Keeping welfare reform healthy.

• Author: Davidson, Brooke

Sweeping welfare reforms will affect many health care programs, especially traditional "safety-net providers" such as community health centers and public hospitals.

Under the new welfare reform law, Congress has left some important decisions up to the states. States must decide individually how they wish to deal with Medicaid coverage for poor people on cash assistance programs, how (or if) they are going to provide Medicaid coverage for legal immigrants and whether it's a good idea to train welfare recipients for jobs in health care.

"While it is important that states be given flexibility to implement effective welfare reform policies, it is equally important that legislators understand that there 'is a state price tag tied to that flexibility," says South Carolina Representative Gilda Cobb-Hunter. Social services officials who believe that reform will ultimately save money have to make it clear to legislators that states bear the financial risk associated with that reform. "States will have to rely primarily on their own resources, financial and otherwise, to implement better programs that will lead to self sufficiency," Cobb-Hunter says. And those programs, she warns, will reach far beyond what any state has done so far.

MEDICAID AND CASH ASSISTANCE

Medicaid coverage is no longer guaranteed for recipients of Temporary Assistance to Needy Families (TANF), as it was for recipients of Aid to Families with Dependent Children (AFDC). But the new law requires states to continue benefits to individuals who would have been eligible for Medicaid under the AFDC requirements in place in the state on July 16, 1996.

Advocates for the poor worry that applying for cash assistance and Medicaid separately will substantially increase the number of uninsured Americans. Past experience and studies show that Medicaid enrollment rates drop when the needy have to go through a separate application process for health care benefits. The National Association of Public Hospitals and Health Systems is working with the Health Care Financing Administration to develop incentives for states to keep the link between cash assistance and Medicaid.

"We are concerned about people who will lose Medicaid coverage, even if only temporarily when they lose cash assistance," says Kate Kellenberg of the National Association of Community Health Centers. "Patients losing cash assistance may not be aware that they may still qualify for Medicaid and can still receive care at health...