states did not provide data as part of the CRS survey. June and September 2001 data for
these states are from Kaiser Commission on Medicaid and the Uninsured, Medicaid Program
Enrollment Data Update: September 2001 (June 2002). December 2001 data are from Kaiser
Commission on Medicaid and the Uninsured, Medicaid Enrollment in 50 States: December
2001 Data Update (Oct. 2002).
c. California indicated in its survey response that in 2000 it expanded its earnings disregards under
Section 1931, allowing families to remain eligible for longer periods of time and thus keeping
TMA enrollment low.
d. Monthly expenditure data are estimates provided by the state.
e. For Kentucky, Dec. enrollment represents 18,800 recipients (individuals) and 6,500 cases (families).
Since data on cases but not recipients were available for June and Sept., enrollment is estimated
using the ratio of recipients to cases in Dec.
f. For Louisiana, monthly enrollment numbers do not include child and spousal support cases.
g. Minnesota indicated that June 2001 expenditures are low due to the fact that capitation payments
were not made in that month.

CRS-9
State TMA Program Policies
As Table 1 illustrates, enrollment and expenditures for TMA vary tremendously
by state, due both to differences in state characteristics (such as population size) and
in Medicaid program design. As discussed above, Section 1925 of the Social
Security Act requires states to provide up to 12 months of TMA to certain families.
However, some states have made considerable efforts to expand and extend their
TMA programs. Expansions and extensions of state TMA programs have occurred
through a number of avenues within the states. These include waivers of federal
requirements (also referred to as Section 1115 waivers), Medicaid state plan
amendments that expand eligibility under Section 1931 through modified income and
resource eligibility standards or other means, and the use of state-only funds.
The July 2002 CRS survey asked states to respond to a number of questions
designed to determine the extent to which states have extended or expanded TMA
coverage. For example, several states lengthen the period of Medicaid coverage by
providing a 12-month disregard of all earned income at the point when an increase
in income jeopardizes their Medicaid eligibility under Section 1931. This disregard
allows the family to retain Section 1931 Medicaid eligibility for 12 months. After
the disregard is exhausted at the end of this 12-month period, families are then
eligible for up to 12 months of TMA. Other states extend TMA coverage through the
use of state-only funds.
States also use various options to modify the “three of six months” requirement
for TMA. As previously discussed, federal statute requires that individuals receive
Medicaid under Section 1931 in three of the six months immediately preceding their
loss of eligibility in order to qualify for TMA. However, some states will effectively
bypass this rule by using earned income disregards. For example, a family whose
earnings are low enough to qualify for Section 1931 Medicaid may see an increase
in earnings immediately (in months two or three) after receiving coverage. This
increase in earnings may mean that they no longer qualify for Section 1931 Medicaid,
and they would not qualify for TMA because they did not receive Medicaid in three
of the immediately preceding six months. Some states would allow this family to
remain eligible for Medicaid by disregarding all earnings for two months, and as a
result, also meet the “three of six months” requirement for TMA. Other states
conduct “look-back” reviews to provide retroactively coverage to low-income
families who would have qualified under Section 1931 Medicaid had they applied.
Table 2, below, summarizes state responses to the CRS TMA survey, which
reflects state policies in effect as of July 1, 2002. Detailed state-by-state information
is available in the Appendix.

