Implications of Welfare Reform for Child Health: Emerging Challenges for Clinical Practice and Policy

The passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996 represented one of the most profound developments in American social policy since the Great Society programs of the mid- 1960s and has the potential to affect the health of millions of American children. The overall purpose of the legislation, commonly referred to as welfare reform, was to decrease reliance on welfare and increase the economic independence of poor families. Its impact has been far-reaching, affecting many determinants of child health and well-being, such as family resources, reproductive choices, maternal employment, parental supervision, childcare, and access to health insurance.The implementation of PRWORA has been associated with unprecedented declines in the number of children receiving public benefits. In the first 2 years after welfare reform, the number of children receiving welfare benefits fell by 28%.1,2 In addition, the number of children enrolled in Medicaid, the principal public health insurance program for poor children in the United States, also fell, despite provisions in the legislation to extend Medicaid coverage to all children who lose welfare benefits.3 Similarly, the number of children receiving food stamps has dropped by 20% between 1996 and 1998.4–6 Although there is consensus that both growth in the economy and welfare policies themselves have contributed to these declines, the exact proportion attributable to each factor remains unclear.7–9This discussion considers how these major shifts in public support for poor children and their families are likely to affect patterns of child health and the provision of clinical services to children. It addresses these concerns by exploring 4 related issues: the elements of the welfare legislation most likely to affect child health, the impact of this legislation on enrollment in public programs for children, the potential health effects of welfare reform, and the role of pediatric and other child health practitioners in addressing these health effects through clinical practice and public advocacy.The PRWORA legislation ended the federal guarantee of income support to poor families by replacing the longstanding entitlement program Aid to Families With Dependent Children (AFDC) with limited block grants to the states under the new Temporary Assistance for Needy Families (TANF) program. Through these block grants, the states were given substantial power over many aspects of welfare policy and implementation, which has led to unprecedented variation in state welfare programs. Among the many changes in welfare that PRWORA imposed, there are 6 key elements of the new welfare law that have implications for child health: time limits, work requirements, family caps, the uncoupling of TANF and Medicaid, sanctions, and changes in related social programs.The federal law mandates a 5-year lifetime limit for cash benefits. Once families reach their time limit, benefits are terminated regardless of their social or economic situation. States can institute shorter limits and 23 states have done so; several states have time limits of 2 years or less (Table 1).10 Exemptions and extensions are permitted for factors such as domestic violence, parent disability, or caring for a young child; however, 18 states do not allow extensions in any circumstance.The federal law also mandates that single parents receiving TANF must seek work (Table 1).11 In many states, educational activities such as pursuing high school diploma equivalency, job training, or college, no longer fulfill work requirements. Although 28 states have adopted the federal guideline that exempts parents of children younger than 1 year of age from work, 12 states have set the age for exemption much lower at 3 months of age (Table 1). Although states can provide exemptions to women with chronically ill children, most states have adopted highly restrictive criteria. For example, in Massachusetts work exemptions are limited to only those women whose children meet SSI disability standards, a practice that has recently been challenged in court.12 Similarly, state exemptions for when a parent is disabled or a victim of domestic violence have been highly restrictive.13 Failure to comply with work requirements can result in reduction or termination of benefits (Table 1).Although there was no specific federal requirement to eliminate benefits for children born to women already on welfare, states were allowed to do so and 23 states have chosen to restrict cash assistance to such family cap children to provide a disincentive for childbearing while on welfare.10 Nineteen of these states provide no additional assistance, 2 provide partial increases in cash benefits, 1 provides additional assistance as vouchers rather than cash, and 1 provides additional assistance to a third party rather than to the parent (Table 1). For families who have an additional child while on welfare, the family cap restrictions do not reduce total benefits to the family, but effectively result in a decrease in household income per family member. In an additional effort to discourage childbearing while on welfare, 4 states have provisions that require mothers who have children while receiving TANF to work soon after birth.10,13Before 1996, welfare and Medicaid were administratively linked. The PRWORA legislation created different eligibility requirements and funding mechanisms for the 2 programs. Families found ineligible for TANF could still qualify for Medicaid, which remains an entitlement program. PRWORA maintained Medicaid eligibility guidelines similar to those of the former AFDC program and specified that Medicaid benefits could continue for a transitional year after families leave TANF for