Welfare reforms put children at risk for health care insurance, study at University of Texas at Austin reports

May 15, 2002

AUSTIN, Texas—Parents moving off welfare and into the work force put children at greater risk of not having health care coverage, according to a new study by University of Texas at Austin researchers.

Dr. Laura Lein

Dr. Laura Lein

Children were less likely to be insured if they had an employed parent, if they had two parents in their home, if their family had been off welfare for a long time or if they were Mexican American, said Dr. Laura Lein, professor of social work and anthropology.

The four-year research project, based at Johns Hopkins University, examines health insurance coverage for children and their caregivers in low-income urban neighborhoods. Families in three cities — San Antonio, Chicago and Boston — were studied.

Results from the "Welfare, Children & Families: A Three-City Study" project, which began in December 1998, are coming out in a series of policy briefs.

The research project surveyed 800 households in San Antonio to see how changes in welfare policy affect the daily lives of welfare dependent and working-poor families and children. A team of graduate students working with Lein and Dr. Ronald Angel of sociology also followed a panel of 50 families in low-income areas over a year and a half.

"We were looking at the impact of welfare-reform policies on these families," said Lein. Welfare reform was instituted in 1995 by the state of Texas and by the federal government in 1996. The federal welfare law is scheduled for reauthorization in 2002.

"If the goal was to drop welfare rolls, the reforms have been successful," said Lein. "However, most studies at the national and state levels show that the rate of employment of the people who have left welfare is between 50 and 60 percent.

"Most people who leave welfare, whether employed or not, remain in poverty," said Lein. "And, the longer a low-income family has been off welfare, the less likely they are to be covered by health insurance of any kind. The fact is, many working and non-working low-income families remain uninsured."

The researchers, in particular, examined how parents looked at federal and state assistance programs. They found parents highly value Medicaid and go to great lengths to obtain it for their children, but some are unable to obtain or afford health coverage for themselves.

"One of a family's biggest problems is losing Medicaid," said Lein. "Sometimes they don't understand their eligibility or their low income isn't low enough to meet eligibility requirements. In Texas, particularly, Medicaid and food stamps are highly valued because actual welfare cash payments are very low and always have been."

Results of the new study show that Medicaid coverage in Boston and Chicago is far higher than in San Antonio.

In families with incomes between 150 and 199 percent of the federal poverty line, a category that includes many working poor families, only 5 percent of San Antonio children receive Medicaid compared to 35 percent in Chicago and 64 percent in Boston. Poverty line is a standard set by the federal government for families of specific sizes. The 2002 poverty line for a family of four is $18,100.

"These across-city differences are clearly affected by state policy," said the researchers, adding that Texas has not extended coverage much beyond what is federally required. Massachusetts, on the other hand, has instituted most of the optional coverage allowed by federal law.

Findings also show that a child's ethnic group matters. A larger percentage of Mexican Americans, compared to other Hispanics or African Americans, lack coverage. Percentage of children with no health insurance by race and Hispanic ethnicity is 9 percent for white and non-Hispanic, 8 percent for African-American, 6 percent for Puerto Rican, 9 percent for other Hispanic and 27 percent for Mexican American.

These statistics for Mexican Americans are true in Chicago as well as San Antonio.

In addition, Lein noted that two-parent families always have posed a problem for welfare policy because society expects families that include an able-bodied male to be self-supporting.

Texas is now participating in another federal program, the Children's Health Insurance Program (CHIP), which covers children who are ineligible for Medicaid. "This offers a very important service to low-income families," said Lein. "But we are concerned that not enough information about CHIP is getting to them, and the CHIP program does not include coverage for adults."

To reduce the "unintended inequities" described in the findings, the health insurance safety net for poor American families will require much more attention, the researchers said.

For further information contact: Laura Lein in the School of Social Work, (512) 471-9248.