California Health Clinic's Survival Depends On Overcoming Welfare Reform's Quirks

The women and children outside Sylvia Drew Ivie's health clinic chat away in a dozen languages. Inside the second-floor office, the sound of "Days of Our Lives" echoes off the waiting room's shiny linoleum floor as a mother bounces a distracted child on her knee.

This 60-employee clinic is the only nonprofit health agency within a 10-mile radius serving primarily poor and immigrant neighborhoods. But because of welfare reform, this clinic and others like it all over the country face an uphill struggle to survive.

"Congress decided to end welfare as we know it," says Ms. Ivie. "But they did not intend to erase the health safety net that is often bureaucratically tied to welfare. Especially in low-income neighborhoods, the two pathways are inextricably linked."

The health safety net - namely Medicaid health benefits - is currently linked to two specific programs: Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI). Under the old system, people who qualified for either AFDC or SSI automatically qualified for the Medicaid benefits - they didn't apply for health benefits separately.

This summer, AFDC, SSI, and the health care benefits will all be cut back, and many recipients will be dropped. However, some of the people who are dropped from AFDC and SSI will still be eligible for the Medicaid health benefits. But since these people didn't need to apply separately for health benefits before the reforms, they might not realize that they are still eligible for the benefits, and might not apply for them.

The situation threatens clinics like Ivie's because they operate on a thin economic margin - losing paying customers who might be entitled to benefits but don't know it, means the clinic can't pay its bills. That, in turn, affects Ivie's ability to provide other services.

The clinic needs grants from public and private donors to pay for programs such as family counseling and parent training. It cannot win these grants if it is not financially stable.

The challenge, says Ivie, is to inform local lawmakers about the implications of their actions before they act. While the federal government has passed responsibility to the states, many are still deciding how such responsibility will be shared with cities and counties. California's struggle in particular is being watched by others for lessons because its welfare caseload exceeds that of 21 other states combined.

On Ivie's desk is a list of recommendations she and a coalition of health organizations are sending to California Governor Pete Wilson and legislators who have promised a new plan by May. The backdrop for the recommendations is a major study released recently, showing more than 400,000 families in California depend almost exclusively on welfare and one in three families receive some type of public relief.

The coalition's 20 recommendations aim to ensure that the neediest people are not cast off completely, and that those who are still eligible for health benefits know where and how to keep getting them:

Be sure new welfare procedures will allow continued health coverage to needy families who qualify for temporary assistance. Make sure such families are aware of their continued eligibility - that it is no longer tied to welfare eligibility - and keep procedures simple.

Conduct eligibility screening simultaneously for welfare and health benefits to make sure no possible health-benefit recipient falls through the cracks.

And while many critics of welfare reform predict dire consequences as recipients are moved off of welfare rolls, others see an opportunity. "In administration and application of health benefits, this period of welfare reform allows the possibility of being more effective in other ways," says John Miller, senior council for health and human services for the California State Senate. "Far from being a nasty chore, we welcome it."