NCPA - National Center for Policy Analysis


February 7, 2008

Like many other states, Indiana's social services have been bureaucratic and fragmented.  As a result, they are not convenient for the state's welfare recipients and are costly to operate, says Heidi Sommer, an intern with the National Center for Policy Analysis.

Under the state's traditional system:

  • Clients must apply for each social service in person at a state office during business hours, and each visit requires an average wait of two to three hours.
  • In almost three out of four cases (72 percent), eligibility is not determined during the initial interview -- requiring additional verification and often additional office visits.
  • Almost every action in the eligibility process requires a different form and/or notice, and each of the state's 94 counties has had its own set of procedures.

Indiana's existing system for administering welfare, Medicaid and food stamps has a high rate of errors in approving applicants who do not qualify, and/or providing too little or too much assistance to those who do qualify, says Sommer:

  • Thirty-five percent of eligibility determinations for Medicaid long-term care in 2003 contained errors, costing Indiana taxpayers an estimated $10 million to $50 million per year -- and the federal government up to $100 million annually.
  • Twenty-six percent of TANF benefit determinations contained errors.
  • Twelve percent of food stamp benefit determinations were in error -- and Indiana ranks 48th among the states in recouping food stamp overpayments.

Extending benefits to ineligible people costs Indiana taxpayers $100 million a year, not counting fraud. Furthermore, since cash assistance and food stamps are primarily funded by the federal government, taxpayers nationwide bear additional costs for Indiana's errors, says Sommer.

Source: Heidi Sommer," Welfare Reform in Indiana," National Center for Policy Analysis, Brief Analysis No. 608, February 6, 2008.

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