The numbers on welfare and the budget challenge

By Jack Nicholas, Special to the BDN
Posted Dec. 17, 2010, at 10:36 p.m.

Gov.-elect Paul LePage faces a daunting challenge balancing the General Fund budget for the 2012-13 biennium, which is estimated to be out of balance by $802 million. The hard work begins when program impacts are considered.

Changes in Medicaid eligibility for poor and low-income adults and children probably are under consideration. If Medicaid health care is dropped for a poor adult with a chronic illness or a child, what is the effect on that person, the family, the health care industry and the private health care consumer?

Welfare reform likely will be part of the budget. Recent information oversimplifies this important policy area regarding people served and budget impact.

There are four welfare components: public assistance; Medicaid authorized under the Title XIX plan; Children’s Health Insurance Program authorized under the Title XXI plan and Low Cost Drugs for Maine’s Elderly and Disabled. The last three come under MaineCare.

Public assistance and MaineCare spending are estimated to be 20 percent of the $6.85 billion projected General Fund budget for the 2012-13 biennium.

Public assistance includes Temporary Assistance for Needy Families, or TANF; Supplemental Nutrition Assistance, formerly Food Stamps; and General Assistance.

TANF provides to families with children cash assistance that is 66 percent below the federal poverty level for a family of three. Families are assisted in achieving economic self-sufficiency through Additional Support for People in Retraining and Employment, or ASPIRE, with a General Fund budget of $6.8 million in fiscal year 2011.

Lifetime financial assistance is available up to 60 months that may be exceeded under special circumstances. Forty-three states provide benefits up to 60 months. Four percent of recipients exceed 60 months and are typically disabled. Eighty-five percent of beneficiaries receive cash assistance for two years or less. Two-thirds of recipients are children. When an adult violates TANF rules, financial assistance is terminated for the adult, not the children. The FY 2011 General Fund budget for TANF is $25.1 million.

Supplemental Nutrition Assistance provides food assistance to low- and no-income individuals and families with children. Benefits are 100 percent federally funded. Maine has the second-highest participation rate in the nation among eligible individuals at 91 percent, which is encouraged by the federal government. Maine has one of the lowest error rates in the nation, 2.15 percent compared to a national average of 4.36 percent.

General Assistance flows through the cities and towns to provide emergency assistance to families and individuals through voucher payments for critical living expenses. The $7.4 million FY 2011 General Fund budget reimburses half or more of local expense. Past reduction proposals have been rejected as a shift onto the local property tax.

The FY 2011 General Fund budget for Low Cost Drugs for Maine’s Elderly and Disabled is $4.9 million, with $12.4 million coming from the Fund for a Healthy Maine. Recipients must be 62 years of age or older, 19 years of age or older and disabled and meet low-income guidelines.

MaineCare serves vulnerable populations that include children and adults with mental illness, mentally disabled children and adults, children and adults suffering from substance abuse, elderly poor, severely disabled children and other disabled persons. Individuals must meet low-income guidelines and age or disability requirements. General Fund Medicaid spending for these populations is estimated to be at least 40 percent of the projected $1.29 billion General Fund Medicaid spending for the 2012-13 biennium.

Services for mentally ill adults are governed by a court consent decree for which a compliance plan has been in place since 2006. Court jurisdiction ended for two cases through agreement with tracking, reporting and timelines for children in need of in-home behavioral supports and case management and mentally disabled adults waiting for services. The consent decree that governed services for mentally disabled adults that led to the closing of the Pineland Center was recently ended with the expectation of continued compliance.

Mandatory beneficiaries and mandatory health and long-term care are required for participation in Medicaid. States may cover optional populations and health care services. Proposals to eliminate optional health care services have been mostly rejected.

Children and adults are eligible for health care through optional Medicaid. Optional and mandatory health care has lessened hospital bad debt and charity care which otherwise would have been shifted onto private health care premiums.

Children in optional MaineCare represent 5.4 percent of MaineCare enrollees and 1.9 percent of expense. The prospect of dropping Medicaid health care for a child, therefore, has broad cost-benefit implications. The impact on the child and family must be assessed. How the lack of investment today increases the consumption of government services in the future also should be considered.

Budget balancing is never easy.

Jack Nicholas was commissioner of the Department of Health and Human Services and served as state budget officer for Govs. John McKernan and Angus King. He is the treasurer of the Maine Children’s Alliance.

http://bangordailynews.com/2010/12/17/opinion/the-numbers-on-welfare-and-the-budget-challenge/ printed on April 24, 2014