Welfare's chronic case of frustration Public Aid Like King Kong, public aid in Illinois finds itself under attack from many sides. Entangled In a web of rules and regulations of federal programs, the state has little choice but to participate in them in order to receive federal money

WELFARE is the second most expensive program area in state spending. This makes it one of the most controversial and least popular. A Harris Survey taken «last November revealed that, nationwide, 50 per cent of adults favored cuts in federal welfare spending, Ironically, it is also the program that does more to directly help people than any other. In fact, that is the dilemma: to cut the high cost of public aid risks undercutting the well-being of people, hundreds of thousands of people.

New Gov. Jim Thompson addressed the knotty problem of welfare in his campaign position paper on public aid. While calling the history of Illinois welfare "a sad tale of false hopes, broken dreams, escalating costs and serious waste and fraud," he also spoke out against the "political rhetoric about 'welfare cheaters' and 'free handouts.'" Thompson said, "The system not only places a severe strain on public resources, but it also threatens to lock the poor into an unbreakable poverty cycle that extends for generations." If this is his belief, then what can we expect him to do to reform the system in his short two years? And what will the legislature do?

Thompson's campaign position paper listed five reform ideas. Like most reform ideas they are all rather incremental approaches, that is, they propose small money saving ideas, but no basic changes to the system. Briefly his suggestions include: (1) tightening up procedures for getting federal funds— a persistent problem in light of the maze of federal regulations; (2) cutting down on the number of middle managers in the Illinois Department of Public Aid (IDPA), and giving more field staff less paperwork; (3) implementing a six-point program to eliminate recipient fraud; (4) improving vocational training and job placement; (5) giving greater consideration to recipients' rights.

These suggestions might help; they seem realistic, but will they have any real impact on the enormously large and intricate body of welfare policies and regulations?

To answer this perhaps unanswerable question an uncluttered and basic definition of public aid is needed. What is public aid? Generally, it is a system whereby government provides temporary help (money or services) to poor and needy citizens so that they can become self-reliant taxpayers. It is, finally, a contradictory idea. Public welfare is, at heart, a socialist concept and has always been suspect in a society that claims to be devoted to the ideas of free enterprise and self-improvement.

In Illinois most public aid comes under one of these programs. They are: (1) Aid to Families with Dependent Children (AFDC); (2) Food Stamps; (3) State Supplemental Payment (SSP); (4) Medical Assistance (MA); (5) General Assistance (GA); (6) Aid to the Medically Indigent (AMI); and (7) Social Services, which includes 27 individual programs.

State funds entirely support the State Supplemental Payment program. General Assistance is administered by either townships or commission counties, except Chicago where IDPA administers the program. In areas where state financial participation is required, the state provides 94 per cent of the funding with the other 6 per cent provided by the local governments. The locally administered programs where the appropriate tax levy is not made receive no state funds.

The Food Stamp program is funded entirely by the U.S. Department of Agriculture, but the administrative costs are shared equally between the federal and state government. Both the Medical Assistance and Aid to Families

May 1977 / Illinois Issues / 3

Why does public aid cost so much? The answer lies in the problem of unemployment, the broad range of social and medical services offered by the state, overlapping responsibilities of agencies and dependence on federal funds

with Dependent Children are funded equally by federal and state money. The group of 27 programs under Social Services is funded with 75 per cent federal and 25 per cent state funds.

Under the Social Security Act, federal funds are disbursed to states having an acceptable state plan for strengthening and improving their programs of Aid to Families with Dependent Children, Medical Assistance, and the provision of social services. The U.S. Department of Health, Education and Welfare (HEW) administers the Social Security Act and grants federal funds to these programs when it determines that state programs are efficiently managed. HEW also establishes regulations for the administration of these programs and withholds funds if states fail to conform with federal regulations. Federal payments are made primarily in the form of matching funds and are paid into the state's General Revenue Fund. The Department of Public Aid's budget, paid from the fund, is appropriated each year by the General Assembly.

Many say the programs are so big now they are out of control. Like King Kong they cannot be improved in nature and should instead be killed. But, so long as the federal programs are in force with their regulations and federal funds, the state has little choice but to participate in them in order to receive federal money.

Reorganization and reform
Another ongoing problem the state must face is this: If we are to have a welfare system, how should it be structured? One solution proposed by the Ogilvie administration in 1966, but never enacted, was to consolidate all state health and welfare agencies under a single department. Under the plan, the departments of Children and Family Services, Public Aid, Public Health, Mental Health, as well as the Board of Vocational Education and Rehabilitation, the Youth Commission, and the Division of Services for Crippled Children, would all become part of a "little HEW." It was argued that such restructuring would reduce overlapping responsibilities and end conflicting actions between agencies. The Thompson administration is also discussing various reforms of the welfare structure, but no specific reorganization has been recommended at this time.