CRS-10
Table 2. Overview of State TMA Policies
Policy
Number of states
Allows self-declaration of earnings and/or child care costs
20 (out of 51)
Does not require reporting of earnings or child care costs on a
quarterly basis (in months four, seven, and 10)a
19 (out of 46)
Modifies the “three of six months” requirement
17 (out of 51)
Provides Medicaid “wrap-around” coveragea b
13 (out of 46)
Provides more than 12 months of TMA coverage
12 (out of 51)
Imposes a premium in the second six-month period of TMAa
3 (out of 46)
Limits benefits provided in the second six-month period of TMAa
0 (out of 46)
Source: July 2002 Congressional Research Service (CRS) survey of state TMA policies and Kaiser
Commission on Medicaid and the Uninsured, Can Medicaid Work for Low-Income Working Families?
(Apr. 2002).
Note: Five states (Arkansas, Michigan, Ohio, Oklahoma, and West Virginia) did not respond to the
CRS survey. Information for these states was taken from the Kaiser report, reflecting policies in place
as of June 2001. Policies in the remaining states are those as of July 1, 2002. For state-specific
information, see Table A-1, below.
a. Based on responses from the District of Columbia and 45 states that completed the CRS survey,
as comparable information for the remaining five states was not available from the Kaiser report.
b. “Wrap-around” refers to the state option to use Medicaid funds to pay a family’s premiums,
deductibles, coinsurance, and similar costs for employer-based health coverage.
Legislative Developments
Since 2001, Section TMA requirements under Section 1925 of the Social
Security Act have been funded by a series of short-term extensions, most recently
through June 30, 2009 (P.L. 110-275). In the 109th Congress, a provision to modify
Section 1925 TMA was included in a welfare reauthorization bill that saw action, but
was not adopted. In the 110th Congress, a provision to modify and extend Section
1925 TMA for four years was included in a State Children’s Health Insurance
Program (SCHIP) reauthorization bill passed by the House (H.R. 3162), but not in
the SCHIP bills that were vetoed (H.R. 976 and H.R. 3963).
TMA and Welfare Reauthorization. Early in the 109th Congress, the House
Ways and Means Subcommittee on Human Resources favorably reported H.R. 240,
a welfare reauthorization bill that would have extended TMA under Section 1925
through FY2006 with no statutory changes. The Senate Finance Committee
approved its own welfare reauthorization measure (S. 667, discussed below) that
would have modified and extended TMA through FY2010. Ultimately, the Deficit
Reduction Act of 2005 (P.L. 109-171) extended TMA through calendar year 2006
and provided a scaled-back version of welfare reauthorization through FY2010.12
12 See CRS Report RL33418, Welfare Reauthorization in the 109th Congress: An Overview,
by Gene Falk, Melinda Gish, and Carmen Solomon-Fears.

CRS-11
Although welfare reauthorization was achieved through other means, S. 667 is
noteworthy in that it would have provided a five-year extension of Section 1925
TMA and given states statutory options for modifying their TMA policies (as
described earlier and shown in Table 2, a number of states have already implemented
changes through other avenues). Under S. 667, states could have opted to:
! provide continuous eligibility for TMA for 12 months by waiving
quarterly reporting requirements;
! extend coverage for an additional 12 months (for a total of up to 24
months of TMA) so long as a family’s gross monthly earnings (less
necessary child care costs) remained below 185% FPL;
! waive the requirement that a family must have received Section
1931 Medicaid in three of the previous six months to qualify for
TMA.
S. 667 also would have allowed states to meet Section 1925 TMA requirements
by extending Medicaid coverage under Section 1931 to families whose gross monthly
earnings (less necessary child care costs) are at or below a level that is at least 185%
FPL. In a state choosing this option, families whose earnings exceed the eligibility
standard for Section 1931 Medicaid would receive no further medical assistance.
Families whose earnings remain at or below the state’s eligibility standard (at least
185% FPL) would continue to receive Section 1931 Medicaid.
In effect, this provision would have prevented states with relatively high Section
1931 eligibility standards from having to provide the automatic six months of TMA
coverage outlined in Section 1925 to families whose earnings exceed those relatively
high standards. It would not have allowed states with lower (less than 185% FPL)
Section 1931 eligibility standards to opt out of providing the automatic six months
of TMA (even in cases where family earnings exceed 185% FPL), and it still would
have required them to provide up to six additional months of TMA to families whose
earnings remain at or below 185% FPL.
In addition, S. 667 would have required states to collect information on average
monthly TMA enrollment and participation rates for adults and children, to make the
information publicly available, and to and submit the information to the Secretary of
HHS. In turn, the Secretary of HHS would submit annual reports to Congress
concerning these rates. The bill also would have required administrators within HHS
to work together to develop guidance or other technical assistance for states regarding
best practices in guaranteeing access to TMA. Finally, the bill would have required
states to notify all families whose TANF benefits are terminated of their ongoing
eligibility for Medicaid benefits or, if a family is no longer eligible for Medicaid, to
supply a one-page notification describing eligibility and how to apply for Medicaid
and SCHIP coverage.
Recent Action. Legislation to temporarily extend Section 1925 TMA through
June 30, 2009, was enacted at the end of 2007 (P.L. 110-275). Although reserve
funds for TMA have been included in recent budget resolutions, their deficit-neutral

