PEDIATRICS Vol. 106 No. 5 November 2000, pp. 1117-1125

SPECIAL ARTICLE:
Implications of Welfare Reform for Child Health: Emerging Challenges for Clinical Practice and Policy

Lauren A. Smith, MD, MPH^*, Paul H. Wise, MD, MPH^*, Wendy Chavkin, MD, MPH, Diana Romero, MPhil, MA, and Barry Zuckerman, MD^*

From the ^* Department of Pediatrics, Boston University School of Medicine, Boston, Massachusetts; and the  Center for Population and Family Health, Columbia University, New York, New York.

The passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996 represented one of the most profound developments in American social policy since the Great Society programs of the mid- 1960s and has the potential to affect the health of millions of American children. The overall purpose of the legislation, commonly referred to as welfare reform, was to decrease reliance on welfare and increase the economic independence of poor families. Its impact has been far-reaching, affecting many determinants of child health and well-being, such as family resources, reproductive choices, maternal employment, parental supervision, childcare, and access to health insurance.

The implementation of PRWORA has been associated with unprecedented declines in the number of children receiving public benefits. In the first 2 years after welfare reform, the number of children receiving welfare benefits fell by 28%.^1,2 In addition, the number of children enrolled in Medicaid, the principal public health insurance program for poor children in the United States, also fell, despite provisions in the legislation to extend Medicaid coverage to all children who lose welfare benefits.³ Similarly, the number of children receiving food stamps has dropped by 20% between 1996 and 1998.^4-6 Although there is consensus that both growth in the economy and welfare policies themselves have contributed to these declines, the exact proportion attributable to each factor remains unclear.^7-9

This discussion considers how these major shifts in public support for poor children and their families are likely to affect patterns of child health and the provision of clinical services to children. It addresses these concerns by exploring 4 related issues: the elements of the welfare legislation most likely to affect child health, the impact of this legislation on enrollment in public programs for children, the potential health effects of welfare reform, and the role of pediatric and other child health practitioners in addressing these health effects through clinical practice and public advocacy.

	ELEMENTS OF WELFARE REFORM LEGISLATION

The PRWORA legislation ended the federal guarantee of income support to poor families by replacing the longstanding entitlement program Aid to Families With Dependent Children (AFDC) with limited block grants to the states under the new Temporary Assistance for Needy Families (TANF) program. Through these block grants, the states were given substantial power over many aspects of welfare policy and implementation, which has led to unprecedented variation in state welfare programs. Among the many changes in welfare that PRWORA imposed, there are 6 key elements of the new welfare law that have implications for child health: time limits, work requirements, family caps, the uncoupling of TANF and Medicaid, sanctions, and changes in related social programs.

Time Limits

The federal law mandates a 5-year lifetime limit for cash benefits. Once families reach their time limit, benefits are terminated regardless of their social or economic situation. States can institute shorter limits and 23 states have done so; several states have time limits of 2 years or less (Table 1).¹⁰ Exemptions and extensions are permitted for factors such as domestic violence, parent disability, or caring for a young child; however, 18 states do not allow extensions in any circumstance.

Work Requirements

The federal law also mandates that single parents receiving TANF must seek work (Table 1).¹¹ In many states, educational activities such as pursuing high school diploma equivalency, job training, or college, no longer fulfill work requirements. Although 28 states have adopted the federal guideline that exempts parents of children younger than 1 year of age from work, 12 states have set the age for exemption much lower at 3 months of age (Table 1). Although states can provide exemptions to women with chronically ill children, most states have adopted highly restrictive criteria. For example, in Massachusetts work exemptions are limited to only those women whose children meet SSI disability standards, a practice that has recently been challenged in court.¹² Similarly, state exemptions for when a parent is disabled or a victim of domestic violence have been highly restrictive.¹³ Failure to comply with work requirements can result in reduction or termination of benefits (Table 1).