At present the IDPA is involved in multi-agency responsibilities. Sometimes one agency is making placements at a home at the same time that another agency is trying to remove the same patients. IDPA has the extra condition (they deny it is a problem) of not having the power to remove patients from a home. The Chicago Tribune referred to this as a serious deficiency for a department that makes payments for 17,000 former patients of mental hospitals, and 19,663 foster children (most of whom, by the way, are primarily the responsibility of either the Department of Children and Family Services, or the Department of Corrections).

Some of this confusion was eliminated by meetings of the so-called health cabinet, set up by then Gov. Walker and composed of the directors of all the health and welfare agencies of the state. Because of these meetings, the people at the top — at least — were occasionally working together on mutual problems, and solving some. Gov. Thompson is continuing with this concept.

Aside from structural changes, another welfare improvement that has been often discussed is to make more people on welfare work for their money. This is a popular solution with many, but not a comprehensive one, since most people on welfare are children and old and disabled people. Only 12.4 percent of people on welfare in Illinois are classified as employable. In the general assistance program the rate is much higher: 70 per cent are classified as employable. To that extent, then, the public aid load is a result of unemployment. Aside from the unemployment problem, welfare must support mothers not working but with children to support, the blind, disabled, and old people. Most of these are dependent upon it for their very lives. How do you cut off or reduce funds to these people after once making a commitment to them?

Heavy welfare spending is likely to be with us for some time to come. "Over 10 per cent of the population of Illinois, approximately 1,230,000 persons, are receiving some kind of public assistance," according to Walker's accountability budget for fiscal year 1977. The state's bill for public aid for fiscal 1977 will be close to $2 billion (see table 1). An appropriation of $1,986,296,763 passed both houses of the General Assembly, and was approved with a S3.4 million cut by the governor on July 12 last year, but the legislature overrode the veto and restored the cut. Prior to the veto the House had lopped off over $11 million requested by IDPA for new administrative staff and added contractual services. Specifically, funding for 1,091 new staff was eliminated.

The federal share of welfare costs
Approximately 50 per cent of the state's aid costs are paid by the federal government. In addition, many communities of the state don't receive state money for local public aid expense, and their costs are thus excluded from the total public aid bill for Illinois. Why does public assistance cost so much? What does the money buy? The answer lies in the broad range of social and medical services, as well as outright public welfare grants, offered by IDPA,

The Aid to Families with Dependent Children program aims at "strengthening family life" by providing grants, comprehensive medical care and social services to families in need. Those eligible are families with children who have been deprived of parental support or care by death, disability or continued absence from the home (AFDC), or by unemployment (AFDC-U). To apply, a family must have one or more children living at home who are under age 18, or

4 / May 1977 / Illinois Issues

under 21, if regularly attending an accredited school or college. In setting the amount of assistance due a family, IDPA considers the economic section of Illinois the family resides in (counties are officially classed into three sections for this purpose) and the number of children in the family.

For the first time in 10 years, there was a net drop in the caseload in 1976 for the Illinois Aid to Families with Dependent Children. As of last November there were approximately 772,039 people collecting AFDC payments in the state, over 30,000 fewer than in February of 1975. It may be that this caseload decrease was largely due to the reassignment of the more experienced staff in IDPA to "intake" positions (making critical initial eligibility decisions).

Social Services programs have been offered since October 1975 under a plan, which ends June 30. Hearings are being held to determine how to continue the programs after June 30. Some of these social services include: day care for children, housekeeping or homemaking needed because of illness or incapacity, developmental and social adjustment help, family planning advice, housing improvement services, protective services for children, necessary transportation, literacy training, vocational and adult education, and other needed support help.

Most of these services are provided by a state agency, and payments are not made to an individual but to the agency providing the service. Persons receiving AFDC, SSP or the federal Supplemental Security Income and others who are "income eligible" qualify for these programs administered by the Illinois Department of Public Aid.

As of June 1976, 565,240 of the 788,244 persons getting AFDC were children. About 88 per cent of all those children were in the care of their mother and 30.2 per cent were under five years of age. The median age, in fact, for children receiving AFDC is 8.5 years.

Far more encouraging and surprising than this is the fact that the median time that an AFDC family receives welfare is less than three years. This fact undercuts the widespread belief — repeated by Thompson in his position paper last September — that many families remain on welfare for generations. When this is considered along with the high number of children involved, it also points up the necessity for this kind of welfare, even to those most opposed to "big government giveaways."

