News Release: State House Promotes Pathway to Independence in Welfare Code

House lawmakers yesterday passed significant welfare reforms to reinforce the safety net for those most in need while helping more Pennsylvanians escape the cycle of poverty and move from dependency to self-sufficiency.

These reforms, which are part of the budget-related Human Services Code and will curb unsustainable growth in welfare costs, include reasonable work requirements for Medicaid.

“Pennsylvanians should be encouraged that lawmakers are standing up for hardworking families and working to ensure everyone is empowered to achieve independence,” commented Elizabeth Stelle, director of policy analysis for the Commonwealth Foundation. “While Gov. Wolf is demanding immediate tax hikes, lawmakers are taking a responsible, long-term approach to ensure state spending is sustainable and help is available to those who most need assistance.”

The move comes after Gov. Wolf ignored the state constitutional requirement for a balanced budget and allowed the Legislature’s $32 billion spending bill to become law with no way to pay for it. Wolf himself has reportedly been the obstacle to balancing the budget by insisting substantial tax increases on Pennsylvanians be part of any revenue plan.

The Human Services Code, now before the Senate, contains many improvements, including the following game-changing reforms:

1. Medicaid Work Requirement Waiver

Meaningful work requirements for healthy individuals create a pathway to independence. When Kansas and Maine strengthened work requirements in their Food Stamp program, enrollment dropped by 75 and 80 percent, respectively. At the same time, those leaving the program saw their incomes more than double. At least six states have already submitted waivers to the federal government seeking permission to require the able-bodied to work in exchange for taxpayer-funded medical insurance.

2. Cost-Saving Waiver to Address Cost Overruns

Year after year, Pennsylvania faces Medicaid cost overruns, threatening program viability and resulting in substantial supplemental appropriations. In fact, 2016-17’s $400 million in supplemental appropriations came entirely from human services and accounted for a quarter of the budget deficit. This reform discourages superfluous spending and empowers the Department of Human Services to develop solutions to avoidable cost overruns which create pressure to raise taxes.

3. Premiums from Well-Off Families Utilizing Medicaid

Unless significant changes are made to Medicaid, participants will see serious benefit cuts and narrower provider networks as program growth far outpaces economic growth. These cuts would particularly hurt families with a disabled child requiring specialized medical care. Instead of cutting services for everyone, this provision instructs Pennsylvania to require a $50 monthly premium payment from families with an income over 1,000% of the federal poverty level. For a family of four the cut-off is $246,000. This is a common-sense way to protect care for disabled children.

4. Better Fraud and Abuse Protections

The human services code also requires DHS to seek out third-parties to evaluate programs that identify and prevent fraud, waste, and abuse in Medicaid, Food Stamps, and TANF or cash assistance. Evaluators will have six weeks to identify potentially fraudulent activity.

“As the budget revenue standoff continues, lawmakers should take every opportunity to enact policy changes that benefit all Pennsylvanians,” Stelle commented. “What better way to do this than by protecting the most vulnerable while empowering all Pennsylvanians to build better futures for themselves and their families.”

Elizabeth Stelle and other Commonwealth Foundation experts are available for comment. Please contact Gina Diorio at 862-703-6670 or [email protected] to schedule an interview.

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