Welfare reform, health insurance, and health.

• Author: Kaestner, Robert

In 1996, Congress passed and the President signed the Personal Responsibility, and Work Opportunity Reconciliation Act (PRWORA), or what has become known as welfare reform. To many, welfare reform has been an unqualified success; welfare rolls decreased markedly and single mothers began working in unprecedented numbers. (1) Moreover, poverty rates among single mothers have decreased sharply. (2) Welfare reform may have had some unintended consequences, though, particularly the loss of health insurance. However, contrary to some earlier studies, my research finds that welfare reform was responsible for only a small increase, less than 4 percent, in the proportion of less educated, unmarried mothers and their children without health insurance. And, consistent with these small effects on insurance, I find that changes in the welfare caseload attributable to welfare reform were associated with few adverse health effects among less-educated, unmarried mothers. Indeed, changes in the welfare caseload were associated with some significant improvements in healthy lifestyles among this group. Decreases in the welfare caseload between January 1996 and June 2000 were associated with a 30 percent decrease in the probability of binge drinking in the past month, and a 27 percent increase in the probability of engaging in regular and sustained physical activity.

The potential loss of health insurance was an important concern of Congress during the debate leading to passage of PRWORA. In fact, PRWORA contains provisions "assuring Medicaid coverage for low income families," which provides--among other things--transitional Medicaid benefits for those who leave welfare. If welfare reform led to loss of health insurance coverage, as has been claimed, it might have adversely affected the health of persons in these families. Furthermore, welfare reform could have affected women's health in ways other than through changes in insurance coverage. Between 1994 and 2000, approximately one-fifth of all low-educated, single mothers made the transition from welfare-to-work. The switch from subsidized household work to paid employment could affect financial resources, time constraints, and the amount and kind of physical activity, all of which may affect women's health and health behaviors. On the other hand, employment may result in improved feelings of self worth, increased earnings, and greater access to quality health care through employer sponsored insurance, and these changes may improve women's health.

Surprisingly, there has been relatively little study of the effect of welfare reform on health insurance cover age and health, even though health is an essential component of well-being and arguably is as important as material wellbeing, which has been a widely studied outcome of welfare reform. Here I report on some recent research related to these issues.

Welfare Reform and Health Insurance

It is widely believed that an unintended consequence of welfare reform was the loss of health insurance coverage among low-income families. This belief is based on several pieces of information: studies of welfare "leavers" find...