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Recommendations
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Assessing the New Federalism: Policy Analysis Project: Health Policy for the Low-Income Population: Major Findings from the Assessing the New Federalism Case Studies (11/01/98)
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In recent years, opponents of additional state flexibility have argued that greatly reducing federal rules could result in a "race to the bottom" as states compete to attract businesses with lower tax rates, which may necessitate minimizing benefits to the low-income population. The contention is that, without federal minimum standards, state fears of becoming "welfare magnets" will result in benefit levels below what states might provide if it were not for the interstate competition. These case studies found little evidence of this type of interstate competition, at least as it relates to health care. Instead, Medicaid coverage and benefits are determined mostly by intrastate political culture and availability of tax revenues. Unlike cash assistance welfare, health care is viewed as a positive good that everybody should receive. Although neither the money nor the mechanism to implement that conception is available in any state, declining Medicaid caseloads are matters of concern for state officials while falling cash welfare caseloads are matters of pride. The race to the bottom is further impeded by large, well-organized, well-financed provider interest groups that depend on Medicaid for their survival and lobby to make sure that the program is adequately financed. Finally, Medicaid long-term care services benefit more than the poor, giving the middle class a reason to support the program. In many cases, the elderly parents of middle-class adults are the ones who receive Medicaid nursing home benefits.
But if there is no "race to the bottom," then the rationale for federal rules must be that some states will not do the "right thing" unless forced to do so by the national government. The key problem for policymakers is to decide when and where state variation and accommodation of local conditions makes sense and where there is one standard way of doing things with which all states should comply
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Assessing the New Federalism: Policy Analysis Project: Cash Assistance in Transition: The Story of 13 States (12/01/98)
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The ultimate key to success in these efforts will lie in implementation and organizational reforms in the way services are actually delivered to clients.
In many states, new cash assistance policies represent a major departure from the past. Since most states already had more employment-focused policies under way before TANF, diversion assistance and time limits clearly present the newest implementation challenges. The strongest message we heard in our site visits to state and local welfare offices was that most states will adopt new procedures or complete transitions begun under waivers to ensure that new work-focused programs will be a success. But many respondents were worried that the TANF time clocks for work participation and benefit termination were ticking away while these reforms were still getting under way, raising the specter that--even in a good economy--some state changes focused on service delivery might come too late for those whose clocks are ticking.
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