Jeffrey Wade
Medicaid is a major source of funding for the US healthcare system, covering 19% of all healthcare spending and 61% of total spending on long-term care. It is a key source of coverage for certain populations, including children, adults in poverty, and racial minorities. TANF, or Temporary Assistance for Needy Families, is a time-limited program that provides grants to states to support families when parents or other relatives cannot meet their basic needs. While eligibility for Medicaid was previously linked to eligibility for TANF, the two are now separate. Families leaving TANF may still be eligible for Medicaid, and studies have been conducted to understand the transition between the two programs. Medicaid enrollees are not currently subject to work requirements, but policymakers are considering proposals to change this.
| Characteristics | Values |
|---|---|
| Full Form | TANF stands for Temporary Assistance for Needy Families |
| Type of Program | TANF is a time-limited program |
| Purpose | TANF helps families when parents or other relatives cannot provide for the family's basic needs |
| Funding | The federal government provides grants to states to run the TANF program |
| Administration | States carry out their own programs and decide on things like design, type and amount of assistance payments, range of services to be provided, and rules for determining eligibility |
| Coverage | TANF is a welfare or cash assistance program for low-income families |
| Link with Medicaid | There is no formal link between TANF and Medicaid, but some TANF-eligibles, especially children, are likely to qualify for Medicaid |
| Transitional Medical Assistance (TMA) | TMA is a provision that provides six to 12 months of transitional medical assistance for families losing Medicaid coverage for work-related reasons |
| TMA Expiration | The TMA provision expired on December 31, 2005, but was reinstated and extended through 2006 under the Deficit Reduction Act of 2005 |
| Medicaid Characteristics | Medicaid provides funding for the US healthcare system, covering 19% of healthcare and hospital spending, and is a key source of coverage for certain populations, including children, adults in poverty, and racial and ethnic minorities |
| Medicaid Work Requirements | There are proposals to condition Medicaid eligibility on meeting work requirements, but this may not reduce the need for health coverage through Medicaid as many enrollees' jobs do not offer health insurance |
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What You'll Learn
Medicaid eligibility is not tied to TANF benefits
Medicaid is a health insurance coverage program that provides health insurance to eligible low-income families and individuals. TANF, on the other hand, stands for Temporary Assistance for Needy Families and is a time-limited program that provides cash assistance to families when parents or other relatives cannot meet the family's basic needs.
Historically, eligibility for Medicaid was linked to eligibility for cash assistance programs such as the old Aid to Families with Dependent Children (AFDC) program. However, since the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, eligibility for Medicaid and eligibility for cash assistance have been "delinked". This means that eligibility for Medicaid is not tied to eligibility for or receipt of TANF benefits. In other words, Medicaid eligibility does not automatically attach to eligibility for TANF.
Low-income children and families leaving or diverted from entering TANF are often still eligible for Medicaid. Families with dependent children may qualify for Medicaid based on family income and state rules. Additionally, poor children and pregnant women may qualify for Medicaid under poverty-related eligibility groups. Furthermore, children may be covered under the State Children's Health Insurance Programs (SCHIP), which may be an expansion of a state Medicaid program or a separate program.
Despite the delinking of Medicaid and TANF eligibility, some families leaving or diverted from TANF have inappropriately lost out on Medicaid coverage. This may be due to states not having fully developed or implemented adequate policies and procedures to ensure that families denied, diverted from, or terminated from TANF-funded benefits are fully considered for Medicaid benefits for which they may qualify. To address this issue, the Department of Health and Human Services (HHS) has issued guidance to states, conducted on-site reviews of Medicaid/TANF eligibility and enrollment systems, and is working with states to identify strategies to ensure Medicaid coverage for all eligible children and families.
While Medicaid eligibility is not tied to TANF benefits, there are some connections between the two programs. For example, both programs are often administered by the same state or local agency, with an integrated database. Additionally, state Medicaid programs can play a role in supporting work by providing referrals to job search or training programs, similar to TANF's purpose of promoting job preparation. However, unlike TANF, Medicaid does not have an existing infrastructure of work support programs.
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TANF is a time-limited program for families in need
TANF stands for Temporary Assistance for Needy Families. It is a time-limited program that provides assistance to families in need, particularly when parents or guardians are unable to provide for their family's basic needs. The program is designed to be temporary, with a focus on helping families become self-sufficient. TANF emphasizes the welfare-to-work principle, requiring recipients to find employment within a certain time frame. This includes single parents mandated to work a minimum of 30 hours per week, with a slight increase for two-parent families.