Family Caps

Although there was no specific federal requirement to eliminate benefits for children born to women already on welfare, states were allowed to do so and 23 states have chosen to restrict cash assistance to such family cap children to provide a disincentive for childbearing while on welfare.¹⁰ Nineteen of these states provide no additional assistance, 2 provide partial increases in cash benefits, 1 provides additional assistance as vouchers rather than cash, and 1 provides additional assistance to a third party rather than to the parent (Table 1). For families who have an additional child while on welfare, the family cap restrictions do not reduce total benefits to the family, but effectively result in a decrease in household income per family member. In an additional effort to discourage childbearing while on welfare, 4 states have provisions that require mothers who have children while receiving TANF to work soon after birth.^10,13

Uncoupling of TANF From Medicaid

Before 1996, welfare and Medicaid were administratively linked. The PRWORA legislation created different eligibility requirements and funding mechanisms for the 2 programs. Families found ineligible for TANF could still qualify for Medicaid, which remains an entitlement program. PRWORA maintained Medicaid eligibility guidelines similar to those of the former AFDC program and specified that Medicaid benefits could continue for a transitional year after families leave TANF for employment (Table 1). This provision was intended to address the likelihood that the jobs available to this population may not provide health insurance. The State Child Health Insurance Plan (SCHIP) was also established in 1997 to reduce the number of uninsured low-income children. By the beginning of fiscal year 1999, the majority of states had begun implementing their SCHIP enrollment plans, although the pace of enrollment has varied across states.¹⁴

Sanctions

The welfare law mandated that cash benefits must be reduced if parents fail to comply with work requirements, a practice that many states had implemented even before this legislation.¹³ States vary regarding the causes, severity, and duration of sanctions. For example, some states will impose sanctions if immunization or routine pediatric health care is not appropriately documented (Table 1).

Changes in Related Social Programs

The welfare legislation also included changes in 2 other important programs that benefit low-income childrenfood stamps and the Supplemental Security Income (SSI) programs. New restrictions were imposed in the food stamps program, including a reduction of benefit levels and allowances for reductions in food stamp benefits if families were penalized under TANF rules.^4,15 Welfare reform tightened SSI eligibility by eliminating the Individualized Functional Assessment as a basis for evaluating disability in children and by requiring eligibility redeterminations.^16,17 These individualized assessments allowed children to be considered disabled if their conditions were of comparable severity to those of an adult or if they had a combination of impairments that did not individually meet disability criteria.¹⁸

	THE IMPACT OF WELFARE REFORM ON ENROLLMENT IN WELFARE, MEDICAID, AND RELATED PROGRAMS FOR CHILDREN

Since the enactment of PRWORA, there have been substantial declines in enrollment of children in important programs that serve as the safety net for poor childrenTANF, Medicaid, food stamps, and SSI. The difference between states in the size of enrollment decreases is likely caused by differences in their specific welfare policies as well as their overall economic situation.^7,8,19 There is evidence that there is persistent need for these programs despite a strong economy, which has implications for future periods of economic slowdown.^20,21

TANF Enrollment

Since the enactment of welfare reform, the number of children receiving welfare benefits decreased by 28%, from 8.6 million in 1996 to 6.2 million in 1998 (Table 2).^1,2 During this same period, the rate of child poverty decreased by 1.6%. However, this decrease reflected overall poverty trends and did not necessarily represent the experiences of children leaving welfare.²² An even more striking decline occurred among adults, with the total number of people receiving TANF falling by 43% from 12.2 million in August 1996 to 6.9 million in June of 1999.²³ Although the welfare caseload began to decline from its peak of 14.2 million in 1994, before passage of welfare reform, 61% of the decrease since 1994 occurred in the last 2 years. The size of the drop varies from 12% in Rhode Island and Nebraska to over 80% in Idaho, Wisconsin, and Wyoming.^23,24

