Shriver Center: July 2006

Perspective: 8 Million Spared, 40 Million Still at Risk

2006-08-09T13:10:18Z

A class action lawsuit filed on June 28 in federal district court in Chicago challenges a new law requiring 50 million Medicaid beneficiaries to prove their U.S. citizenship with passports, birth certificates, and other documentation. In what some are calling an attempt to preempt a ruling in a scheduled hearing a few days later, the Bush administration issued regulations to exempt some eight million citizens from the harm caused by the law. U.S. citizens who are still in harm’s way and need health coverage under the Medicaid program filed on July 21 new papers refocusing their lawsuit against a new federal requirement that they document their citizenship in order to be eligible for health coverage.

The citizenship documentation requirements of the Deficit Reduction Act

The new requirement was part of the Deficit Reduction Act of 2005, passed in February 2006. It makes no changes in the requirements for eligibility for Medicaid for the categories of noncitizens previously eligible. The changes affect only citizens, who had been able to establish eligibility by declaring their citizenship under penalty of perjury. If states had reason to believe they were not citizens, the states were free to demand further documentation. A study of this system last year indicated that there was no problem with it and no evidence that noncitizens were fraudulently obtaining Medicaid by claiming to be citizens.

Nevertheless, Congress passed the new documentation law. It is a side battle in the ongoing immigration policy debate and part of the effort to make immigration an election issue. But it will have negative consequences for millions of American citizens if it is not implemented carefully. Millions of low-income Americans need health care but are unable to produce the required documents (passport, birth certificate, identity papers). Such Americans include the mentally ill or infirm, homeless, disaster victims, foster children, and many others who do not or cannot walk around with formal papers.

Congress appears to have written the law in a way that gives federal Medicaid officials enough flexibility to avoid the harm. However, the Bush administration’s original plans for implementing the requirement would not have spared anyone from harm.

The Bush administration’s implementation plan and the lawsuit

After sitting on its implementation plans for four months, the Bush administration released on June 9 a letter to all state Medicaid directors outlining how they were to implement the law. This “guidance” applied the full documentation burden to every single Medicaid applicant and recipient—all 50 million. It established a limited list of allowable documents and arranged them in a hierarchy, insisting that everyone attempt to get the best, most formal documentation before any other, less formal documentation. And it imposed unrealistic time deadlines that many would be unable to meet, even if they might obtain the allowable documents.

A national group of endangered citizens filed on June 28 a lawsuit seeking to hold off the implementation—supposed to take effect, as planned by the administration, on July 1—of the new requirements. The nine plaintiffs included elderly African Americans born at home when their mothers were not allowed in hospitals due to racial discrimination. They never had birth certificates. Several of the named plaintiffs were unable to handle their own affairs due to age and disease and were represented by guardians or trustees. None of them had the papers the administration was demanding, and most of them had no prospect of being able to acquire those documents. Having spent their entire lives within the United States, all of them are citizens without any doubt.

The lawsuit claims that the implementation plan violates the Medicaid law by creating a new eligibility requirement (the documents) not specified in the law (which demands only that a citizen declare citizenship). The lawsuit also claims that the implementation plan violates the constitution by forcing people into an unfair process stacked against them. The plaintiffs seek to represent a nationwide class. The Sargent Shriver National Center on Poverty Law and cocounsel from Health and Disability Advocates, the National Health Law Project, the National Senior Citizens Law Center, and the Chicago firm of Goldberg, Kohn are their lawyers.

The new “interim” regulations and the status of the lawsuit

The case was scheduled for a hearing on an emergency injunction on July 7, but late the night before, on July 6, the federal Medicaid officials released a new regulation relieving many of the most vulnerable citizens from having to comply with the documentation requirement. The new regulation was published in the Federal Register on July 12 but is effective July 6. An “interim final” regulation, it means that it is effective and binding, but federal officials are taking public comments until August 11, and a final version will be released thereafter.

Under the regulation, the administration uses some of its flexibility under the law to exempt anyone who is a recipient of Medicare or Supplemental Security Income (SSI) from the documentation requirement. Some of the SSI recipients live in states, such as Illinois, that must accept the option to exempt them from the requirement. Assuming all states do this, the exemption will spare eight million of the most vulnerable elderly and disabled people from the requirement.

