THE MEDICAID program, designed to provide access to health care for the nation's poor, fails to provide coverage for more than 10.9 million individuals with annual income below the federal poverty level.1 The gaps in coverage of the poor and the inequities of the current categorical eligibility system have focused interest on Medicaid reform. Recent federal initiatives have incrementally expanded Medicaid eligibility, particularly for poor pregnant women and young children. For proponents of more comprehensive Medicaid reform, however, the cost of expanding the program is an important obstacle. The legislative feasibility of any proposal to extend coverage depends critically on the level of new public sector spending required.
In previous work, we estimated the fiscal impact of a proposal to expand Medicaid eligibility to cover all persons with annual income below the federal poverty level. This proposal, advanced by the Health Policy Agenda for the American People,2 would