Medicaid and SCHIP

One problem with evaluating Medicaid enrollment trends is the significant time lag in reporting these data.²⁵ Fiscal year 1998 data are only now becoming available and have yet to be verified. Medicaid enrollment data compiled from a recent survey of 21 states are available but do not include information for children.²⁶ However, the data that are available for the period between 1996 and 1997 indicate that the number of children enrolled in Medicaid fell by 1 million, from 16.3 to 15.3 million, a 6% decrease (Table 2).^3,27 This reduction occurred while the child uninsurance rate remained stable at 15%, translating to 11 million uninsured children.²¹ As with the TANF decline, the reason for the decreases in Medicaid enrollment are understood to be multifactorial but are likely to include practical administrative barriers resulting from the uncoupling of Medicaid and TANF, as well as improvements in local economic conditions.^7,28 In addition, part of the decline in Medicaid enrollment is attributable to a decrease in the participation rate in the program among poor children from 63% in 1996 to 58% in 1998.²⁹

The effort to expand coverage to a larger proportion of poor children through SCHIP has only offset a portion of the Medicaid declines. A recent survey of the 12 states with the most uninsured children demonstrated that increases in SCHIP enrollment were overshadowed by even larger decreases in Medicaid enrollment, resulting in substantially fewer children enrolled in federally funded health insurance programs 3 years after welfare reform.³⁰ Indeed, evidence indicates that there are at least 2.6 million uninsured children eligible for SCHIP and 4.7 million uninsured children eligible for Medicaid.^31,32 SCHIP enrollment data suggest that although enrollment increased by over 50% from 833 000 to 1.3 million between December 1998 and June 1999 this only accounted for 50% of those predicted to be eligible.³³ As SCHIP enrollment proceeds, information must be gathered on how many of these uninsured yet eligible children are captured.

Food Stamps

Food stamps are an important resource for low-income families regardless of whether they receive welfare benefits. Concurrent with the dramatic decrease in the total number of TANF recipients from 1996 to 1998, there has been a comparable 24% decrease in overall food stamp enrollment from 24.9 million to 18.9 million participants, the lowest number since 1979.⁴ In the face of this decline, the increased need for food assistance was documented in a 1999 survey of 26 major cities that found requests for food assistance by families with children increased by 15% in the previous year and that two thirds of those requesting food assistance were working.²⁰ This evidence suggests that food stamp enrollment cannot be explained only by a decreased need for food assistance. Rather, the overall decline is likely to be attributable to a combination of overall economic conditions, specific tightening of food stamp eligibility requirements under PRWORA and to spillover effects of other welfare reform policies geared to reducing caseloads.⁴

Studies have indicated sharp declines in the use of food stamps by families who leave welfare. Former welfare recipients left the food stamp program at greater rates than other families, but those with the lowest incomes were especially likely to stop receiving food stamps.¹⁵ These declines are not caused by ineligibility because most families are still eligible because their incomes have remained low after leaving welfare.^4,34-38

Not surprisingly, the number of children receiving food stamps also decreased, falling 20% from 13.2 million in 1996 to 10.5 million in 1998 (Table 2).³⁹ This drop accounts for nearly one half of the total decline in food stamp enrollment. In addition, the rate of participation of poor children decreased from 94% to 84% between 1995 and 1997, despite rising rates of demand for subsidized school lunches and emergency food assistance.⁴

SSI

The SSI program is one of the most important programs providing supplemental income support for families with disabled children. After the stricter eligibility standards for SSI went into effect, eliminating the Individualized Assessment Plan and requiring eligibility redeterminations, the overall enrollment dropped by 11%, from 955 000 to 847 000 between December 1996 and December 1999.⁴⁰ Children who lost their SSI benefits through redeterminations also lost their Medicaid coverage until this was reinstated by the 1997 Balanced Budget Act.^18,40

	POTENTIAL HEALTH EFFECTS OF WELFARE REFORM

Although there are many potential ways welfare reform can influence the well-being of poor children and their families, we consider the principal pathways to be: changes in family resources, influences on parental supervision, and alterations in access to health care.

