In the Spotlight

News & Features
Welfare Reform and Health Care
By Cara Hetland
October 16, 1998
Click for audio RealAudio 2.0 14.4
Part of the MPR Welfare to Work Series

VILMA MARTINEZ THOUGHT SHE HAD A FULL-TIME JOB raising five boys. For 10 years she was out of the workforce. Then came welfare reform. Vilma says she needs two jobs to make ends meet.

It's 5:00 pm in downtown Sioux Falls - people are heading home after work. But tucked between two buildings on Main Street about a hundred people line up for a meal at the local soup kitchen called "The Banquet." Some are homeless, many are on welfare but are working under the new welfare reform program. However, they say they're still finding it hard to make ends meet. That's why they're here for a meal.

They can also get a free flu shot. It's a preventative measure city and county officials believe is important particularly for low income people. The Centers for Disease Control does not list low income as an at risk factor for the shot. But the city does. When asked, people in line all have health care problems and more over problems with paying bills. Roxanne has four children and with recent changes to the state Medicaid program, her children now qualify. She says that and county services help. But when it comes to the hospitals, she's not so favorable.

Roxanne: My son, before he was on Medicaid and that he was supposed to go in and get sleep apnea tests and they wanted money down before they'd take him in, so I'm not too thrilled with the hospitals.

Robin says because she had a job she didn't qualify for Medicaid or the company policy. She said her hospital debt from last summer keeps her on welfare.

Robin: I had my gall bladder out last July and that was before I was on Medicaid and that was like $10,000. I still owe on that no assistance. We pay for people who are low-income people who don't qualify for any other state or federal medical type of program.

Hugh Grogan is the Minnehaha County Welfare Director. He says two-thirds of the county $2.3 million welfare budget goes toward health related costs. It's a growing budget that officials wanted to get a handle on. In 1997 South Dakota lawmakers at the urging of the governor tightened the definition of indigent people to someone who is not able to work. Meaning, if someone goes to the hospital without insurance and is deemed able to work but chooses not to, then the county won't pay the bill. Grogan says it was a way to force the two large private non-profit hospitals to do more charity work while saving the county some money.

Grogan: It looks like we will have some significant savings over the last couple of years in our medical costs. And we're still spending a lot of money but we will probably be down maybe by a quarter to a third in our overall medical cost and a lot of that is directly related to the changes in how we reimburse hospitals for the indigent care that's provided.

Grogan says if there's an economic down-turn and more people are unable to pay medical bills the counties and the state will be forced to find additional money.

In Minnesota, the burden of health care doesn't lie with local governments but with the state sponsored health insurance program. Minnesota Care Hennepin County Director of Health Policy Dan McGlaughlin says only 10 percent of the welfare budget goes to health care related costs because the majority of people on welfare qualify for Medicaid or Minnesota Care. He says if someone falls through the cracks, the county subsidized hospitals absorb the costs. He says the insurance programs are the cost savers for the county.

McGlaughlin: I think our major emphasis is getting people who are eligible enrolled in the programs that are already there. For example, Medicaid has 50 percent federal share, so the more people we can get enrolled in that program, the less state dollars and county dollars are involved. And if you look nationally, some of the Medicaid roles have gone down by 25 percent - that hasn't happened in Minnesota because we've been working hard at keeping people on those programs. So, yes, it's a possibility there would be more county responsibility but we're going to work hard to see that it doesn't happen.

There are still some cases where the county responsibility goes from cradle to the grave.

At this Sioux Falls funeral home Karl Kobahl shows what's referred to as the county casket. It's a gray-blue felt-covered pressed wood casket with a cream-colored cotton liner. It sells for $595 and is the least expensive of all caskets available locally.

Minnehaha County pays for about 30 funerals annually. But welfare director Hugh Grogan says the responsibility to bury a person lies first with the family and the tax payers only as a last resort. He says many elderly people transfer assets to children in order to qualify for Medicare and other federally funded nursing home programs. He says that doesn't automatically qualify them for a county funeral.

The same policy applies in Minnesota. In 1996 Hennepin County spent a half a million dollars on burials for 534 people. Officials say that's a relatively low number given that at any given time there are 20,000 people on welfare in the county. The county pays up to $1,900 in funeral related costs. In Sioux Falls the county pays $1,700 for funerals. Funeral director Karl Kobahl says that's about a $2,000 loss to the homes. He says that doesn't deter him from providing the same services regardless on their ability to pay.

Kobahl: In the upper Midwest I think we're all very traditional people and we believe that everybody really deserves a funeral with dignity and respect regardless of payment, so if it's a county funeral I feel we should provide full services.

Kobahl says in larger cities like Chicago he's seen funeral directors encourage the poor to use cremation or will only provide grave-side service as a way to cut costs. He says that hasn't come to the midwest yet but it could become an issue as overheads continue to rise.

The fear for county welfare officials is an economic downturn too soon before the welfare to work program has a chance to get people on their feet and businesses to provide adequate health care insurance.