CRS-12
status has meant that offsets (or a waiver of budget rules) might be required for any
extension.13
Although a provision to modify and extend TMA for four years was included
in an SCHIP reauthorization bill passed by the House in 2007 (H.R. 3162),14 it was
not included in the SCHIP bills that were vetoed (H.R. 976 and H.R. 3963). Under
H.R. 3162, states could opt to treat any reference to a 6-month period (or 6 months)
as a reference to a 12-month period (or 12 months) for purposes of the initial
eligibility period for TMA, in which case the additional 6-month extension would not
apply; could opt to waive the requirement that a family have received Medicaid in at
least 3 of the last 6 months in order to qualify; and would be required to collect and
submit to the Secretary of HHS (and make publicly available) information on average
monthly enrollment and participation rates for adults and children under work-related
TMA, and on the number and percentage of children who become ineligible for
work-related TMA and whose eligibility is continued under another Medicaid
eligibility category or who are enrolled in SCHIP (in turn, the Secretary would submit
annual reports to Congress concerning these rates).
Discussion
Research shows that low-income individuals are more likely to be without
health insurance than those with higher incomes. In 2006, 34% of people under age
65 with family incomes below the federal poverty threshold went without health
insurance, compared to 12% of individuals with incomes at least two times the
poverty threshold. Among low-income individuals who are working, health care
coverage is not always available or affordable. Only 18% of people under age 65
with incomes below the poverty threshold received health care coverage through
employment in 2006, compared to 79% of people with incomes of at least two times
the poverty threshold.15
For low-income families, TMA continues health care coverage on a temporary
basis when they might otherwise lose eligibility for Medicaid due to their earned
income, hours of work, or child or spousal support. This continuation is especially
valuable for parents, since income eligibility limits for Medicaid coverage of adults
who are not pregnant, disabled, or elderly are quite low in some states (as shown in
Figure 1), and since private health insurance may be unavailable or unaffordable.
Although Congress has not yet reached consensus on the future of TMA under
Section 1925, the Government Accountability Office (GAO) and others assert that
13 Until 2005 (ending with P.L. 109-19), short-term extensions of Section 1925 TMA were
packaged with TANF and related programs and did not include offsets. Since then,
extensions have sometimes occurred through stand-alone legislation with offsets (P.L. 109-
91, P.L. 110-48, P.L. 110-90) and sometimes been packaged in broader legislation (P.L. 109-
171, P.L. 109-432, P.L. 110-173, P.L. 110-275).
14 See CRS Report RL34129, Medicaid and SCHIP Provisions in H.R. 3162, S. 1893/H.R.
976, and Agreement, by Evelyne P. Baumrucker et al.
15 See CRS Report 96-891, Health Insurance Coverage: Characteristics of the Insured and
Uninsured Populations in 2006, by Chris L. Peterson and April Grady.