That leaves 40 million who are still affected by the new requirement. The interim regulation somewhat widens the types of documentation that may be used but continues to impose documentation as an eligibility requirement and implements a fundamentally unfair process that will result in many citizens losing eligibility for Medicaid. These citizens include, for example, mentally impaired or physically impaired people not yet found eligible for SSI, foster children, abandoned children cared for by relatives, homeless people and disaster victims, and many others who fall through various cracks with respect to their possession of formal documentation of their citizenship and identity.

In court on July 7 the plaintiffs asked for a short period to absorb the new regulation (which they saw that morning for the first time) and adjust the court papers. The court accordingly postponed consideration of the emergency injunction and scheduled a “status hearing” for July 28. On July 21 the plaintiffs filed their amended complaint and new arguments focused on the interim regulation. Plaintiffs expect the court to allow time for the government to submit papers, with the case ready for ruling by mid-August.

Meanwhile, people concerned about this new law and the regulation should make their position clear to their members of Congress. The quickest way to resolve this is to change the law or the regulation, and this will happen (outside of court) only if you make it an issue by raising your voice.

For more information on the status of case please contact John Bouman.

Poverty Action Report
July 2006

High School Bank Projects Generate Nationwide Interest

2006-08-09T16:05:47Z

Banks, schools, and youth groups around the country are planning to follow the lead of two Midwest banks in opening youth-run bank branches. The Sargent Shriver National Center on Poverty Law coordinated the establishment of the Curie Metro High School branch of Park Federal Savings Bank in Chicago and is now disseminating A Guide to Establishing Bank Branches in High School and producing a video to fuel the growing interest in student-run banks.

Modeled on the South Division High School’s Cardinal Branch of Mitchell Bank in Milwaukee, Wisconsin, the Curie bank-school partnership gives high school students (including Latino, African American, and immigrant teens living in lower-income households) the opportunity to gain real-world work experience, build financial skills, and strengthen their career ambitions.

The Federal Deposit Insurance Corporation (FDIC) New Alliance Task Force initiative (NATF), coordinated by Michael Frias, shared reports about the Midwestern youth-bank projects with NATF members in Chicago, New York, Los Angeles, Des Moines, and Kansas City and at a national conference last December. The innovation and success of these projects have inspired groups in Nebraska, South Carolina, New York, Iowa, and other localities in Illinois to launch similar bank branch projects within the next year.

In Missouri the FDIC and the Kansas City Cash Coalition will be working with Cristo Rey High School to develop job internships for high school students. In the Bronx in New York, plans are under way between North Fork Bank and Fordham Leadership Academy for Business and Technology. In Omaha, Nebraska, Appleseed is encouraging local banks to hire Cristo Rey students as part of their work-study program.

In the Quad Cities area bordering Iowa and Illinois, the Boys & Girls Club (BGC) of Mississippi Valley and local business leaders are planning an on-site, full-service bank branch staffed by BGC youth, expanding the concept beyond the walls of a school. Other interested groups include the South Carolina Appleseed Legal Justice Center and Belvidere Bank in Illinois.

If you would like to learn more about the high school bank projects in Milwaukee and Chicago, download A Guide to Establishing Bank Branches in High Schools. If you have information about teen bank projects in your area or other states, contact Ian Gardiner or Dory Rand of the Shriver Center. For more information on NATF, contact Michael Frias at 312.382.7506.

Poverty Action Report
July 2006

Momentum Grows for a Right to a Lawyer in Civil Cases

2006-08-08T14:42:18Z

The burgeoning movement to guarantee representation in civil cases for low-income people who face loss of basic rights is the subject of the July–August 2006 special issue of Clearinghouse Review: Journal of Poverty Law and Policy. The issue will be off the press at the end of this month.

Planned and written in collaboration with the National Coalition for a Civil Right to Counsel, and with an introduction by American Bar Association President Michael S. Greco, the special issue asks and answers:

How are advocates in Maryland, Ohio, Washington, and Wisconsin promoting a right to counsel for low-income people in civil cases? What state law theories are they using? How are advocates in Canada working to guarantee counsel for low-income Canadians?
What arguments for a civil right to counsel are available under the U.S. constitution? How much of a barrier is the U.S. Supreme Court’s 1980 decision in Lassiter v. Department of Social Services?
What state laws already confer a right to counsel in civil cases?
What questions did experts wrestle with in drafting a model statute establishing a civil right to counsel, and how did they resolve these questions?
What right to counsel is under international law?

