Health care and insurance loss of working AFDC recipients

The federal Omnibus Budget Reconciliation Act of 1981 (OBRA) produced substantial changes in the Aid to Families With Dependent Children (AFDC) program. The main effect of the changes has been the denial of assistance and hence Medicaid coverage to many AFDC recipients with jobs. Our analysis of the health care and insurance loss of working AFDC recipients in Hennepin County, Minnesota, found that the vast majority (87%) of families that were terminated from AFDC due to OBRA were able to remain off welfare and the majority (70% adults, 60% children) had private health insurance coverage 2 years later. These results highlight the dilemma facing state policymakers who want to develop successful programs to meet the health needs of the working poor, yet at the same time must cope with tight, short-term fiscal constraints.