CRS-13
TMA can play an important role in supporting low-income families, especially those
who are transitioning from welfare to work.16
However, some have expressed concern that there are families eligible for TMA
who do not enroll, and that programmatic aspects of TMA create barriers that prevent
individuals from continuing to receive TMA once they become eligible. For
example, GAO noted in 1999 that quarterly income reporting requirements for TMA
could pose barriers to family receipt of TMA and recommended that the Congress
consider allowing states to lessen or eliminate these requirements.17
16 See U.S. Government Accountability Office, Medicaid: Transitional Coverage Can Help
Families Move from Welfare to Work, testimony of David M. Walker before the
Subcommittee on Health, Committee on Energy and Commerce, House of Representatives,
GAO-02-679T (April 23, 2002).
17 U.S. Government Accountability Office, Medicaid Enrollment: Amid Declines, State
Efforts to Ensure Coverage After Welfare Reform Vary, GAO/HEHS-99-163 (September
1999).

CRS-14
Appendix. State TMA Policies
Table A-1, below, provides state responses to the CRS survey on state TMA
policies in effect as of July 1, 2002. This information was collected using a survey
distributed by CRS to state Medicaid directors. Five states did not respond to the
CRS survey. When available, information obtained elsewhere for these states
(Arkansas, Michigan, Ohio, Oklahoma, and West Virginia) reflects policies in place
as of June 2001.18
Table A-1 provides information by state on the following:
! length of TMA coverage;
! does the state modify the “three of six months” requirement;
! has the state changed the reporting requirements;
! does the state allow self-declaration of earnings and child care costs;
! does the state impose a premium in the second six-month period of
TMA coverage;
! does the state limit benefits provided in the second six-month period
of TMA coverage;
! does the state provide Medicaid “wrap-around” coverage;
! any state-specific notes.
Because this information was collected using a survey administered to the states,
there are limitations to the data. Where possible, state-specific notes were included
to provide more detail on how the state has implemented its TMA policies.
However, aspects of the state’s TMA program may be not represented in the table
given the variation in how states have implemented these policies and the flexibility
states have to design their programs.
18 See Kaiser, Can Medicaid Work? (April 2002).

CRS-15
Table A-1. Responses to the CRS Survey on TMA Policies, by State
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Alabama
12 months No
No
No
No
No
No
Alaska
12 months No
No
No
No
No
No
Caseworkers may issue retroactively coverage
under Section 1931 Medicaid (to meet the three
out of six months requirement for TMA) to
families who would have been eligible for
Medicaid had they applied, although this
practice is not common among caseworkers.
Arizona
24 months No
Yes
No
No
No
No
The state conducts eligibility reviews every six
months for TMA under a federal waiver (which
expired 10/31/02). Until April 2002, Arizona had
a state plan amendment in place to drop the three
out of six months requirement.
Arkansas
12 months No
Not available
Income
Not available
Not available
Not available
Arkansas uses retroactive Medicaid eligibility to
ensure that families meet the “three of six
months” requirement for TMA. AR also allows
self-declaration of income upon redetermination
to ensure that families leaving cash assistance
for work can more easily access continued
Medicaid coverage or TMA.

CRS-16
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
California
24 months No
No
No
No
No
No
California provides the additional 12 months (for
a total of 24 months) of TMA to persons 19 and
older using state-only funds. There are no
reporting requirements imposed by the state for
the additional 12 months (children are covered
by the state’s Child Health Insurance Program).
Colorado
12 months No
No
Child care
No
No
No
Connecticut
24 months Yes
No
Yes
No
No
No
Connecticut, through a Medicaid state plan
amendment, extends TMA coverage to 24
months by disregarding all income for 12 months
from the date a family would have become
ineligible for Section 1931 Medicaid (provided
the family has earnings at that time or becomes
employed within six months of ineligibility). For
families receiving benefits under Section 1931
that do not have earned income and become
ineligible due to increased child support, all
income is disregarded for 20 months. These
disregards have the effect of “dropping” the three
out of six months requirement for TMA.
Connecticut allows self-declaration of earnings
and child care costs unless there is reason to
believe a report is inaccurate or incomplete.