The federal government provides grants to states to administer their own TANF programs. States have a significant degree of flexibility in designing their programs, determining eligibility criteria, and setting benefit levels. This includes defining what constitutes a "needy" family and deciding on the type and amount of assistance provided. States can also choose to offer non-countable activities, such as education and training, that do not count towards the overall time limit of the program. However, states must adhere to certain federal guidelines, such as a five-year lifetime limit for receiving assistance and work requirements for beneficiaries.
TANF's time-limited nature aims to encourage self-sufficiency and reduce long-term dependence on government aid. This approach is reflected in the program's goals, which include promoting job preparation and employment, reducing out-of-wedlock pregnancies, and encouraging the formation of two-parent families. While the time limit provides an incentive for beneficiaries to actively seek employment and improve their situation, it has also been criticized for potentially leaving families without the necessary support to meet their basic needs.
The time limits for TANF vary across states, with some states imposing stricter limits than others. While the federal government sets a maximum time limit of 60 months (five years) for families with adult recipients, states have some flexibility to extend this limit for a small percentage of families facing hardship. Additionally, there is no federal time limit imposed on "child-only" families or those receiving assistance funded entirely by state contributions.
TANF's time-limited nature has been a subject of debate, with some arguing that it successfully promotes employment and self-sufficiency, while others criticize its potential negative impact on vulnerable families. Studies have shown that employment among TANF recipients increased initially but declined in later years, with some beneficiaries facing challenges due to time limits and sanctions. To address these concerns, states have been encouraged to reinvest TANF funds into basic assistance, increase benefit levels, and remove punitive policies that may hinder families from receiving much-needed support.
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Medicaid work requirements and exemptions
Medicaid is a state and federal government-funded health insurance program for over 70 million low-income or disabled Americans. The primary qualification is that individuals must earn below a certain income level.
Work Requirements
Congress and some state governments are considering imposing work requirements on people who get their health coverage through Medicaid. Thirteen states were given approval to add work requirements during the first Trump Administration, but courts halted those plans. Now that Trump is back in the White House, some states are trying to implement these requirements again.
Proponents of work requirements argue that the policy will motivate people to get jobs and lift them out of poverty. However, opponents argue that these requirements will not lead to more people working, but rather to a widespread loss of coverage for the most vulnerable Americans.
In Arkansas, work requirements were in effect from June 2018 through March 2019. More than 18,000 people lost coverage, primarily due to failure to regularly report work status or document eligibility for an exemption. A study by Harvard economists found little impact on employment levels – the target population averaged 17.1 hours of work per week in Arkansas, compared with 18.2 hours in other similar states.
Exemptions
Some existing and pending public benefit work reporting requirement policies attempt to exempt people who are actively participating in a drug or alcohol addiction treatment program, such as the Supplemental Nutrition Assistance Program (SNAP). However, the federal SNAP exemption is limited to individuals in private, non-profit treatment facilities and community mental health centers, which make up less than half of the substance use disorder treatment facilities in the US.
Other exemptions from health coverage include:
- Financial hardship or other circumstances that prevented someone from getting insurance
- Homelessness
- Eviction or foreclosure
- Receiving a utility shut-off notice
- Experiencing domestic violence
- Death of a family member
- Fire, flood, or other natural or human-caused disasters that caused property damage
- Bankruptcy
- Unpaid medical expenses that resulted in substantial debt
- Unexpected increases in necessary expenses due to caring for an ill, disabled, or aging family member
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Medicaid and TANF benefits are often linked in delivery
Medicaid and TANF (Temporary Assistance for Needy Families) are two separate programs that can sometimes be linked in terms of eligibility and delivery. TANF is a federally funded, state-run program that provides temporary financial assistance to families in need. The federal government provides grants to states, which then carry out their own programs and decide on the type and amount of assistance, the range of services provided, and the rules for determining eligibility. On the other hand, Medicaid is a health insurance program that provides medical and long-term care services to eligible individuals, including those from low-income families.
