Pursuing Permanent Poverty Solutions: 2018-17 Welfare & Health Care Reforms

Today, we continue our recap of the 2017-18 legislature by looking at the largest and most poorly understood aspect of state government, welfare and health care.

Human services spending amounts to more than 40 percent of the entire operating budget. That’s not surprising since Medicaid (health insurance for the poor, disabled, and elderly) is bigger than any other program in the General Fund. So, getting our welfare policies right is not only key to reducing poverty, but also growing the economy and balancing our budget.

Since the landmark welfare reforms of 1996, both states and the federal government have been gradually eroding work requirements and other measures designed to move individuals from dependence to independence. In the 2017-18 session, Pennsylvania lawmakers made a serious effort to restore these rules and promote work—the only permanent pathway to self-sufficiency.

These efforts coalesced around legislation requiring the administration to seek federal permission to apply work requirements for healthy adults on Medicaid (HB 2138) and legislation to restrict exceptions to work requirements in the food stamp program (HB 1659). Both measures have been proven to help people increase their incomes and improve their quality of life. In fact, we estimate removing work exemptions in food stamps alone could add up to 100,000 Pennsylvanians to the workforce. And we need workers. Earlier this week Commonwealth Foundation CEO Charles Mitchell published an article in Investor’s Business Daily detailing how manufacturers can't find enough employees.

Unfortunately, these admirable legislative efforts were vetoed by Governor Wolf.

While those vetoes were disappointing to those who want to find long-term solutions to poverty, lawmakers did pass, and Governor Wolf signed two meaningful pieces of legislation. One increases the penalties for welfare fraud (SB 6) and another reduces food stamp trafficking (SB 1127).

Related to Medicaid, attempts to tackle the rising cost of health care through regulatory reforms never crossed the finish line. This includes licensing reform to expand the supply of medical providers (SB 25) and protection for alternative health care models like direct primary care (HB 1739).

The resolve of state lawmakers to find permanent solutions to poverty and their willingness to admit that ever-growing welfare rolls are cause for concern, not celebration, is a significant improvement from past years. It’s essential to seize on this growing momentum for reforms that actually help people. Going into 2019, lawmakers should prioritize the following reforms.

1. Bring back food stamp work requirements. In 2018, the Department of Human Services requested work waivers for 59 Pennsylvania counties, plus selected municipalities. With low unemployment, worker shortages, rising wages, and a growing economy it is time to eliminate work waivers, or at least give legislators insight and control over the process.
2. Refocus Medicaid resources on those who need it: Medicaid now covers about 800,000 able-bodied adult Pennsylvanians, about half of these individuals report no income. Other programs like food stamps and TANF, or cash assistance, require healthy individuals to work or at least go to school or volunteer for a modest number of hours per week. Lawmakers should once again pass work requirements and other reforms that help healthy people gain the dignity of work and self-sufficiency while preserving Medicaid’s resources for those who need it most.
3. Let medical providers serve more people: Mid-level providers, such as nurse practitioners and dental therapists, are prevented from practicing in under-served rural areas because of stringent state licensing regulations. There is no evidence these regulations produce better health outcomes. Similarly, allowing telemedicine services without restrictions on the location of the doctor or patient expands consumer choices and drives down costs.
4. Do not restrict innovative health insurance options: The Trump administration has created lower-cost options for individuals and small businesses looking for affordable insurance. These include short-term duration plans, association health plans, and pending health care reimbursement arrangements. Lawmakers should ensure existing state laws and/or new regulations do not impede these innovative options.
5. Embrace different health care models: Direct primary care and cost-sharing ministries provide affordable health care services outside of the traditional insurance model. Insurance regulations should not apply to these and future innovations because they aren’t insurance.

By persistently sticking to their principles, lawmakers can continue to refocus our welfare system on moving individuals to independence and improve health care access for all Pennsylvanians.

Click the images below for our other 2017-18 session recap blogs.