CRS-17
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Delaware
24 months Yes
Yes
Child care
No
No
No
Until 10/01/02, Delaware had a waiver to provide
an additional 12 months of TMA. Delaware has
a state plan amendment in place to “drop” the
three out of six months requirement by
disregarding earned income in the 2nd and 3rd
months of Section 1931 Medicaid coverage.
Delaware has an 1115 waiver (which expires
12/03) in place to drop TMA reporting
requirements (families are instead required to
report changes within 10 days of occurrence).
District of
12 months No
Yes
NA
Does not apply. No
No
Since D.C. covers families up to 200% FPL
Columbia
under their SCHIP and Medicaid expansion
programs, those who qualify for the second six
months of TMA are certified for continuing
benefits through those programs. Therefore, the
column related to premium imposed does not
apply to D.C. as the state does not enroll families
in the second six months of TMA.
Florida
12 months No
No
Yes
No
No
No
Georgia
12 months No
No
Yes
No
No
No
Until 7/02, Georgia had a state plan amendment
in place to provide an additional 12 months of
coverage with an income disregard under Section
1931 Medicaid.

CRS-18
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Hawaii
12 months No
No
No
No
No
No
Hawaii implemented its Section 1931 Medicaid
category in November 2001. Prior to that date,
only families leaving cash assistance qualified for
TMA.
Idaho
12 months No
Yes
Yes
No
No
Yes
Idaho requires families to report changes in their
income and child care costs. However, if the state
does not receive a response to a request for
quarterly information and it has no other
indication of a change, TMA is continued.
Illinois
12 months Yes
No
Yes
No
No
No
Illinois provides eight months of TMA (as
opposed to four months) to families who lose
Section 1931 Medicaid eligibility due to
increased child or spousal support with state-only
funds. Illinois also uses state-only funds to
provide TMA coverage to families who do not
meet the three out six months requirement.
Indiana
12 months No
No
No
No
No
No
Iowa
12 months No
No
No
No
No
No
Kansas
12 months No
Yes
NA
No
No
No
Kansas has a state plan amendment to disregard
all income in excess of 185% FPL to allow
families to receive 12 months of continuous
TMA coverage with no reporting requirements.

CRS-19
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Kentucky
12 months Yes
No
No
No
No
No
Kentucky provides an earned income disregard
for up to two months under Section 1931
Medicaid for families that do not meet the three
out of six months requirement for TMA.
Louisiana
12 months No
No
No
No
No
No
Maine
12 months Yes
No
No
Yes
No
Yes
Premium imposed after initial six months is 3%
of net family monthly income.
Maryland
12 months No
Yes
Yes
No
No
No
For Medicaid-only families, Maryland has a state
plan amendment in place to drop the three out of
six months requirement for TMA by disregarding
earned income in the 2nd and 3rd months of
Section 1931 coverage. There are no formal
reporting requirements for TMA families. The
local department of social services (whose
workers have access to various databases to
verify earnings) decides what is necessary to
verify continuing eligibility.
Massachusetts
12 months Yes
Yes
NA
No
No
No
The state implemented an 1115 waiver in 1997
(renewed for three additional years effective July
2002) to provide 12 months of continuous TMA
coverage with no reporting requirements to
families who lose Section 1931 Medicaid
eligibility due to an increase in earned income.
The waiver also allows Massachusetts to drop the
three out of six months requirement for TMA.

CRS-20
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Michigan
12 months Yes
Not available No
Not available
Not available
Not available
State-funded transitional coverage is available
for 12 months for Section 1931 families who find
work quickly and do not meet the “three of six
months” rule.
Minnesota
12 months No
No
Yes
No
No
No
Mississippi
12 months No
Yes
NA
No
No
Yes
Mississippi has a state plan amendment in place
to provide 12 months of continuous TMA
coverage with no reporting requirements. The
state also disregards earnings in the month in
which a family becomes ineligible for Section
1931 Medicaid to ensure a full 12 months of
TMA (for families losing eligibility in their 3rd
month of Section 1931 coverage, this disregard
also helps to meet the three out of six months
requirement for TMA). Although Medicaid
wrap-around coverage is available in Mississippi,
no TMA families were covered under the option
at the time of the survey.