employment (Table 1). This provision was intended to address the likelihood that the jobs available to this population may not provide health insurance. The State Child Health Insurance Plan (SCHIP) was also established in 1997 to reduce the number of uninsured low-income children. By the beginning of fiscal year 1999, the majority of states had begun implementing their SCHIP enrollment plans, although the pace of enrollment has varied across states.14The welfare law mandated that cash benefits must be reduced if parents fail to comply with work requirements, a practice that many states had implemented even before this legislation.13States vary regarding the causes, severity, and duration of sanctions. For example, some states will impose sanctions if immunization or routine pediatric health care is not appropriately documented (Table 1).The welfare legislation also included changes in 2 other important programs that benefit low-income children—food stamps and the Supplemental Security Income (SSI) programs. New restrictions were imposed in the food stamps program, including a reduction of benefit levels and allowances for reductions in food stamp benefits if families were penalized under TANF rules.4,15 Welfare reform tightened SSI eligibility by eliminating the Individualized Functional Assessment as a basis for evaluating disability in children and by requiring eligibility redeterminations.16,17 These individualized assessments allowed children to be considered disabled if their conditions were of comparable severity to those of an adult or if they had a combination of impairments that did not individually meet disability criteria.18Since the enactment of PRWORA, there have been substantial declines in enrollment of children in important programs that serve as the safety net for poor children—TANF, Medicaid, food stamps, and SSI. The difference between states in the size of enrollment decreases is likely caused by differences in their specific welfare policies as well as their overall economic situation.7,8,19 There is evidence that there is persistent need for these programs despite a strong economy, which has implications for future periods of economic slowdown.20,21Since the enactment of welfare reform, the number of children receiving welfare benefits decreased by 28%, from 8.6 million in 1996 to 6.2 million in 1998 (Table 2).1,2 During this same period, the rate of child poverty decreased by 1.6%. However, this decrease reflected overall poverty trends and did not necessarily represent the experiences of children leaving welfare.22An even more striking decline occurred among adults, with the total number of people receiving TANF falling by 43% from 12.2 million in August 1996 to 6.9 million in June of 1999.23 Although the welfare caseload began to decline from its peak of 14.2 million in 1994, before passage of welfare reform, 61% of the decrease since 1994 occurred in the last 2 years. The size of the drop varies from 12% in Rhode Island and Nebraska to over 80% in Idaho, Wisconsin, and Wyoming.23,24One problem with evaluating Medicaid enrollment trends is the significant time lag in reporting these data.25 Fiscal year 1998 data are only now becoming available and have yet to be verified. Medicaid enrollment data compiled from a recent survey of 21 states are available but do not include information for children.26 However, the data that are available for the period between 1996 and 1997 indicate that the number of children enrolled in Medicaid fell by 1 million, from 16.3 to 15.3 million, a 6% decrease (Table 2).3,27 This reduction occurred while the child uninsurance rate remained stable at 15%, translating to 11 million uninsured children.21 As with the TANF decline, the reason for the decreases in Medicaid enrollment are understood to be multifactorial but are likely to include practical administrative barriers resulting from the uncoupling of Medicaid and TANF, as well as improvements in local economic conditions.7,28 In addition, part of the decline in Medicaid enrollment is attributable to a decrease in the participation rate in the program among poor children from 63% in 1996 to 58% in 1998.29The effort to expand coverage to a larger proportion of poor children through SCHIP has only offset a portion of the Medicaid declines. A recent survey of the 12 states with the most uninsured children demonstrated that increases in SCHIP enrollment were overshadowed by even larger decreases in Medicaid enrollment, resulting in substantially fewer children enrolled in federally funded health insurance programs 3 years after welfare reform.30 Indeed, evidence indicates that there are at least 2.6 million uninsured children eligible for SCHIP and 4.7 million uninsured children eligible for Medicaid.31,32 SCHIP enrollment data suggest that although enrollment increased by over 50% from 833 000 to 1.3 million between December 1998 and June 1999 this only accounted for 50% of those predicted to be eligible.33 As SCHIP enrollment proceeds, information must be gathered on how many of these uninsured yet eligible children are captured.Food stamps are an important resource for low-income families regardless of whether they receive welfare benefits. Concurrent with the dramatic decrease in the total number of TANF recipients from 1996 to 1998, there has been a comparable 24% decrease in overall food stamp enrollment from 24.9 million to 18.9 million participants, the lowest number since 1979.4 In the face of this decline, the increased need for food assistance was documented in a 1999 survey of 26 major cities that found requests for food assistance by families with children increased by 15% in the previous year and that two thirds of those requesting food assistance were working.20This evidence suggests that food stamp enrollment cannot be explained