For over three years Congress has postponed reauthorizing Temporary Assistance for Needy Families (TANF) and related programs such as Transitional Medicaid Assistance (TMA). TMA ensures that families moving from welfare-to-work do not lose their health insurance upon entering the work force. Although Congress has extended TMA authorization numerous times over the last three years – usually in three- or six-month increments – the latest extension will run out at the end of December, unless the Senate and House act to renew this important program. If the two chambers allow TMA to expire, families who work hard and play by the rules will suffer the consequences.
One of the best examples of families who work hard and play by the rules is those transitioning from welfare to independence. Currently, transitional Medicaid allows them to maintain their health insurance through the Medicaid program for up to a year after leaving welfare, even if their increased income would otherwise make them ineligible for Medicaid. Without transitional Medicaid, parents who leave welfare stand a substantial chance of becoming uninsured, although their children are more likely to maintain coverage through Medicaid and the State Children’s Health Insurance Program (SCHIP).
Former welfare participants, like other low-wage workers, have problems securing and keeping private health insurance. Most low-wage jobs – the kind of jobs that people leaving welfare often obtain – do not offer insurance coverage. Even if their new employers offer health insurance, new employees are commonly subject to waiting periods before they can enroll. In addition, if these parents hold part-time jobs, they may never become eligible for private insurance because enrollment requirements are often more restrictive and coverage is less available. Finally, when low-wage workers do become eligible for private coverage, they often find it difficult to afford the employee share of their insurance premiums. This is especially true in the retail sector. In 2003 workers in retail companies with less than 50 employees paid on average $3,091 for family coverage. Workers in larger retail companies paid on average $2,594 for family coverage. This means that a retail employee earning $10 per hour would on average contribute 15 and 13 percent respectively of their gross income towards their share of the health insurance premium – an amount they can ill afford.
TMA is also cost effective in a time in which health care costs are growing faster than any other segment of our economy. Having health insurance coverage for a longer period of time allows people to obtain preventive and primary health care services and avoid more costly trips to the emergency room, as well as costly inpatient hospitalizations. A wealth of research has found that improving continuity of coverage improves health outcomes and the quality of physician-patient interactions. Continuous coverage also reduces unnecessary care. In addition, ensuring that parents have health insurance has positive consequences for children as well. Research has demonstrated that if parents have health coverage, their children are far more likely to be insured compared to children of uninsured parents. For these reasons, many states have expanded Medicaid and SCHIP coverage to parents as well as children and found that uninsured rates for eligible children are far lower than in states that have not expanded coverage to parents. Furthermore, parents are key facilitators in their children’s utilization of health care services. If parents have health coverage, their children are far more likely to have access to health services compared to insured children of uninsured parents.
Parents who have played by the rules and worked hard to establish their family’s financial independence should not have to contend with an unanticipated loss of health insurance coverage. TMA fulfills its dual mission of promoting work and maintaining the benefits of health insurance – this program enables families to leave welfare with dignity and maintain the supports they need as they re-enter the work force. Families are better off when parents work, and when parents have health insurance – but families are harmed when parents lose their health care coverage and join the ranks of the nearly 46 million Americans without health insurance. Transitional Medicaid is on its last leg.
Unless congressional leaders take action to prevent Transitional Medicaid Assistance from expiring at the end of the month, one of the important supports put in place to make welfare to work a reality for many families will come to a premature end. Hard-working families seeking independence and a better life deserve better.
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