CRS-21
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Missouri
24 months No
No
Yes
No
No
Yes
Under an 1115 waiver (which expires 12/31/02),
Missouri provides the additional 12 months of
TMA to uninsured caretakers who meet
eligibility requirements (net income less than
100% FPL and a child covered by Medicaid or
SCHIP) when the initial 12 months of TMA is
exhausted. They must report changes in income
and employment as they occur, but quarterly
reports are not required during the additional 12-
month period. Prior to 7/02, the state provided 24
additional months of TMA to uninsured
caretakers with gross incomes below 300% FPL.
Although Missouri has not officially dropped the
three out of six months requirement for TMA,
caseworkers may issue retroactive Section 1931
coverage to families who would have been
eligible had they applied.
Montana
12 months No
No
No
No
No
No
Until July 2002, Montana had a federal waiver to
drop the three out of six months requirement and
allow 12 months of coverage for families
receiving TMA due to increased child or spousal
support.

CRS-22
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Nebraska
24 months No
No
Child care
Yes
No
No
Nebraska’s 1115 waiver (which allowed the state
to provide an additional 12 months of TMA)
expired 7/1/02. The state did not apply for
renewal and is considering other ways to
continue the extended coverage. After the initial
six months of TMA, families with income from
100% to 185% FPL must pay a monthly
premium that ranges from $30 to $137 per
month.
Nevada
12 months No
No
Yes
No
No
Yes
New
12 months No
No
No
No
No
No
Hampshire
New Jersey
24 months Yes
Yes
No
No
No
No
New Mexico
12 months Yes
Yes
NA
No
No
No
New Mexico has a state plan amendment in place
to allow 12 months of continuous TMA coverage
with no reporting requirements and to disregard
all earned income in the 2nd and 3rd months of
Section 1931 Medicaid coverage if a family
exceeds the eligibility standard.

CRS-23
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
New York
12 months No
Yes
Child care
No
No
Yes
Two quarterly reports (“mailers”) are sent, one in
the 3rd month and one in the 6th month. If a
family qualifies based on the first report, TMA is
extended until the end of month 10 (if they report
but do not qualify, TMA is extended to the end
of month seven). If the family qualifies based on
the second report, TMA is extended until the end
of month 12. Proof of earnings in the previous
four weeks is required with each report.
North Carolina 24 months Yes
No
Yes
No
No
No
North Carolina has a state plan amendment in
place to provide additional coverage by
disregarding earned income for 12 months for
families that would otherwise become ineligible
for Section 1931 Medicaid due to earnings. This
has the effect of dropping the three out of six
months requirement for TMA for families
receiving the disregard.
North Dakota
12 months No
Yes
No
No
No
Yes
Reports are required only in months seven and
10, and this effectively extends the initial period
of TMA through month seven.
Ohio
12 months No
Not available No
Not available
Not available
Not available
Oklahoma
12 months No
Not available Income
Not available
Not available
Not available
Oregon
12 months Yes
Yes
NA
No
No
Yes
CMS is currently advising Oregon on how to
modify its Medicaid state plan to reflect the
state’s TMA policies.