Changes in Family Resources and Income

Although PRWORA has many complex components, its primary impact will depend on whether it serves to increase or decrease resources for families who leave and those who remain on welfare. Despite the centrality of this issue, there are limited data on the long-term economic status of families after they leave the welfare rolls. Recent studies of different states have shown that one half to two thirds of people who left welfare were employed when surveyed 3 to 12 months later.^34-38 However, all of these welfare leaver studies are limited by relatively short follow-up periods. These studies also indicate that although many former recipients are working, their earnings do not raise them above the poverty level, because most are employed in low-wage, entry-level work.^34,41

This concentration in low-wage work is consistent with the evidence that families who leave welfare for work face significant barriers to employment, including inadequate education, training, and previous work experience.^42-44 Former recipients also tend to be young single parents with young children.³⁴ Child health is often cited as a barrier to parental employment among welfare recipients.^42-44 This is not surprising because recent studies indicate that children of welfare recipients have a higher burden of illness than do other poor children20% to 40% of families receiving AFDC had children with chronic illnesses, compared with 10% of all poor families.^45-47

Because it may be difficult for women with chronically ill children to meet the new work requirements, they will be more vulnerable to sanctions or benefit terminations for noncompliance. Although states can provide exemptions to work requirements because of child illness, many base such exemptions on strict criteria such as SSI disability designation. Such exemptions, however, will not affect mothers of chronically ill children who have significant health needs and require parental participation in their medical care, but who may not meet SSI disability standards. For example, chronically ill children with respiratory diseases have 3 times the number of physician visits and 4 times the rate of hospitalizations of healthy children.⁴⁷

Although the dramatic declines in TANF rolls may well reflect improved social conditions for some families previously reliant on public assistance, a portion of poor families will likely experience significant hardship, particularly during difficult economic times. Taken together, the barriers to employment, sanctions, and the termination of benefits outlined above will cause some families to experience declines in available income. There is much evidence to indicate that decreases in family resources, including food stamps, resulting from welfare policies have the potential to cause predictable and substantial adverse child health effects.^48-55

The impact of the substantial declines in food stamp participation on the nutritional status of poor children must also be considered. Poor children are 5 times more likely to experience food insecurity and hunger, and they have significantly lower intake of calories, iron, folate, and other nutrients, compared with nonpoor children.^56,57 Undernutrition is associated with numerous adverse health outcomes, including poor growth, iron deficiency, lead poisoning, and impaired cognitive development.^53,55,57-59 In contrast, food stamp use is associated with a lower risk of inadequate food intake and improved nutritional status.

Changes in Parental Supervision: Work Flexibility and Day Care

Parental work requirements included in welfare reform raise important questions regarding childcare arrangements while parents are working. Inadequate or substandard childcare poses a variety of risks, including injuries, communicable diseases, and noncompliance with prescribed medical regimens.⁶⁰ In the case of chronically ill children, flexibility in parental employment as well as appropriate child care are essential to maintaining reasonable health. For example, children with asthma who adhere to their medical regimens are more likely to have their disease well-controlled.^61-63 Depending on the age of the child, parental time and supervision are needed for the recognition of symptoms, administration of appropriate treatments, and attendance at medical visits.^64-67

Former welfare recipients are unlikely to find jobs that provide the flexibility needed to care for a chronically ill child, because most find low-wage work in industries characterized by limited parental benefits or leave policies.^41,68 National data suggest that employed poor mothers and mothers of chronically ill children have less sick leave than do other mothers.⁶⁰ In particular, a substantial proportion of former welfare recipients lacked sick leave or vacation leave or a flexible schedule that might allow them to care for a sick child.^41,46 This disparity between the amount of illness poor families experience and the degree of work flexibility available to them suggests that these parents will be faced with the difficult decision of what to do when their child is sick or needs to go to the doctor and they are unable to take time off from work.

