Description and Assessment of State Approaches to Diversion Programs and Activities Under Welfare Reform. E. Potential Impact of Other Formal Diversion Programs - Mandatory Applicant Job


Search and Alternative Resources - on Medicaid Eligibility

As the advent of welfare reform has meant an increased emphasis on work, required work participation rates for TANF recipients, and more stringent lifetime limits on TANF benefits, states have devised new ways to encourage work among TANF applicants and to avoid enrolling applicants in TANF. Sixteen states require applicants to complete job search requirements prior to authorizing TANF benefits. (See foregoing discussion in Chapter Four.) The requirements of the mandatory applicant job searches vary from three days of work activities for applicants to several weeks of job search. Another approach adopted by seven states involves aggressive efforts to link TANF applicants with resources other than TANF assistance, i.e., alternative resources, sufficient to meet the needs that prompted the TANF application. (See foregoing discussion in Chapter Three.) This section examines the potential impact of both mandatory applicant job search requirements and alternative resources approaches on Medicaid eligibility.

While states may impose job search requirements on applicants as a condition of eligibility for TANF assistance, the states must immediately proceed to determine Medicaid eligibility for the applicant and members of her family. While all but two states use a joint TANF/Medicaid application it is not clear that persons who apply for benefits would complete the joint application before fulfilling their job search requirements. It is frequently true that their TANF applications are not processed until their job search responsibilities have been fulfilled. In addition, a TANF applicant may be discouraged by the job search requirements and simply drop out of the program without fully pursuing her eligibility for Medicaid. All of these characteristics of mandatory applicant job searches create numerous circumstances whereby a family's Medicaid application could "fall through the cracks," i.e., not be processed in a timely matter, not be processed at all, or not even be completed.

Similar to the above-described losses in transitional Medicaid eligibility potentially faced by persons who participate in lump sum payment diversion programs, persons who secure jobs fairly quickly will likely jeopardize their eligibility for Medicaid. By requiring job search activities at a much earlier stage in the TANF application process,(15) increased numbers of applicants are probably finding work before they are able to accumulate three months of Medicaid eligibility. In most cases earnings from a job would disqualify an applicant from eligibility for Medicaid under 1931 unless the state has considered taking advantage of its ability to choose more liberal income disregards. Given that few states appear to be aware of the value of so structuring their income and resource disregards, the likely effects of mandatory applicant job search programs will be to reduce the number of persons who would otherwise have received Medicaid. It is also likely that current state policies requiring work-related activities during the TANF application process will reduce the number of persons able to qualify for transitional Medicaid benefits as TANF recipients will accumulate fewer months of Medicaid eligibility before finding a job.

The use of alternative resources as a method for formally diverting TANF applicants could have much the same effect on eligibility for Medicaid and transitional Medicaid as the above-described job search requirements. It is likely that a family receiving alternative resources assistance will shortly, if not immediately, become ineligible for Medicaid, particularly in states with relatively low income and resource standards for Medicaid eligibility. The families whose short-term needs can be met appropriately through alternative resources will almost certainly have an already-employed or about-to-be-employed head of household. On the other hand, assessing the appropriateness of alternative resources for a family in lieu of TANF assistance may likely involve a more comprehensive assessment of Medicaid eligibility for all family members and result in Medicaid enrollment for at least the children.