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Archive for Tuesday, June 20, 2000

Welfare reform side-effect unhealthy

Hundreds of thousands now without health insurance

June 20, 2000

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— Changing the welfare laws has been trumpeted as a success for slashing case loads and pushing people into jobs. At the same time, however, close to a million poor parents or more lost Medicaid coverage in the process, says a group that advocates more federal health insurance for the poor.

A study by Washington-based Families USA analyzed Medicaid enrollment in 15 states from 1996 to 1999 and found that 945,880 adults with children have been dropped from the program, a decline of 27 percent.

The findings suggest that the massive 1996 overhaul of the nation's welfare system, which aimed to make families more self-sufficient, probably contributed to another national problem that hits poor people hardest -- a lack of health insurance. Nationwide, 44 million people are uninsured now, 3 million more than in 1996.

"Hundreds of thousands of low-wage working parents are cast adrift without health care when they do they right thing and find jobs," said Ron Pollack, executive director of Families USA.

More than 2.5 million were enrolled in Medicaid in the 15 states at the end of last year.

The study, released Monday, blamed the problem on states, contending they mismanaged the implementation of welfare reform. For instance, they were supposed to end the link between welfare enrollment and Medicaid eligibility, but didn't; so many people who left the rolls were routinely dropped from Medicaid, even if they remained eligible.

Many states set income eligibility requirements so low that parents who work full-time at minimum-wage jobs earn too much to qualify for Medicaid, the study showed. In Georgia, for example, a parent of three earning $6,168 a year would be ineligible.

Advocates for the poor complain that state and federal officials have been too quick to declare welfare reform a success. Caseloads have dropped 46 percent nationally since Congress passed the Clinton administration-backed welfare law in 1996. But side effects such as losing health benefits tend to destabilize families, critics say.

States have recognized the problem and are acting to fix it, said William Waldman, executive director of the American Public Human Services Assn., whose members include state welfare agencies. "It remains an issue that needs to be addressed," Waldman said. "I think you'll see some very significant developments in the states."

New York and Ohio are expanding Medicaid eligibility, and other states are reinstating people who were wrongly cut off. The government recently ordered all states to find people improperly dropped from Medicaid and re-enroll them.

Families USA did not check whether those dropped from Medicaid had other insurance. Pollack said studies have shown that many low-income workers and people leaving welfare have jobs that offer no health insurance, and those offered insurance usually can't afford the premiums.

The group looked only at parents with family Medicaid coverage. The 15 states in the study are those with the largest number of uninsured poor people and represent 70 percent of all low-income uninsured Americans.

Medicaid cost an estimated $181 billion last year, with the federal government picking up $103 billion and the states the rest. Enrollment dropped by 200,000, to 41.4 million, in 1998, the last year for which figures are available.

In the Families USA study Georgia had the biggest percentage drop in Medicaid enrollees. Almost 65,000 people lost Medicaid during the 4-year period, a 50 percent decline, the study found.

State officials said safeguards have been put in place to ensure that people are not being improperly cut off. And starting in July, people who lose eligibility for Medicaid because they earn too much can receive up to two years of transitional coverage, up from one year.

Increasing income requirements is one alternative the state is looking at as it comes up with a plan to slash the number of uninsured, said Joyce Goldberg, spokeswoman for Georgia's Department of Community Health.

In his presidential campaign, Vice President Al Gore has proposed raising income limits on a federal health program for poor children and letting their parents into the program. President Clinton has a similar proposal. Gore's Republican rival, Texas Gov. George W. Bush, has proposed giving $2,000 tax credits to help poor people purchase health insurance.

Besides Georgia, the study looked at Arizona, California, Florida, Illinois, Louisiana, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Texas and Virginia.

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