only by a decreased need for food assistance. Rather, the overall decline is likely to be attributable to a combination of overall economic conditions, specific tightening of food stamp eligibility requirements under PRWORA and to spillover effects of other welfare reform policies geared to reducing caseloads.4Studies have indicated sharp declines in the use of food stamps by families who leave welfare. Former welfare recipients left the food stamp program at greater rates than other families, but those with the lowest incomes were especially likely to stop receiving food stamps.15 These declines are not caused by ineligibility because most families are still eligible because their incomes have remained low after leaving welfare.4,34–38Not surprisingly, the number of children receiving food stamps also decreased, falling 20% from 13.2 million in 1996 to 10.5 million in 1998 (Table 2).39 This drop accounts for nearly one half of the total decline in food stamp enrollment. In addition, the rate of participation of poor children decreased from 94% to 84% between 1995 and 1997, despite rising rates of demand for subsidized school lunches and emergency food assistance.4The SSI program is one of the most important programs providing supplemental income support for families with disabled children. After the stricter eligibility standards for SSI went into effect, eliminating the Individualized Assessment Plan and requiring eligibility redeterminations, the overall enrollment dropped by 11%, from 955 000 to 847 000 between December 1996 and December 1999.40 Children who lost their SSI benefits through redeterminations also lost their Medicaid coverage until this was reinstated by the 1997 Balanced Budget Act.18,40Although there are many potential ways welfare reform can influence the well-being of poor children and their families, we consider the principal pathways to be: changes in family resources, influences on parental supervision, and alterations in access to health care.Although PRWORA has many complex components, its primary impact will depend on whether it serves to increase or decrease resources for families who leave and those who remain on welfare. Despite the centrality of this issue, there are limited data on the long-term economic status of families after they leave the welfare rolls. Recent studies of different states have shown that one half to two thirds of people who left welfare were employed when surveyed 3 to 12 months later.34–38 However, all of these welfare leaver studies are limited by relatively short follow-up periods. These studies also indicate that although many former recipients are working, their earnings do not raise them above the poverty level, because most are employed in low-wage, entry-level work.34,41This concentration in low-wage work is consistent with the evidence that families who leave welfare for work face significant barriers to employment, including inadequate education, training, and previous work experience.42–44 Former recipients also tend to be young single parents with young children.34 Child health is often cited as a barrier to parental employment among welfare recipients.42–44 This is not surprising because recent studies indicate that children of welfare recipients have a higher burden of illness than do other poor children—20% to 40% of families receiving AFDC had children with chronic illnesses, compared with 10% of all poor families.45–47Because it may be difficult for women with chronically ill children to meet the new work requirements, they will be more vulnerable to sanctions or benefit terminations for noncompliance. Although states can provide exemptions to work requirements because of child illness, many base such exemptions on strict criteria such as SSI disability designation. Such exemptions, however, will not affect mothers of chronically ill children who have significant health needs and require parental participation in their medical care, but who may not meet SSI disability standards. For example, chronically ill children with respiratory diseases have 3 times the number of physician visits and 4 times the rate of hospitalizations of healthy children.47Although the dramatic declines in TANF rolls may well reflect improved social conditions for some families previously reliant on public assistance, a portion of poor families will likely experience significant hardship, particularly during difficult economic times. Taken the barriers to employment, sanctions, and the termination of benefits above will some families to experience declines in available There is much evidence to indicate that decreases in family resources, including food stamps, resulting from welfare policies have the potential to and substantial child health impact of the substantial declines in food stamp participation on the status of poor children must also be children are times more likely to experience food and and they have lower of and other compared with is associated with health including poor and food stamp use is associated with a lower of inadequate food and improved work requirements included in welfare reform raise important regarding while parents are or a of including and with medical In the of chronically ill children, in parental employment as well as child care are to For example, children with who to their medical are more likely to have their on the age of the parental time and are for the of of and at medical welfare recipients are to jobs that provide the to care for a chronically ill because most low-wage work in by limited parental benefits or leave data suggest that employed poor mothers and mothers of chronically ill children have less leave than do other In a substantial proportion of former welfare recipients leave or leave or a that allow them to care for a This between the of illness