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When President Clinton signed the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), he culminated a long series of events that began in 1992 as a campaign promise to "end welfare as we know it." This legislation, popularly known as the Welfare Reform Act, ends individual entitlement to benefits for those living at or below the poverty level.

Under the new law, three Federal programs—Aid to Families With Dependent Children (AFDC), Emergency Assistance, and Job Opportunities and Basic Skills (JOBS)—have been replaced with a block grant to States called Temporary Assistance to Needy Families (TANF). The Welfare Reform Act imposes a 60-month limit on receipt of benefits and has strict work requirements. The Act also includes provisions intended to reduce illegitimate births and births to teen parents, limit benefits to immigrants, and improve child protection and child support enforcement. Another piece of legislation affecting various welfare and public assistance programs is the Contract With America Advancement Act of 1996 (P.L. 104-121), which overrides a 1994 law intended to limit the payment of public benefits to substance abusers and to promote treatment. The Contract With America Act prohibits Federal disability benefits under the Supplemental Security Income (SSI) and the Social Security Disability Insurance (SSDI) programs and eliminates Medicaid and Medicare eligibility for the 200,000 Americans whose drug addiction or alcoholism is the primary cause of their disability. The 1994 law imposed strict requirements on these beneficiaries, including sanctions for noncompliance with treatment, benefits managed by a responsible third party (i.e., payee), and the loss of SSI benefits after 36 months. There was no limit for SSDI beneficiaries if appropriate treatment was not available.

Under the Contract With America Act, many of these individuals could regain eligibility because of other coexisting disabilities (e.g., mental illness, AIDS). However, if it is determined that these individuals have a drug addiction or alcoholism condition and are unable to manage their own benefits, then they will be required to have a representative payee and will be referred to the State drug addiction and alcoholism agency for treatment. There are no sanctions for noncompliance with treatment, nor is the Social Security Administration (SSA) required to monitor payees. The SSA is developing a policy to define a "drug addiction and/or alcoholism condition, along with the process by which individuals are referred for treatment."

Impact on Treatment-Related Services

The Welfare Reform Act and the Contract With America Act have sent shock waves through Federal programs that are an integral part of comprehensive substance abuse treatment services, including Food Stamps, child nutrition programs, child care, and social services. The impact of these program changes and of changes in Medicaid eligibility requirements may not be fully realized for several years. For example, residential treatment services have historically relied on Food Stamps and other welfare benefits to feed clients who are eligible for such benefits. It is not uncommon for clients in treatment programs to have been convicted of drug-related felonies. However, one of the provisions of the Welfare Reform Act bans public assistance (TANF and Food Stamps) to individuals who are convicted of drug-related felonies. How this will affect operations of residential treatment services remains to be seen. As States overhaul their own welfare programs and respond to Federal welfare reforms, they will have to clarify their values concerning welfare recipients with substance abuse problems.

Highlights of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996

Replaces the AFDC program with TANF, establishing a new State block grant program with increased discretion for the States Ends entitlement to public assistance for qualified income-eligible families Limits receipt of benefits to no more than 5 years Imposes strict work requirements and numerous potential sanctions Decouples automatic Medicaid from public assistance eligibility Restricts the availability of benefits, including Medicaid for legal immigrants Allows States to ban public assistance (TANF and Food Stamps) to individuals with drug-related felony convictions that occurred after August 22, 1996 Allows States to drug test welfare recipients and sanction those who test positive

States will have to make some difficult decisions on how to treat these individuals.

Current estimates of the number of welfare recipients who use or abuse alcohol and/or other drugs range from about 5 to 40 percent. Many with substance abuse problems who have relied on welfare in the past may no longer be eligible and may have no other means of support immediately available to them and their families. Welfare recipients who are currently in substance abuse treatment or who may require it in the future may not be eligible for the Medicaid dollars that would pay for treatment and ancillary medical services. Yet for many welfare recipients, substance abuse treatment is a necessary step toward job readiness. For others, treatment may be necessary to maintain employment or improve job performance.

Highlights of the Contract With America Advancement Act of 1996
For the 200,000 Americans who are disabled due to drug addiction or alcoholism: Prohibits SSI disability benefits Prohibits SSDI disability benefits Eliminates Medicaid eligibility Eliminates Medicare eligibility Requires substance abuse treatment referral only if drug addiction and/or alcoholism is secondary to another disability and the recipient is unable to manage own benefits

Positive Results of Treatment

Making it difficult for those on welfare to access substance abuse treatment services is clearly counterproductive. Recent studies indicate that there is a substantial rise in employment among welfare recipients who successfully complete substance abuse treatment. Florida reported a 76 percent increase in employment after treatment (Lanehart et al., 1996), and California reported a 60 percent increase (Gerstein et al., 1996). A Kansas State University study (Poresky, 1994) revealed the positive effects of substance abuse treatment on former welfare recipients' job performance: average monthly income at 6 months after treatment increased 33 times over the average employment income before entering treatment; and from pretreatment to the follow-up period after treatment, there was a 50 percent increase in the number of days worked in the previous month (Poresky,1994).

The results of an extensive cost-effectiveness study (1996) that was recently completed for the Ohio Department of Alcohol and Drug Addiction Services further emphasize that treatment plays an integral role not only in achieving work readiness but also in enhancing job performance: One year after entering treatment, the absenteeism of treated workers fell by 61 percent, incomplete work dropped by 37 percent, and the number of mistakes in work was reduced by 36 percent. The ability to "end welfare as we know it" will depend significantly on the availability, use, and success of appropriate treatment services for substance abuse problems among welfare recipients.

Flexibility Under TANF

Under welfare reform, States will have greater flexibility in establishing benefit eligibility and funding levels under their TANF block grant programs, which may have a deleterious impact on income-eligible individuals and their family members who require substance abuse treatment services, particularly if treatment capacities are reduced. However, although the amount of the TANF block grant is capped and is based on the State's historical funding levels, flexibility in the law allows the transfer of TANF funds into the Child Care Block Grant and the Social Services Block Grant (SSBG). Of the 29 Federally allowable services under the SSBG, many are important wraparound services. Some of these services include case management, counseling, child care, housing services, and transportation. Broader intergovernmental funding strategies may, in fact, allow States to benefit from welfare reform by providing comprehensive treatment services. To fully realize such benefits, however, will require collaboration and team building among the various State agencies involved in the provision of these services.

References

Gerstein, D.R., Johnson, R.A., Harwood, H.J., Fountain, D., Suter, N., Malloy, K. Evaluating Recovery Services: The California Drug and Alcohol Treatment Assessment (CALDATA). California Department of Alcohol and Drug Programs; 1994.

Lanehart, R.E., Clark, H.B., Rollings, J.P., Haradon, D.K., Scrivner, L. The impact of intensive case-managed intervention on substance using pregnant and postpartum women. Journal of Substance Abuse 1996;8:487-495.

Ohio Department of Alcohol and Drug Addiction Services. Cost-effectiveness Study of Alcohol and Other Drug Treatment Programs. Columbus; 1996.

Poresky, R.H. Kansas Alcohol and Drug Treatment 1994 Outcomes Study: 6 Month Follow-Up. 1994 Longitudinal Report Part II. Employment and Legal Sections of the Addiction Severity Index. Kansas State University, College of Human Ecology, Family Studies and Human Services, Computer Assisted Telephone Interviewing Laboratory; 1994.

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