While Medicaid and TANF are distinct programs with different purposes, there can be some overlap in their beneficiaries. For example, low-income children and families who leave or are diverted from TANF may still be eligible for Medicaid. This is because Medicaid eligibility is often based on family income and state rules, which may align with the criteria for receiving TANF assistance. Additionally, some states have programs that provide supported employment services to people with disabilities, which may be relevant to both Medicaid and TANF enrollees.
The linkage between Medicaid and TANF can be seen in ASPE-funded studies that track Medicaid enrollment for TANF "leavers" or those who are diverted from entering the program. These studies benefit from the fact that Medicaid and TANF are often administered by the same state or local agency, allowing for the integration of administrative and enrollment data. This enables researchers to understand the health insurance coverage of families transitioning from welfare to self-sufficiency.
However, it is important to note that eligibility for Medicaid and TANF has been "delinked" since the enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. This means that receiving TANF benefits does not automatically qualify an individual for Medicaid, and vice versa. The delinking of these programs recognizes the distinct purposes of each program and allows for more flexibility in meeting the diverse needs of low-income families.
In recent years, there have been proposals to introduce work requirements for Medicaid enrollees, similar to those in the TANF program. These proposals aim to encourage employment among beneficiaries and reduce dependence on government assistance. However, critics argue that such requirements may adversely affect individuals with disabilities or other barriers to employment, such as limited education or lack of access to child care. As of 2018, details regarding exemptions and implementation of these work requirements for Medicaid were still unclear.
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Medicaid covers 1 in 5 people in the US
Medicaid is a federal-state health insurance program that provides coverage for low-income individuals, including children, pregnant women, adults, seniors, and people with disabilities. In the United States, Medicaid covers around 1 in 5 people, or 21% of the population, as of February 2025. This percentage varies across states, ranging from 11% in Utah to 34% in New Mexico. The variation in coverage rates is influenced by factors such as state income levels and the availability of employer-sponsored health insurance.
Medicaid is a crucial source of coverage for specific populations. In 2023, it covered nearly 4 in 10 children, over 8 in 10 children in poverty, 1 in 6 adults, and almost half of adults in poverty. It is particularly important for Black, Hispanic, and American Indian or Alaska Native (AIAN) children and adults, who have higher coverage rates under Medicaid relative to their White counterparts. Additionally, Medicaid covers more than 1 in 4 adults ages 19-64 with disabilities and nearly half of children with special healthcare needs.
Medicaid also provides comprehensive benefits for children, known as Early Periodic Screening Diagnosis and Treatment (EPSDT) services. It covers non-emergency medical transportation, helping enrollees get to their appointments. Furthermore, it plays a significant role in supporting housing and work. State Medicaid programs can provide referrals to job search or training programs, and some states offer supported employment services for people with disabilities.
Medicaid spending totaled $880 billion in FY 2023, with 69% coming from federal spending. Spending per enrollee varies based on eligibility groups and is typically higher for seniors and individuals with disabilities due to more complex healthcare needs and higher rates of chronic conditions. Medicaid is a major source of funding for the US healthcare system, covering 19% of all healthcare spending and hospital spending.
TANF, or Temporary Assistance for Needy Families, is a separate program from Medicaid. It is a time-limited program that provides assistance to families when parents or relatives cannot meet the family's basic needs. While eligibility for Medicaid and TANF benefits used to be linked, they are now separate. Families transitioning from TANF may still be eligible for Medicaid, and the Department of Health and Human Services (HHS) works to ensure Medicaid coverage for all eligible children.
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Frequently asked questions
TANF stands for Temporary Assistance for Needy Families. It is a time-limited program that provides grants to states to help families when parents or other relatives cannot provide for their basic needs.
Medicaid is a major source of funding for the US healthcare system, covering 19% of all healthcare spending. It is a key source of coverage for certain populations, including children in poverty and adults who cannot afford private insurance.
Eligibility for Medicaid is not tied to eligibility for TANF benefits. However, low-income children and families leaving TANF are often eligible for Medicaid. States are allowed the option to use a joint application for both programs.
Medicaid beneficiaries have better access to care than those who are uninsured. They are less likely to postpone or go without needed care due to cost, as federal rules generally limit out-of-pocket costs. Medicaid also covers prescription drugs, home care, and non-emergency medical transportation.
TANF is a cash assistance program, so income from work decreases TANF costs. Medicaid, on the other hand, does not have an existing infrastructure of work support programs. While some state Medicaid programs offer supported employment services, these are small and not available in all states.
