The Clinton Administration has dedicated to strengthening and improving Medicaid so that it can fulfill the promise of our nation to millions of children, elderly, and disabled Americans and their families. To achieve this goal, this Administration has worked vigorously in partnership with the states to test innovative new approaches to delivering and financing care for Medicaid patients. During our first 3 years in office, this Administration approved 91 major Freedom of Choice waivers and waiver renewals, which allow states to enroll beneficiaries in managed care plans.
We have also approved 163 new and renewed Home and Community-Based Services waivers, which enable states to use home care as an alternative to costly nursing home care, and allow people with disabilities to live in their communities. In addition, since January 1993 we have approved 12 statewide Medicaid demonstrations, compared to a total of one such demonstration approved under all previous administrations combined. Some statewide demonstrations expand access to the uninsured, others test new methods for delivering mental health services, and still others implement simplified eligibility requirements.
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), enacted in August 1996, was hailed as landmark legislation to “end welfare as we know it. ”1 After months of wrangling and Two presidential vetoes, radical reform of welfare was accomplished by excising the individual entitlement program of Aid to Families with Dependent Children (AFDC) and replacing it with a state-administered block grant program of Temporary Assistance to Needy Families (TANF). The dramatic changes in welfare have the potential to affect not only the economic but also the social and health status of low-income people.
Moreover, this striking reform also provides a living lesson in the devolution of public policy management from the federal government to states and localities. One of the most contentious elements of the welfare reform debate in 1995 and 1996 revolved around the Medicaid program. Would it be tied to welfare reform and block granted along with cash payments? Should the Medicaid program be considered a health financing? program or a welfare program?
Should states be given the same flexibility to design and redesign Medicaid? rograms as was being considered for cash welfare programs? The administration’s response, a presidential veto threat, highlighted its refusal to accept a block grant for Medicaid, leading to final enactment of a bill that maintains existing Medicaid federal and state roles. The automatic eligibility link between welfare and Medicaid programs, however, was severed. As the first years of TANF unfold, some outcome based impacts in terms of the number of recipients in both welfare and Medicaid programs are being tallied and analyzed.
It is important, two years post-enactment, also to review state implementation processes and changes in administrative mechanisms. Only time and careful research will answer the most important questions about how effective the revised welfare incentives are for pulling recipients into work and, especially, out of poverty and whether recipients’ eligibility for health services through Medicaid are appropriately continued. The Forum has had a keen interest in the progress of welfare reform, initiating a series of activities.