Dynamics of Children's Movement Among the AFDC, Medicaid, and Foster Care Programs Prior to Welfare Reform: 1995–1996. Implications


The transition dynamics of entry among AFDC cohorts into foster care across states are very similar on many parameters and quite different on a few important ones.  The consistency across states in the pre-foster care AFDC and Medicaid participation of foster children suggests that poverty, or perhaps participation in welfare program, plays an important role in the entry of children into foster care.  Also, it is clear that infants are at greatest risk and that the birth of a new child is a time when the child welfare system is most likely to intervene in a family's life.  The primary differences in the findings are in the percent who enter foster care two years after entry to AFDC; figures in Illinois and North Carolina are about 25 percent greater than California.  Also, there is a significant difference between Illinois and California in the likelihood of entry to kinship care compared with non-kinship care, with California children being more likely to enter non-kinship care.

We are able to use these findings to simulate what may happen as a result of changes in the transition from AFDC to foster care.  There have been estimates that a one percent increase in the number of children receiving AFDC who end up in foster care would increase the foster care population by 20 percent.  Although it is difficult to replicate this exact scenario, we provide in Table 3 below a set of scenarios in which we vary the change in the rate of entry to foster care from TANF and the number of foster children entering TANF cases.  These scenarios assume that the number of entries to foster care from Medicaid-only and the number for children who participate in neither TANF nor Medicaid stay constant.  The changes in the foster care entries include those children who come to foster care from all previous statuses (TANF, Medicaid-only, and neither of the two).

We find that if an additional one percent of children who begin receiving TANF after welfare reform entered foster care, we would see a 25 percent increase in the number of entries to foster care in 1999 and a 30 percent increase in the year 2000 (scenario #1).  Perhaps a more likely scenario would be #4, where the rate of entry to foster care increases, but the number of entries to TANF decreases by 10 percent each year.  In such a scenario, we would have much smaller increases to the foster care entries in 1999 (6%) and 2000 (5%).  A quite unlikely scenario, given what has already happened since welfare reform, is scenario #5, where both the rate of entry to foster care and the number of entries to TANF increase.  The effect on the number of foster care entries under this scenario would be dramatic, with a 51 percent increase in 1999 and a 67 percent increase for 2000.

Alternatively, given the recent decreases in the caseload and the strong employment statistics, we might anticipate that the number of entries to foster care decreases as a result of the positive effects of parents' employment.  A one percent decrease in the percentage of children entering foster care from TANF with no accompanying decrease in the number entering TANF would result in a 25 percent decrease in the total number of entries to foster care in 1999 and a 30 percent decrease in 2000 (scenario #7).  However, with a decrease in the number of entries to TANF and a decrease in the rate of foster care entry, we would see a 28 percent decrease in the foster care entries in 1999 and 34 percent decrease in 2000.


Table 3.
Simulated changes to foster care entries as a result of welfare reform.
Scenario Increase in rate of entry from TANF to Foster Care Yearly change in the number of entries to TANF Change in 1999 Foster Care entries from baseline Change in 2000 Foster Care entries from baseline
Baseline 14/1000 None    
1 +10/1000 None +25% +30%
2 +14/1000 None +36% +42%
3 None -10% -21% -27%
4 +10/1000 -10% +6% +5%
5 +10/1000 +10% 51% 67%
6 -10/1000 -10% -28% -34%
7 -10/1000 None -25% -30%
8 -10/1000 +10% -25% -28%

The prevalence of the transition from foster care back to a cash assistance grant may be affected by the existence in some states of the family cap policies that prohibit TANF payments for children born to parents while on TANF.  It is likely that many of the children who enter foster care will be born to mothers already receiving TANF.  In this case, they would be ineligible for TANF when they exited foster care.  Therefore, the transition from foster care to Medicaid may be an important one to focus on in a follow-up study.