Indiana’s generally well-regarded Republican governor who formerly served as President George Bush’s Director of Management and Budget, pulled the plug on October 16 on their effort to “modernize” the state’s system of delivering welfare services. This was a similar result in Indiana to an effort to privatize welfare in the state of Texas which was a failure, and was cancelled in 2007 after a huge expenditure of Texas state funds.
The Indiana governor acknowledged that he continued to favor privatization of some state government functions. However, the systems changes he implemented resulted in too many errors and left too many deserving people waiting for too long for help they desperately needed. State legislators were inundated with complaints from their constituents. Eligible applicants suffered nightmarish consequences that affected their health coverage and their health status. In fact, Indiana is facing increased criticism and oversight from the federal government over their error rate. State hearings on this debacle are under consideration by the Indiana legislature.
Indiana expected significant cost savings by directing applicants to apply for benefits by calling customer service centers staffed by contractor employees or by having the public file for benefits using a computer. Now that the governor has cancelled the $1.34 billion contract, applicants will return to applying for public services as part of face-to-face interviews with state workers in local county offices. The governor admitted in his public statements that it wasn’t the resources the state devoted to this endeavor or the amount of effort, but that it was “a flawed concept that simply did not work out in practice.”
So, why are these experiences in Texas and Indiana so relevant to California? As my mother would say: “It is a cautionary tale.” The California legislature passed, and the governor signed, AB 7 Centralized Enrollment for Public Social Services that purports to streamline and automate the process for applying for public social services like Medi-Cal, food stamps, and CalWORKS. The benefits of this law are reputed to be greater access to benefits by having the public apply over a computer, greater consistency in eligibility determinations from county to county, and significantly lower administrative costs for the state.
As the state prepares to implement this law in the coming months, it will face many of the same problems and criticisms experienced by these other states. California will doubtless incur tremendous costs (and will be unlikely to realize any savings) while exposing eligible Californians to significant delays and real adverse health consequences from what other states are calling “a failure.”
The question to ask is: Can we learn from their mistakes?