More than four decades after Gideon v. Wainwright established the right to counsel in criminal cases, what lessons can we draw from the implementation of that right?

These are just some of the questions that the Clearinghouse Review special issue tackles. To purchase a copy ($30 for nonprofit organizations; $60 for others), e-mail Nancy Carey or call 312.263.3830 ext. 223.

Poverty Action Report
July 2006

Great START Waiting List Imposed

2006-08-09T16:20:25Z

For lack of funding, the Child Care Bureau of the Illinois Department of Human Services (IDHS) has imposed a waiting list for new applicants seeking professional development wage supplements under the Great START (Strategy to Attract and Retain Teachers) program. The shutdown in approving new applications comes just as more child care providers are trying to increase their staff’s professional credentials so that they can participate in the new Preschool for All initiative.

Created in 2000 in response to research showing that child care center staff and home-based providers are poorly paid and have a high turnover rate, Great START encourages increased professional preparation and retention of child care personnel. It provides state-funded wage supplements to low-paid child care staff who attain educational credentials exceeding state licensing requirements. This is the first time IDHS has imposed a waiting list on the program.

The Great START program provides wage supplements to child care professionals who are employed in a full-day or full-year program, earn no more than $15 an hour (equivalent to $30,000 annually if employed full-time), have worked for the same employer for at least one year, are employed in a child care center or home licensed by the Department of Children and Family Services, and attain specified educational credentials.

Over 5,000 people currently receive a Great START wage supplement, which is paid twice a year and ranges from $150 to $1,950. The ten different levels on the wage supplement scale correspond to educational attainment.

The Great START program has worked in tandem with another program, the TEACH (Teacher Education and Compensation Helps) Early Childhood Project, which defrays educational costs for child care professionals.

Persons who apply for Great START funding after the first of this month will be on a waiting list to receive wage supplements as funding becomes available. The new policy does not affect current recipients as long as they continue to meet program requirements.

Earlier this year, Gov. Rod Blagojevich announced, with much fanfare, the Preschool for All initiative, with the goal of making preschool available to all 3- and 4-year-olds in Illinois. Due to space constraints in public schools, experts agree that the governor’s goal is reachable only by increasing the availability of early education programs in community child care settings. Shutting down Great START intake flies in the face of that goal.

A relatively small commitment of $1 million in additional funding would have kept Great START intake open . Great START overspent its $7 million budget by $0.7–0.8 million in the fiscal year that just ended.

For more information about waiting list policies, click on Great START at www.ilchildcare.org, or call a Great START counselor at 866.697.8278. For comments and questions about this article, contact Dan Lesser, Sargent Shriver National Center on Poverty Law.

Poverty Action Report
July 2006

New TANF Rules: Less Flexibility, More Red Tape

2006-08-09T16:06:16Z

After years of advocacy, debate, and continuing resolutions, Congress reauthorized and funded the Temporary Assistance for Needy Families (TANF) program through September 30, 2010, as part of the Deficit Reduction Act of 2005 (DRA)./1/ The DRA’s changes in the TANF program decrease the program’s flexibility and increase the burden on individuals and states, making it more difficult for individuals and states to meet the work participation requirements and discouraging states from allowing recipients to participate in activities that do not count toward the work participation rates.

The changes include increased U.S. Department of Health and Human Services (HHS) oversight of work participation. The DRA required HHS to draw up regulations specifying when a work activity (e.g., unsubsidized employment, vocational education training, and job search and job readiness assistance) counts as one of the federally listed activities (the list of activities remains unchanged) and to establish uniform reporting requirements and verification requirements for participation.

HHS published the new regulations on June 29./2/ The rules as written go into effect October 1, 2006. HHS is seeking written comments on the rules, so there is an opportunity to amend the rules. Written comments are due on or before August 28. These regulations can have a negative impact on the economic well-being of eligible individuals and families, all of whom are already poor, in Illinois and throughout the country.

