The contribution of Medicaid managed care to the increasing undercount of Medicaid beneficiaries in the Current Population Survey

BACKGROUND: The Current Population Survey (CPS) is an important source of data for comparing beneficiaries across insurance groups. However, the CPS routinely underestimates the Medicaid population, and for unexplained reasons these underestimates have been increasing over time. OBJECTIVE: We sought to determine whether the penetration of Medicaid managed care is associated with the magnitude of the underestimate of Medicaid beneficiaries in the CPS using a pooled cross-sectional comparison of survey and administrative databases on all California Medicaid beneficiaries younger than 65 years of age. MEASURES: We compared the CPS estimates of Medicaid beneficiaries in California from 1995 to 1999 with the gold-standard number derived from the Medicaid eligibility file for the same time period and examined the association between the CPS underestimate and penetration of managed care in the beneficiary's county. RESULTS: The CPS underestimated the Medicaid population by approximately a third. At the county level, errors in estimated numbers of Medicaid beneficiaries in the CPS increased in association with the penetration of Medicaid managed care. Each percentage point increase in the penetration of managed care was associated with an underestimate in the CPS of 0.4 percentage points. CONCLUSION: A substantial portion of the increase in the underestimates of the number of Medicaid beneficiaries in the CPS can be explained by the growth of Medicaid managed care. Steps must be taken to improve the CPS if this survey is to remain useful for making accurate estimates of Americans' health insurance status.