The problem of inadequate day care for current and former TANF recipients was underscored by recent data suggesting a shortage of affordable day care, especially for infants and toddlers.^69,70 The gap in available care is particularly striking for poor families who work nonday schedules because most child care providers are unavailable during these off hours.^69-71 For many families, this means that they will have to rely on unregulated day care, which is more available during nonstandard hours. This contributes to the use of lower quality day care by poor families, a factor that increases the risk of deleterious child health and developmental outcomes.^71-73 PRWORA provided additional funding for child care subsidies, which are critical in assisting former recipients to obtain affordable quality day care.⁶⁹ However, most states are unable to provide child care subsidies to all families who meet the eligibility criteria, resulting in waiting lists and copayments to restrict access to limited child care funds.^69,74

Changes in Access to Health Care

The primary means of providing health insurance to children on welfare has been the Medicaid program. The reduction in Medicaid enrollment since the passage of PRWORA raises concerns about uninsured children in families leaving welfare. Despite provisions for continued coverage, several studies provide consistent evidence that up to one half of children in the examined states were not enrolled in Medicaid 6 months after leaving welfare and that there was limited use of available transitional Medicaid coverage.^34,36,75,76 Medicaid dropout of eligible children is at least partly caused by administrative barriers and the lack of coordination between Medicaid and welfare agencies.^19,25,28 Overall, 40% of former recipients and 25% of their children were uninsured.⁷⁵ Recipients uninsured by Medicaid are unlikely to have employer-based private insurance because the proportion who found jobs providing such insurance varies considerably, from 10% to 60% and even those who have access to employer insurance may not be able to afford the cost of the premiums.^27,28,36 The fact that a substantial proportion of children who leave welfare become uninsured is of concern because research has repeatedly shown that poor children without health insurance experience impaired access to health care. They are less likely to have a regular source of care and are more likely to have difficulty obtaining prescription medications and to delay seeking care because of cost concerns.^77,78 Moreover, uninsured children with a chronic illness are more likely to have had no physician visit in the previous 12 months.^79,80 Thus, welfare policies that unintentionally result in higher rates of uninsured children can be expected to result in a variety of adverse health outcomes and a growing burden on the financial well-being of clinical practices and institutions that care for poor children in the United States.

	IMPLICATIONS FOR CHILD HEALTH POLICY AND CLINICAL PRACTICE

The nature and scale of welfare reform will create new challenges and opportunities for clinicians who care for poor children in the United States. The persistence of continued high rates of uninsurance in the face of a decline in Medicaid enrollment represents a serious barrier to improved child health and will generate new financial burdens for clinical practices and institutions serving poor families. The extent to which uninsurance remains a problem depends on how successful individual states are in enrolling eligible children in their Medicaid and SCHIP programs. Early evidence suggests that there is considerable variation in how effective states have been in their outreach efforts and in overcoming important administrative barriers to enrollment, such as frequent eligibility redeterminations and complicated applications.^25,28,81 In addition, hospitals and clinics that are confronted with higher rates of uncompensated care because of uninsured children will have a strong financial incentive to address this problem.

From a policy perspective, there is an urgent need to understand what portion of the declines noted in Medicaid, food stamps, and SSI is attributable to economic growth or welfare policies. This will be key in determining whether more attention should be focused on revising inherently problematic program policies or on modifying policies in preparation for an economic slowdown. The pediatric community could help to raise public awareness of these trends and help to seek policy-based remedies, including those recommended by the American Academy of Pediatrics.⁸² Although the data on enrollment trends in these programs are from a relatively short time frame, these are the only data currently available. Better and more timely information on child health and well-being would contribute to a more informed debate regarding PRWORA as it approaches its reauthorization in 2002. Policy makers must consider the prospect that if some families are unable to leave welfare and escape poverty during the current robust economy, it is likely that the potential for adverse consequences will increase during an economic downturn.⁸