poor families experience and the of work available to them suggests that these parents will be with the difficult of to do when their child is or needs to to the and they are to time from problem of inadequate care for and former TANF recipients was by recent data a of care, especially for and The in available care is particularly striking for poor families who work because most child care are during these For many families, this that they will have to on care, which is more available during This to the use of lower care by poor families, a factor that increases the of child health and PRWORA additional funding for child care which are in former recipients to However, most states are to provide child care to all families who meet the eligibility resulting in and to restrict access to limited child care primary of providing health insurance to children on welfare has been the Medicaid program. The reduction in Medicaid enrollment since the passage of PRWORA concerns uninsured children in families leaving welfare. Despite provisions for several studies provide consistent evidence that to one half of children in the states were not enrolled in Medicaid 6 months after leaving welfare and that there was limited use of available transitional Medicaid of eligible children is at least caused by administrative barriers and the of between Medicaid and welfare 40% of former recipients and of their children were uninsured by Medicaid are to have insurance because the proportion who found jobs providing such insurance varies from 10% to and even those who have access to insurance may not be to the of the The that a substantial proportion of children who leave welfare uninsured is of because has shown that poor children health insurance experience access to health are less likely to have a of care and are more likely to have and to care because of uninsured children with a chronic illness are more likely to have had no physician in the previous 12 welfare policies that result in higher rates of uninsured children can be to result in a of health and a burden on the well-being of clinical and that care for poor children in the United and of welfare reform will new and for who care for poor children in the United The of high rates of uninsurance in the face of a decline in Medicaid enrollment a barrier to improved child health and will new for clinical and poor families. The to which uninsurance remains a problem on how states are in eligible children in their Medicaid and SCHIP programs. evidence suggests that there is variation in how states have been in their and in important administrative barriers to enrollment, such as eligibility redeterminations and In addition, and that are with higher rates of care because of uninsured children will have a strong to address this a policy there is an need to portion of the declines in Medicaid, food stamps, and SSI is attributable to economic growth or welfare This will be key in whether more be on program policies or on policies in for an economic The pediatric could to raise public of these trends and to seek including those by the American of Although the data on enrollment trends in these programs are from a relatively short time these are the only data and more information on child health and well-being to a more regarding PRWORA as it its in must consider the that if some families are to leave welfare and poverty during the economy, it is likely that the potential for will increase during an economic enrollment greater be to population that are such is children of who for Medicaid because of that Medicaid will be as evidence of a public and will affect their for will need to a of the problem of uninsured children and institute such as those by the American of the by the and the by the of Health and and the caring for low-income families may need to patterns of practice and new to meet the different welfare reform may for their limits will new economic on families. work requirements may require greater by with care to health care and practice to parents with limited work will also need to serve as of information and assistance for families who may be eligible for Medicaid, food stamps, and transitional child care even after welfare benefits be that in many states, medical may to be a for TANF time limits, maternal work requirements, and health insurance for children with health care provide assistance for their caring for poor children have a of local welfare policies and with social and For example, one pediatric has a of routine regarding health food and welfare by a and follow-up to families in clinical could also serve as an of data on the impact of welfare reform on children. particularly those on children with chronic illness, could provide information on the health of children who changes in their welfare Health care could also an important role in families who more into poverty under welfare reform provisions even if the overall experience of the population Such can use the power of to set and policy can to welfare reform policy by providing regarding to effectively or and Although we data from such as the of American Families as well as the of the of data on child health in these studies will be are in a to significant to the health and well-being of children during the implementation of welfare reform by the experience of clinical practice and to the of child health over welfare has to the states, health care are in a to influence local policy through their Through the pediatric can that the health of children is included in the of the effects of social welfare Through clinical we can that the discussion of welfare reform is by a of the experience that the was in part by funding from the the the of of and the Health and the and the for the Children of the who previous of this and and who in the of the