Health Care Costs, and Financing

Forty percent of families who leave welfare for work have no health insurance 19 months later

Welfare reform, implemented nearly 10 years ago, limits the time that families can stay on welfare to a maximum of 5 years. When families leave welfare for work, they typically obtain jobs that provide low pay and few benefits such as health insurance, but which nevertheless disqualify them for Federal aid. Automatic Medicaid insurance stops one transitional year after leaving welfare. An Oregon statewide study recently found that 40 percent of families who left welfare for work had no health insurance 19 months later, 7 months after the year of transitional Oregon Medicaid coverage expired.

Oregon's experience may suggest what is occurring in other States, as families leave welfare for work and the transitional Medicaid benefits expire, note Karen Seccombe, Ph.D., and colleagues at Portland State University. They surveyed 637 recent Temporary Assistance to Needy Families (TANF) or welfare recipients by telephone 7 months after they left TANF (wave 1), when continued Medicaid was considered automatic. They reinterviewed 552 of these families a year later (wave 2) about their health, insurance coverage, and access to health care for themselves and their children.

Eleven percent of those surveyed were uninsured at wave 1. A year later, 40 percent were uninsured. Few persons received health insurance from their employers, and most could not afford to purchase private benefits. The percentage of those surveyed who reported a delay in getting needed care increased from 21 to 32 percent from wave 1 to wave 2. These individuals had poorer health than others, after controlling for other factors.

The researchers recommend that Medicaid coverage should continue beyond 1 year after leaving TANF and that the income requirements to qualify for State Medicaid programs should be raised so that the growing numbers of working poor have health coverage. The study was supported by the Agency for Healthcare Research and Quality (HS11322).

See "Access to health care and welfare reform," by Dr. Seccombe, Jason Newsom, Ph.D., and Kim Hoffman, B.A., in the Summer 2006 Inquiry 43, pp. 167-178.

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