Defining work activities

Under current law each state must meet a 50 percent work participation rate for all families (single- and two-parent families) and a separately calculated 90 percent work participation rate for two-parent families. Failure to meet these rates could result in financial penalties. This has not changed in the new law (although the DRA’s changes in the caseload reduction credit make it more difficult for states to avoid financial penalties). To meet these rates, recipients must participate in “countable” work activities a minimum number of hours each week. Generally recipients must participate for 30 hours for single-parent families and 35 hours for two-parent families./3/ Current law (statute and regulations) lists 12 activities in which recipients must participate so that states can meet the required work participation rates. This list of activities has not changed. Nine of these activities, known as “core” activities, may count toward all hours of participation, while three other activities may count only for some of the required hours of participation (hours after the first 20 for single parents and after 30 for most parents in a two-parent family). What has changed is that the new regulations define work activities; current law gives states the flexibility to define the activities. While some of the changes are good, most of the definitions limit the set of work activities that states can get credit for in counting their participation rate activities.

For example, job search and job readiness assistance is a core activity. However, the activity is limited by statute to six weeks per fiscal year of which no more than four weeks may be consecutive. Under the new regulations, a broad set of activities can fit under this heading in addition to traditional job search and readiness activities (e.g., résumé writing, job interviews), including activities designed to address barriers to employment such as substance abuse treatment, mental health counseling, or physical therapy. While states may allow recipients to participate in one or more of these activities for as much time as needed, the limitation on the length of time these activities can count toward the participation rate makes it of very limited use. HHS rejected counting specialized programs that serve people with disabilities to count toward the participation rate.

While this time limit on job search and readiness assistance applied in the past, it was not as problematic because many states counted job search and readiness activities under other work activities. Typically states included a job search component as part of its work experience program. The new regulations, however, explicitly exclude job search and readiness activities from the definition of work experience and other activities. This means that activities will have to be tracked separately.

The regulations impose limitations on education and training, such as precluding postsecondary education that leads to baccalaureate or advanced degrees and stand-alone English as a Second Language programs. These limitations get in the way of career-path employment. Also, states may count only supervised study time toward the participation requirements. Participants must make “good and satisfactory progress” for hours in education-related activities to count, and commonly courses, particularly at the postsecondary level, require two or more hours of preparation time for each hour of class time. Implementing monitored study time can prove costly, whether setting up a system online or in a more traditional setting. This requirement will put pressure on the child care system since families will need child care assistance in order to attend structured study sessions and the time spent commuting. Moreover, structured study time may interfere with other TANF work activities and goals, including employment.

Other than unsubsidized and subsidized employment, the work activities “must be supervised on an ongoing basis no less frequently than daily”. What this means is unclear, but it is a new requirement that will certain add to the already heavy burden on recipients and states alike in their efforts to comply with work activities.

Counting, tracking, and verifying participation in work activities

The regulations describe how states must collect information about the hours a recipient participates in activities—the documentation to verify the hours participated, states’ “Work Verification Plans” for documenting and verifying hours of participation, and the penalties that states can incur if they fail to develop and follow such plans. Some examples of the regulations:

Only actual hours, not scheduled hours, of participation may be reported to meet the work participation rate.
States may not assume that a recipient participated in the scheduled activities; states instead must affirmatively determine that a recipient participated in an activity in order to report it.
States must support each individual’s hours of participation through documentation in the case file. For employed recipients, this may include pay stubs, employer reports, and time and attendance records. States may allow the documentation of current hours to act as documentation of hours worked over a six-month period, reducing the need for employers or employed recipients to report repeatedly. For individuals in other activities, documentation may include time sheets, attendance records from the work activity program, or school attendance records. Participation in job search and job readiness assistance activities must be documented daily, while hours of participation in other activities must be documented every two weeks.
States must submit a Work Verification Plan to HHS by September 30, 2006. For each countable work activity, the state must include in the plan a description of how its program comports with the new federal definitions of each work activity, describe how the state will accurately input data, how the state will track and report hourly participation, and how the state will ensure that only hours in activities that meet the relevant federal definition for a countable activity will be reported. And the plan must describe how the state will monitor its system for reporting and verifying hours of participation to ensure its accuracy. HHS will review the plan. States must be operating under an approved plan starting October 1, 2007.
HHS authority includes significant flexibility to conduct reviews of state procedures and request information from states, and to impose a work verification penalty for failure to submit a Work Verification Plan or failure to maintain adequate procedures to ensure a consistent measurement of work participation rates.

