You're Not Entitled!
On paper, the rules are pretty straightforward: In August 1996, Congress replaced the New Deal-era Aid to Families with Dependent Children with Temporary Assistance for Needy Families. TANF is not an entitlement program. This means states are under no obligation to provide cash assistance to eligible families. Instead, the federal government gives large block grants to assist poor families, with an emphasis on moving them from welfare to work or deterring them from applying for welfare in the first place. The federal law requires states to impose a five-year limit on welfare but states are free to impose shorter time limits (twenty-two states do) and to set up more rigid work requirements than the federal government's minimum. States are not allowed, however, to divert families from applying for Medicaid or food stamps. If an adult fails to follow any rules a state imposes--for instance, at 10 am Monday a client must present proof to a welfare worker that she's gone to six job interviews--a state can punish her for these infractions (for being late to the interview or failing to present adequate documentation) by taking away her Medicaid. That is perfectly legal. States may not, on the other hand, take away a child's Medicaid to punish a parent.
But like a game of telephone, as the welfare reform message has trickled down from Congress to governors to state legislators to counties, cities, welfare administrators and caseworkers, it has grown distorted. The mantra to "end welfare as we know it" has mutated into a message that it's OK to deny all government benefits, regardless of the protective aspects of the law (few and far between as they are). "There is no question that there's tremendous confusion among welfare administrators," says Ron Pollack, executive director of Families U.S.A., which documented the tremendous drop in Medicaid enrollment and the corresponding rise in uninsured children. "And there's no question that beneficiaries are also confused about their rights." Pollack's organization discovered that people across the country are being deprived of Medicaid at various points in the process. "When people apply for welfare, the states have the right to have them do certain things--like do a job search or check with your family to see if they can support you--before they will process an application," explains Pollack. "But when they divert people from filling out a welfare application, they're often diverting them from applying for Medicaid and food stamps, even though it is illegal to do so."
Then, if an applicant temporarily gets welfare but later gets a job, she's often zapped from the computer system in one clean sweep: no more welfare, no more Medicaid, no more food stamps. "In many states, the administrators are unaware of the break in linkage between welfare--no longer an entitlement--and other benefits like Medicaid, which are still entitlements," Pollack says. "Worse, the computers still automatically assume that if you don't qualify for welfare, then you're not eligible for anything else." He believes such problems are caused by carelessness, inadequate training and a poor understanding of the law. "Still," he admits, "there hasn't been overwhelming incentive on the part of the states to correct this because they have to pay part of the Medicaid costs."
After falling by 2.5 million in 1997, last year total Medicaid enrollment dropped by another 1.1 million. Bureaucratic blunders or malfeasance aside, the insurance problem is about to get a whole lot worse. Since Medicaid coverage for those who move from welfare to work is considered a "transitional" benefit, most recipients are eligible for a half-year to one year. "But the people who are moving from welfare to work typically find themselves in low-wage jobs with no health insurance," says Pollack. In most states, unless their earnings are extremely low, they will lose Medicaid. "At the end of the transition period, those folks just become uninsured."