Welfare Reform and Indirect Impacts on Health

Marianne Bitler, Public Policy Institute of California (PPIC)
Hilary W. Hoynes, University of California, Davis

Recent welfare reforms led to significant changes in the safety net for low income families with children, beginning with state waivers from the former AFDC program, and culminated with passage of the Personal Responsibility and Work Opportunity Act, which eliminated AFDC and replaced it with TANF. These reforms imposed time limits and financial sanctions, strengthened work requirements, enhanced financial work incentives, and limited the eligible population. The main goals of the reforms were to increase employment, reduce reliance on welfare, and encourage formation of two-parent families. We explore the effects of reform effects on health insurance, health care utilization, and health outcomes, using experimental data from five states' welfare waivers to evaluate treatment-control group differences in outcomes. Findings vary across state. Effects on health insurance coverage several years after random assignment are small and in line with findings from the non-experimental literature. Effects on utilization and health status are smaller and generally insignificant.