MEDICAID: Low-Wage Workers Dropping Out Unnecessarily

      "Hundreds of thousands of low-income people" around the country have lost their health insurance as an unintended consequence of the 1996 welfare reform law, the New York Times reports. The "pervasive problem" has come to the fore with the recent publication of several authoritative studies by the Rockefeller Institute of Government, the Center for Health Policy Research at George Washington University and the Urban Institute, all of which show unprecedented numbers of ex-welfare recipients dropping off the Medicaid rolls. Despite the fact that Congress severed the tie between cash assistance and Medicaid in 1996, the recent studies found that as recipients enter the workforce, they assume their Medicaid eligibility has expired and drop it as well. And, the Times reports, many case workers have been unable to clarify the rules for the Medicaid-eligible. Matt Salo, a health policy expert with the National Governors' Association, said "it was hard for caseworkers to reconcile two contradictory messages implicit in the 1996 law: 'Medicaid is good, everyone should stay on Medicaid. But welfare is bad, everyone should stay off welfare.'"

Unintended Consequence
      Many people who have left welfare have become uninsured because their low-wage jobs don't offer health insurance or they can't afford the premiums, the Times reports. As a result, welfare reform has "unexpectedly undermined [President Clinton's] goal of increasing the number of Americans with health insurance." Sen. John Chafee (R-RI), lead author of the provisions to continue health care coverage under welfare reform, said, "This directly contradicts the intent of the 1996 welfare law and could very well undermine states' future success in helping people become self-sufficient." The Times reports that the states have used less than 10% of the $500 million Congress set aside to "help states carry out the Medicaid provisions of the 1996 law." In New York, the Medicaid rolls have shrunk 9% since the law went into effect; in New Jersey, 8%; in Oregon, 11%; in Texas, 15%; in Pennsylvania, 13%; in California, 8%; and in Florida, 4% (Pear, 4/12).