Medical Assistance most costly
Medical Assistance (commonly referred to as Medicaid), a federal-state program subsidizing health care for the poor, has been accepted since its inception by nearly one of every five Americans. Illinois' Medicaid program is "one of the most comprehensive in the nation," according to the state's fiscal 1977 budget book. It is also the single most expensive welfare program in Illinois and certainly the most fraud-ridden and abused.

IDPA's Medical Assistance program offers comprehensive medical services to AFDC recipients and persons on the federal Supplemental Security Income (SSI) program who qualify. This assistance also goes to other low income families with minor children and aged, blind, or disabled individuals who do not receive cash assistance, if their medical bills exceed their ability to meet payment and their assets meet state standards. This category of the program is called Medical-Assistance-No Grant (MA-NG). In 1975 over 800,000 people a month received Medical Assistance. Of these, about 31 per cent received only medical care, while the other 69 percent were already receiving some form of aid from other welfare programs.

Table 1. Illinois Department of Public Aid Budget, Fiscal Year 1977
	Original fiscal 1977 request	Passed by House	Passed by Senate	Approved by Governor
Total Distributive	$1,827,169,000	$1,830.569,000¹	$1,830,569,000	$ 1,827,169,000 4
Total Medical	912,000,000	912,000,000	912,000,000	912,000,000
Total Administrative	166,943,400	155,195,760 2	155,727,760 3	155,727,760

1 $3.4 million added by House floor amendment for Illinois Office of Education (IOE) Adult Education.
2 Reductions totaling $11,747,640 requested for new staff and contractual services.
3 $532.000 restored for EDP contractual services.
4 The governor reduced the appropriation for IOE Adult Education from $5.4 million to $2.0 million for a total reduction of $3.4 million, but the legislature overrode the governor's cuts in Adult Education.
Source: Illinois Department of Public Aid.

In fiscal year 1976 IDPA spent about $868 million for MA, and will spend an estimated $912 million in fiscal 1977. During calendar year 1975 the program supported a monthly average of 42,667 patients in nursing homes and provided 2.7 million days of hospital services, 13 million services of physicians, dentists, etc. In addition, it footed the bill for 14.7 million drug prescriptions, helped pay for in-patient hospital mental care for 855 people (at $11.5 million), and facilitated medical care for an average of 19,663 foster care children per month (costing $6.1 million).

A number of drawbacks go along with these services, not the least of which is the apparent high incidence of fraud in the program. In April of 1975 the U.S. Comptroller General's Office issued a 45-page report on the Illinois Medicaid program. The report criticized IDPA for failing to combat widespread fraud, especially by medical care providers. In March of 1974 the Chicago Tribune disclosed that 70 Illinois doctors collected together over $10 million in a single year for treating welfare patients in an assembly line fashion. And in 1975 U.S. Senate investigators estimated that up to $60 million a year was being paid illegally from Illinois Medicaid funds. Despite this, IDPA had referred only 22 fraud cases to the state's attorney office for prosecution.

But IDPA has recently made a strong effort to reduce abuse by Medicaid recipients and providers. On September 29, 1976, 16 medical providers were indicted by a federal grand jury as a result of a 14-month investigation. As of December 1976, IDPA had suspended 125 health care providers from participation in Medicaid, and 38 have been terminated from the program. Medical audits and review boards are being used against fraud. In addition, a new, automated Medicaid Management Information System (MMIS) is being planned to help process claims faster for all medical aid providers to clients. It may take a year or two before this new system is operative.

Despite all this, fraud will continue to some extent and will remain a basic issue in the controversy over the advisability of welfare spending in pursuit of social justice. The basic question for political and social planners during the

May / 1977 / Illinois Issues / 5

The department has weeded out ineligibles and cracked down on overpayments, but the state is still not up to federal standards

next decade will be this: To what extent are we willing to tolerate waste in an effort to provide each citizen with adequate health care? Should government even be involved in health care?

SSP least expensive
Largely exempt from this sort of basic philosophical debate will probably be the State Supplemental Payment (SSP) program. It is a relatively small, non-controversial area of welfare spending, which grants living expenses to those who are poor and aged, blind or physically handicapped. It is inexpensive because, as of January 1974, the federal government assumed most of the cost for grants to this group under the Supplemental Security Income (SSI), which is entirely administered by the federal Social Security Administration program, SSI provides maximum cash grants of $167.80 per month to a recipient living alone. The state supplements this if an SSI recipients cash assets are below $400 for an individual or $600 for a couple.

SSI recipients may also qualify for medical assistance, food stamps, and social services. Social services include shopping, reading or guide service for recreation, repair of Braille writers, radios, and typewriters, guide dog allowances, transportation, and many other kinds of help.