As enrollment efforts proceed, greater attention should be paid to population groups that are lagging behind. One such group is US-born children of immigrants who avoid applying for Medicaid because of fear that Medicaid receipt will be used as evidence of being a public charge and will adversely affect their application for citizenship.²⁸ Clinicians will need to maintain a heightened awareness of the problem of uninsured children and institute vigorous outreach efforts, such as those suggested by the American Academy of Pediatrics, the Covering Kids initiative sponsored by the Robert Wood Johnson Foundation, and the Insure Kids Now campaign cosponsored by the Department of Health and Human Services and the National Governor's Association.^14,83,84

Clinicians caring for low-income families may need to alter patterns of practice and gain new knowledge to meet the different demands welfare reform may generate for their patients. Time limits will place new economic burdens on families. Maternal work requirements may require greater interactions by pediatricians with day care providers to oversee health care regimens and extended practice hours to accommodate newly working parents with limited work flexibility. Clinicians will also need to serve as sources of information and assistance for families who may be eligible for Medicaid, food stamps, and transitional child care subsidies even after welfare benefits end. Practitioners should be aware that in many states, medical waivers may prove to be a critical mechanism for extending TANF time limits, altering maternal work requirements, and maintaining health insurance for children with special health care needs. To provide optimal assistance for their patients, clinicians caring for poor children should have a working knowledge of local welfare policies and should develop linkages with social service agencies and community-based organizations. For example, one urban pediatric clinic has instituted a model of routine screening regarding health insurance, food availability, and welfare receipt followed by a referral and follow-up process to assist families in obtaining needed services.⁸⁵

The clinical arena could also serve as an essential source of empirical data on the impact of welfare reform on children. Clinical cohorts, particularly those focused on children with chronic illness, could provide information on the health of children who undergo changes in their welfare status. Health care providers could also play an important role in identifying families who fall more deeply into poverty under welfare reform provisions even if the overall experience of the entire disenrolled population seems positive. Such narrative-based medicine can use the power of patients' stories to set research and policy agendas.^86,87 Practitioners can contribute to welfare reform policy debates by providing clinically relevant, qualitative insights regarding sentinel cases to effectively supplement or trigger larger, quantitative evaluations and epidemiologic studies. Although we await forthcoming data from sources such as the Urban Institute's National Survey of American Families as well as the Census Bureau's Survey of Program Dynamics, the availability of clinically applicable data on child health in these studies will be limited.^88,89

Clinicians are in a position to make significant contributions to promoting the health and well-being of children during the implementation of welfare reform by using the experience of clinical practice and applied research to inform the development of child health policy. Because control over welfare regulations has fallen increasingly to the states, health care providers are in a better position to influence local policy through their advocacy efforts. Through informed advocacy, the pediatric community can ensure that the health of children is included in the assessment of the effects of social welfare policy. Through our clinical experiences, we can ensure that the discussion of welfare reform is informed by a deeper understanding of the human experience that the numbers imply.

	ACKNOWLEDGMENTS

This research was supported in part by funding from the Ford Foundation, the Peabody Foundation, the National Institutes of Health, National Institute of Allergy and Infectious Diseases, the Health Resources and Services Administration, the William T. Grant Foundation, and the Alpert Endowment for the Children of the City.

We thank Howard Bauchner, MD, who reviewed previous drafts of this article, and Michelle Villarta and Giliane Joseph, who assisted in the preparation of the manuscript.

	FOOTNOTES

Received for publication Dec 23, 1999; accepted May 8, 2000.

Reprint requests to (L.A.S.) Boston Medical Center, Department of Pediatrics, Dowling 3 S, 1 Boston Medical Center Pl, Boston, MA 02118. E-mail: lauren.smith{at}bmc.org

	ABBREVIATIONS

PRWORA, Personal Responsibility and Work Opportunity Reconciliation Act; AFDC, Aid to Families With Dependent Children; TANF, Temporary Assistance for Needy Families; SCHIP, State Child Health Insurance Program; SSI, Supplemental Security Income.

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