Ending the Medicaid Poverty Trap With Welfare Reform

As Pope Francis has explained, “Work is fundamental to the dignity of a person. Work…‘anoints’ us with dignity, fills us with dignity, makes us similar to God” and “gives one the ability to maintain oneself, one’s family, to contribute to the growth of one’s own nation.”

In 1996, President Clinton and a Republican Congress enacted welfare reform legislation requiring welfare recipients to work. The concept is simple. Americans – and Missourians – are not stingy when it comes to helping people who are willing to help themselves. We’re willing to help those who have fallen on hard times temporarily so that they may get back on their feet. But we aren’t willing to continue to distribute hard-earned taxpayer dollars to people who show no personal responsibility and would rather live off a government check. Welfare programs should be a safety net for the industrious, not a hammock for the indolent.

For the able-bodied, a life without work is a life lacking purpose. Welfare reform rejected the idea that certain people were destined for a lifetime of poverty and unable to help themselves. It insisted that they use their talents to live a productive life. And it worked. Employment and earnings for single mothers increased significantly. Welfare caseloads decreased. The Brookings Institute, a liberal think tank, concluded welfare reform “has been a triumph for the federal government and the states – and even more for single mothers.”

House Bill 1901, which I have co-sponsored, attempts to bring the principles of welfare reform to our state Medicaid program by requiring able-bodied Medicaid recipients to participate in the workforce to remain eligible for Medicaid. Under the current system, it is morally reprehensible but economically rational for a person at the lowest end of the income scale to refuse work in order to remain eligible for Medicaid. Consider a single mother who makes $3,000 a year. If she accepts a job that pays her an additional $5,000 per year, she loses health care coverage worth approximately $5,200. It is economically rational for her to refuse the new job because. After all, she’s essentially working for free. But by turning down this first job, she’s much less likely to get the next job which may lift her out of poverty. The current system is a welfare trap.

HB 1901 moves Missouri out of the welfare trap. It compels capable recipients to work, and it rewards such work by increasing eligibility for the working poor. By passing this bill, Missouri could lead the nation in bringing welfare reform to Medicaid.

On Monday, the House Committee on Government Oversight and Accountability heard three other bills designed to ensure welfare benefits are reserved for those who need it most and to improve health outcomes of recipients.

House Bill 1861, sponsored by Rep. Wanda Brown, is a direct response to an expose from Auditor Tom Schweich, who uncovered 366 cases of welfare recipients spending Missouri welfare benefits for several months in other states, including one such recipient, for five months, in the Virgin Islands. HB 1861 would bar benefits for any recipient who doesn’t use them in Missouri for 90 days – eliminating wasteful and fraudulent entitlement spending by recipients who are no longer Missourians.

House Bill 1864, also sponsored by Rep. Brown, requires the Department of Social Services to use data analytics software to cross-check the eligibility of welfare recipients to ensure that they are indeed eligible. The department estimates that it will save at least $4 million a year in Medicaid. As chairman of the committee, I plan to combine these bills and require an eligibility cross-check for recipients who have left the state, likely increasing savings.

House Bill 1879, which I sponsored, encourages healthier lifestyles for food stamp recipients by starting a pilot project to provide bonuses for purchases of fresh fruits and vegetables at Missouri  farmers’ markets. The goal of this legislation is to help fight the public health crisis of obesity. We know that eating fresh fruits and vegetables leads to better health, but they aren’t always available or affordable for food stamp recipients. This bill gives an added incentive and ability for recipients to eat healthier foods. Plus, the bill benefits local farmers and small business owners by growing the market of people likely to buy their homegrown goods.

The committee will combine these bills and a few others to create a welfare reform omnibus bill, carried by Rep. Brown, to save taxpayer money and reduce waste, fraud, and abuse.