While states, including Illinois, may already define some work activities or track and document some participation as required under the new regulations, the reality is that the implementation of these regulations places a heavy burden on individuals, entities that operate welfare-to-work programs, and states by decreasing the flexibility of the TANF program and increasing the administrative burden on everyone. These rules will hinder state efforts to serve families in the most effective and appropriate manner and increase the incentive for states to restrict access to assistance for poor families with the greatest needs.

Illinois already suffers from an overall poverty rate of 12.4 percent (1,562,900 people), with 5.7 percent of Illinoisans living in deep poverty (living at or below 50 percent of the federal poverty threshold) and 17.7 percent of Illinois children living in poverty./4/ The poverty rates have increased at the same time that the TANF caseloads have dramatically decreased (an 82.4 percent decrease between 1994 and 2004)./5/ The existing administrative barriers to public benefits, especially for those recipients required to participate in TANF work activities, certainly have contributed to the decline in the TANF caseload and the increase in poverty in Illinois./6/ These new regulations have the potential for exasperating an already bad situation.

The Sargent Shriver National Center on Poverty Law will be submitting written comments to HHS and will post them on www.povertylaw.org. We encourage others to submit comments also.

For more information, contact Wendy Pollack.

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1. S. 1932; Pub. L. No. 109-171; relevant sections at secs. 7101 et seq. For a discussion of the main changes in TANF and the DRA, see Let's Talk TANF: Congress on the Verge of Reauthorizing TANF, Poverty Action Report, Jan. 2006.

2. 71 Fed. Reg. 37453 (2006) (to be codified at 45 C.F.R. pts. 261-63, 265 (Interim final rule with request for comments, June 29, 2006).

3. There are exceptions to the minimum hours of participation, such as for single-parents with a child under one- and two-parent families where one of the parents is disabled.

4. 2006 Report on Illinois Poverty, Illinois Poverty Summit 9, 11, available at www.heartlandalliance.org/maip/.

5. National Conference of State Legislators, Welfare Caseload Watch (March 9, 2005), available at www.ncsl.org.

6. For a detailed report and discussion of the administrative barriers, see Evelyn Z. Brodkin, Carolyn Fuqua & Elaine Waxman, Accessing the Safety Net: Administrative Barriers to Public Benefits in Metropolitan Chicago (Public Benefits Hotline Steering Committee & Legal Assistance Foundation of Metropolitan Chicago 2005), available

Poverty Action Report
July 2006

New Illinois Law to Strengthen Financial Education

2006-08-09T16:20:47Z

A new Illinois law aims to boost financial literacy through a new financial education curriculum and funding. The Financial Literacy Act (Senate Bill 2191) amends the Illinois School Code to develop and adopt curricula, materials, and guidelines for financial education instruction. The Act enhances the current high school consumer education standard by requiring instruction on specific financial literacy topics. The Act also establishes a Financial Literacy Fund made up of state funds and private contributions for activities and materials, including books, games, field trips, and computers, related to financial literacy education.

“People across all income levels need and benefit from financial education. The current consumer education class, which is required for graduation in Illinois public high schools, now includes curriculum for budgeting, savings and investing, managing credit, and opening a deposit account,” says Dory Rand, supervising attorney of the Sargent Shriver National Center on Poverty Law’s Community Investment Unit. “Equipping students with this essential knowledge before graduation prepares them to succeed financially as adults and avoid excessive debt,” she added.

The curriculum covers budgeting, understanding credit, and managing debt—timely topics as credit card companies increasingly target college freshmen with high-interest credit cards. Last May the San Diego Union-Tribune reported that 18-to-24-year-olds represented a fast-growing age group to declare bankruptcy.

The Shriver Center and members of the Illinois Asset Building Group supported the Financial Literacy Act, which, by protecting and building assets, can strengthen Illinois families and communities.

For more information, visit the Shriver Center's website, or contact Dory Rand at 312 368 2007 or Jami Schlafer at 312 368 8575.

Poverty Action Report
July 2006