How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs. Expected Effects


At random assignment, all sample members and their children had health care coverage because they were receiving AFDC and thus automatically covered under Medicaid. In general, Medicaid receipt should fall over time for both the program and control groups since most of them left welfare during the five-year follow-up period. By the last quarter, for example, welfare receipt ranged from 20 to 40 percent across the sites. Health care coverage in general should also fall over time if some sample members cannot replace their lost Medicaid coverage. Coverage might also fall more rapidly for parents than for their children. Most children under age 18 are now eligible for Medicaid if their family's income is less than 100 percent of the poverty level. They may also be eligible, depending on the state in which they live, for coverage through the Children's Health Insurance Program (CHIP). As a result, it is not uncommon for coverage status to vary within the same family. The mother might not have coverage or might be covered through her employer, while her children might be covered through CHIP or Medicaid.

The primary way that the programs might affect health coverage is through their effects on welfare receipt and employment. When people leave welfare for work, they run the risk of losing coverage because they will either immediately or eventually lose their public coverage and cannot often find private coverage to replace it. Transitional Medicaid is the main source of public coverage and is available to families for up to one year after leaving welfare.(3) However, recent research finds that its use has been slow to take hold: According to one study, over 600,000 recipients lost Medicaid coverage when their welfare case was closed, even though the majority still met Medicaid eligibility standards.(4) There are a number of possible reasons why individuals eligible for Medicaid do not receive it. One reason is that recently employed recipients, believing they are no longer eligible for welfare, often fail to respond to eligibility verification notices they receive from welfare caseworkers. Caseworkers typically close the cases of those who do not respond, which includes not only welfare but Medicaid and Food Stamps.(5)

Once Transitional Medicaid expires the family must find other insurance, mostly from private sources. This has become increasingly difficult for many low-income workers. There has been a decrease over the past decade in the number of workers with employer-sponsored coverage, especially among those in low-wage jobs.(6) With rising health care costs, many employers have been faced with the choice of dropping coverage for their employees or passing along the costs to them in the form of higher premiums. As a result, many former welfare recipients are either not offered insurance or cannot afford it.

In terms of program impacts, increases in employment and reductions in welfare receipt might lead to reductions in coverage, particularly in those sites with the largest reductions in welfare receipt. Because better jobs are more likely to come with employer-provided insurance, programs that may have encouraged recipients to take lower-quality jobs than they would have otherwise  particularly programs with an emphasis on quick employment  may have decreased coverage. In contrast, if program group members moved into better jobs than control group members over time, they may have increased coverage. Average wages, one measure of job quality, were higher for program group members in some sites (Atlanta LFA, Riverside HCD, and Riverside LFA all significantly increased hourly wages). Program impacts on earnings might also affect coverage, particularly coverage for children, since families with higher earnings may be less likely to qualify for public insurance programs.

The programs might also affect coverage in ways that are not related to their impacts on employment or welfare receipt. For example, program group members have more contact than control group members with program staff, making it more likely that they will be made aware of and receive help in obtaining Transitional Medicaid or other kinds of public coverage. Programs with a strictly enforced participation mandate might also affect coverage, probably reducing it, if they lead many individuals to leave welfare before they have found jobs.