SSP is a small program. It affects a total of about 45,000 people, but costs the state "only" about $35 million a year — an average of about $750 per person. Of those now on the program about 35,000 are disabled, 9,500 are aged, and 750 are blind. Three years ago, before the start of the federal SSI, there were about ^6,000-disabled, 31,000 aged and 1,700 blind on state SSP, and the yearly cost was three times higher than now.

General Assistance
General Assistance (GA) is one Illinois welfare program that receives no federal funds but is instead paid for with state and local funds. In Chicago, the city pays only about 8 per cent of the GA cost, and the state picks up the rest. GA, in fact, is pretty much a Chicago program paid for by the whole state. Many other areas absorb the full cost. In fact, only 42 local governments request GA payments, out of 1,455 governments statewide.

GA is available to those who aren't eligible for federal welfare, but who, nonetheless, need income maintenance to purchase the necessities of life. As such, it is one of the most controversial areas of public spending in Illinois, Ninety-one per cent of GA payments are made in Cook County, a fact strongly resented by much of the rest of the state, resentment often voiced by downstate legislators at appropriation bill hearings in the General Assembly. Many downstate local officials would like to see GA made a mandatory program, fully funded by the state — but when there is talk of state and local cost sharing, they are horrified.

Food Stamp program
In response to downstate agitation, IDPA reviewed all GA cases in Chicago during the last fiscal year and promised to pursue a policy of redetermining every case three times a year. But with an annual budget of $120 million, even that can hardly be expected to quiet critics armed with the knowledge that over 70 per cent of those on GA are considered employable. (Of 61,270 recipients, 45,960 were classed as employable in May of last year.)

All GA recipients are required to register for work and to take most jobs offered them, or risk losing all benefits. Unfortunately, a large number of "employables" are really unqualified for most kinds of skilled labor.

Table 2. Growth of Illinois public aid programs
Number of public aid recipients in Illinois and amount of assistance by program for the month of September of each year, 1965 through 1976 (Medical amounts for persons who receive a grant for Aid to Aged, Blind or Disabled or for Aid to Dependent Children are not shown in the table. Medical amounts are included for persons receiving General Assistance.)

	Aid to Aged (OAA)		Aid to Blind (BA)		Aid to Disabled (DA)		Dependent Children (ADC)		General Assistance (GA)		Medical Only **
SEPT.	Persons	Dollar Amount	Persons	Dollar Amount	Persons	Dollar Amount	Persons	Dollar Amount	Persons	Dollar Amount	Persons	Dollar Amount
1976†	9,516	$567,595	782	$51,678	34,913	$2,369,684	776,782	$60,766,095	66,295	$14,821,855	180,137	$25.231,997
1975†	11,138	757,168	846	54,696	37,560	2,645,519	800,875	62,856,398	66,993	13,442,280	169,206	19, 129,236
1974†	5,145	207,512	633	27,275	10,399	423,046	755,747	53,707,431	56,384	10,373,369	191,001*	16,983,344
1973	31,304	2,120,395	1,693	186,764	86,835	9,342,505	770,764	48,736,267	52,713	7,589,552	120,182	15,922,026
1972	34,312	2,275,658	1,731	178,261	83,467	8,726,584	736,769	44,615,355	44,390	6,473,249	113,050	9,769,422
1971	34,310	2,084,500	1,698	162,902	63,547	6,090,100	642,551	37,894,300	63,452	8,951,600	97,569	13,147,429
1970	34,757	2,087,916	1,654	150,470	43,211	3,816,603	437,951	24,623,410	74,261	7,697,232	86,454	9,272,743
1969	37,692	2,714,865	1,707	157,745	37,857	3,556,979	344,341	17,076,397	51,125	4,143,423	77,226	7,455,025
1968	37,539	2,272,858	1,765	141,213	34,141	2,836,699	303,163	13,705,661	49,998	4,114,501	68,193	5,954,794
1967	38,826	2,361,323	1,867	143,608	30,926	2,422,567	263,764	11,279,634	47,498	3,063,971	62,022	2,822,768
1966	42,593	2,412,643	2,048	142,733	29,568	2,207,432	247,822	10,009,129	37,989	2.479,227	31,123	2,299,944
1965	54,247	2,447.039	2,373	147,572	30.572	2,045,582	257,347	9,699,622	42,607	2,718,434	3,690	1,969,367

†SSI Program in 1974, 1975, and 1976: Aid to the Aged, Blind, or Disabled figures for 1974 do not include persons receiving a state supplement through the federal Supplemental Security income (SSI).
*Contains approximately 24,000 persons receiving State Supplement through SSI: 1975 "medical only" persons does not contain these persons.
** Does not include medical amounts for persons who receive a OAA, BA, DA or ADC grant. GA does include medical. Source: Illinois Department of Public Aid.

6 / May 1977 / Illinois Issues