CRS-24
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Pennsylvania
12 months No
No
No
No
No
Yes
Rhode Island
18 months Yes
Yes
No
No
No
No
Under Rhode Island’s waiver, the additional six
months of TMA (for a total of 18 months) is
provided to former cash assistance families on
TMA due to employment- related loss of Section
1931 Medicaid eligibility. Families report
earnings and child care costs in months seven
and 13.
South Carolina 12 months Yes
Yes
No
No
No
No
For families losing Section 1931 Medicaid
eligibility due to employment, coverage is
extended by disregarding earned income for 12
months from the date a family would have
become ineligible. This has the effect of
dropping the three out of six months requirement
for TMA for families receiving the disregard.
The state currently requires families to report
earnings and child care costs only in month four.
If they meet eligibility requirements, they are
granted the second six months of TMA. When
the state’s ongoing departmental and systems
reorganization is complete, SC plans to send out
reports in months seven and 10 as well.
South Dakota
12 months No
No
No
No
No
No

CRS-25
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Tennessee
18 months Yes
Yes
NA
No
No
No
The extension of TMA to 18 months is part of a
federal waiver which expires 8/2007. TMA
coverage is extended to anyone who has at least
one month of TANF eligibility and individuals
who lose Medicaid eligibility under Section
1931.
Texas
12 months Yes
No
Yes
No
No
Yes
Currently, only TANF families receive Section
1931 Medicaid and a four-month earned income
disregard designed to meet the three out of six
months requirement for TMA. Medicaid-only
families receive coverage under the state’s
medically needy program and are eligible for up
to 12 months of transitional coverage if they
become ineligible due to earnings. These families
will also receive the four-month disregard when
the state computer system is updated to include
them in the Section 1931 category (this change
should be in place by November 2002, with
state-wide implementation taking up to a year
and a half).

CRS-26
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Utah
24 months Yes
Yes
No
No
No
Yes
Utah has a state plan amendment in place to
extend coverage by disregarding earned income
for up to 12 months (two six-month periods,
conditioned on total gross earned income
remaining below 185% FPL) from the date a
family would have become ineligible for Section
1931 Medicaid due to earnings. This has the
effect of dropping the three out of six months
requirement for TMA for families receiving the
disregard. Reports are required in months seven
and 10 of TMA. Although a month 4 report is
sent out, TMA is not terminated if the family
does not respond (this effectively extends the
initial period of coverage through month seven).
Vermont
36 months No
No
Yes
No
No
No
Vermont provides an additional 24 months (for a
total of 36 months). This was originally
provided under a federal waiver (expired 7/1/01),
but continued under their state plan by making
changes to eligibility under Section 1931. TMA
coverage is extended to pregnant women,
children under 18 and their caretaker relatives, so
long as these groups meet the income
requirements.
Virginia
12 months No
No
No
No
No
Yes

CRS-27
Modifies the
Allows self-
Limits
three out of
Changed
declaration of
Premium
benefits
Provides
Length of
six months
reporting
earnings
imposed in the
provided in
Medicaid “wrap-
TMA
require-
require-
and/or child
second six-
the second six
around”
State
coverage
ment
ments
care costs
month period month period
coverage
State-specific notes
Washington
12 months Yes
Yes
Yes
Yes
No
Yes
Washington has a state plan amendment in place
to drop the month 10 reporting requirement and
to disregard an income increase in the 2nd and
3rd months of Section 1931 Medicaid coverage
to help families meet the three out of six months
requirement for TMA. After the initial six
months of TMA, families whose three-month
average earnings (less child care) exceed 100%
FPL must pay a monthly premium equal to 1% of
that amount. Premiums for month seven of TMA
are due by the end of month five.
West Virginia
12 months No
Not available No
Not available
Not available
Not available
Wisconsin
12 months No
Yes
No
No
No
No
Wyoming
12 months No
No
Yes
No
No
No
Source: July 2002 CRS survey of state TMA policies and Kaiser Commission on Medicaid and the Uninsured, Can Medicaid Work for Low-Income Working Families? (Apr. 2002).
Note: NA for self-declaration of earnings and child care costs indicates that this column is not applicable because the state does not require families to report earnings and child care
costs (that is, the state has changed its reporting requirements). States in italics (Arkansas, Michigan, Ohio, Oklahoma, and West Virginia) did not respond to the CRS survey.
Information for these states was taken from the Kaiser report, reflecting policies in place as of June 2001. Policies in the remaining states are those as of July 1, 2002.