JEFFERSON CITY (KMOX) – A letter from the Missouri state auditor prompted legislators to examine a proposed welfare transfer program, revealing potential savings as well as potential harm.
The House Governmental Oversight and Accountability committee discussed a plan Monday to transfer state welfare participants to federal disability aid. Although the program could save $28 million in general revenue, lawmakers raised concerns over the program’s effect on poverty and the moral implications of sending participants to a federal aid program some believe is broken.
The Missouri Department of Social Services negotiated a contract with Public Consulting Group, based out of Boston, Mass. If the contract is approved, PCG would help the department identify state welfare recipients currently receiving benefits from the Temporary Assistance for Needy Families program and Medicaid that could qualify for federal welfare from disability programs.
Brian Kinkade, Deputy Director for the Department of Social Services, said his department chose to hire a third party because it lacked the necessary expertise, and acquiring it would be too costly.
Under current negotiations, PCG would be paid for each federally approved participant, rather than being paid a flat fee. PCG would receive $2,300 for each participant receiving benefits from TANF or Medicaid and anywhere from $500 to $1,750 for those under foster care.
Under current state programs, TANF recipients are limited to five years of aid and children are eligible for Medicaid between the ages of one and 19. The department’s proposed program would transfer state welfare recipients to the Supplemental Security Income program or Social Security Disability Insurance. Under SSI, participants would be eligible for Medicaid, whereas those under SSDI would be eligible for Medicare. To qualify for SSDI the participant would need to have work history, as the program is funded by social security payments.
“If the people should be paid out of SSI and they’re not, well, what do you suggest? I don’t think they’re trying to do anything improper here other than aligning interest under the correct program,” said Richard Macintosh, a representative for PCG.
Rep. Jay Barnes, R-Jefferson City, said that the discussion needed to avoid a purely “Gradgrindian” approach and look at the issue from a moral perspective.
“Should the state of Missouri be paying money for a private company to shift folks that are down on their luck into a program that will trap them in poverty, likely forever?” Barnes said.
The program would classify participants under three categories: high, moderate and lower priority. The classification is based on existing diagnoses and other medical evidence pointing to disability. Those in the moderate and lower priority levels would have a harder time qualifying for federal aid.
Barnes said the system would lead to lifetime poverty for those in the lower categories when those with borderline cases are faced the choice of remaining on $750 per month disability welfare or finding employment and subsequently losing their benefits.
“It certainly sets up an incentive structure that makes it difficult for them to choose to work; it makes it economically irrational,” said Barnes.
The distinction between moral and economic issues blurred when committee members considered the implication of paying PCG for each person approved to switch to SSI or SSDI when the switch could still burden the state with long-term Medicaid payments.
Rep. Todd Richardson, R-Poplar Bluff, said it would also put participants in a shaky federal program.
“If you don’t want to call it broke we’ll call it insolvent,” Richardson said.
Brian Kinkade, Deputy Director of the Department of Social Services, explained the benefits already incurred from negotiations, stating that the department opted to pay for each person approved for federal aid, rather than a flat start-up fee costing millions of dollars.
The department drafted a letter in mid-March that would be sent to those determined to be eligible for federal disability aid. The original letter said non-respondent state welfare participants would be sanctioned. Kinkade refuted this claim, saying that the draft was updated in April to remove any threat of sanctions.
Now it is up to legislators to decide where the state’s money is best spent: funding aid for state welfare recipients or funding the switch to federal programs.