Patchwork Policies: State Assistance for Immigrants under Welfare Reform

Assessing the New Federalism is a multiyear Urban Institute project designed to analyze the devolution of responsibility for social programs from the federal government to the states, focusing primarily on health care, income security, employment and training programs, and social services. Researchers monitor program changes and fiscal developments. In collaboration with Child trends, the project studies changes in family well-being. The project aims to provide timely, nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively.

Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District of Columbia, available at the Urban Institute's web site. This paper is one in a series of occasional papers analyzing information from these and other sources.

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

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For immigrants, the passage of federal welfare reform meant much more than ending the entitlement to cash assistance. The law restricted noncitizen eligibility for a wide range of public programs, including Temporary Assistance for Needy Families (TANF), food stamps, Supplemental Security Income (SSI), and Medicaid, and it gave states broad new authority to set social welfare policy for immigrants.

Since the law's enactment, the President and Congress have restored many, but not all, of the benefits from which immigrants were originally barred. Many children, elderly, and disabled immigrants have had their eligibility for food stamps and SSI restored. But most working-age adults remain ineligible for food stamps and most immigrants entering the United States after the law's passage are ineligible for the major federal assistance programs for at least five years.

Although the Congress has gone a long way toward undoing the Personal Responsibility and Work Opportunity Reconciliation Act's (PRWORA) immigrant restrictions, it has left another of the law's legacies intact: the devolution of authority from the federal government to the states to determine immigrants' eligibility for public benefits. Before PRWORA's passage, the federal government had sole responsibility for deciding which immigrants had access to which benefits. In fact, the Supreme Court had ruled that states could not even bar legal noncitizens from their own benefit programs. The new federal welfare law, however, allows states to bar noncitizens from their own cash and medical assistance programs and from TANF and Medicaid, which are funded with federal dollars. By limiting immigrants' access to federal assistance and vesting states with the authority to set eligibility rules for immigrants, the federal law implicitly gave states another choice: whether to create new state-funded substitute benefits for immigrants.

In many ways, then, welfare reform's immigrant provisions represent a new experiment in federalism and, as a result, raise a number of far-reaching questions. For example, since the federal government determines how many and which immigrants are admitted to the United States, does the federal government have a special obligation to provide for them? What are the implications of this new devolution given that most of the immigrant population is concentrated in only a handful of states? Is the federal goal of promoting self-sufficiency achieved by devolving eligibility decisions to the states?

New State Choices

In this report, we examine what states have done with their newfound responsibilities and assess some of the implications of their policy choices for the questions raised above. PRWORA presented states with five key sets of decisions. States must decide whether to:

• provide federally and state-funded TANF and Medicaid to pre-enactment immigrants (i.e., those already in the United States on August 22, 1996);
• provide new state-funded substitute benefits for immigrants losing eligibility for federal assistance, including the following:
  (1) a food stamp substitute program;
  (2) an SSI substitute program;
  (3) TANF for post-enactment immigrants (i.e., those entering after August 22, 1996) who are subject to a five year bar on federally funded assistance; and
  (4) Medicaid for the same post-enactment group.
• extend their existing cash and health safety net programs (such as General Assistance, or GA) to immigrants losing federal eligibility;
• implement new restrictions on eligibility for federal, state, and local public benefits for undocumented and other "unqualified" immigrants; and
• create or expand programs to promote naturalization.

Generosity at First Glance

Many states have chosen to provide considerable assistance to immigrants, particularly when the costs are shared with the federal government. Despite fears of a race to the bottom with states providing as few benefits as possible, nearly every state has opted to maintain TANF and Medicaid eligibility for immigrants who were already in the United States when the federal welfare law passed. But even where the costs are borne by the states and localities, many states have stepped in to provide assistance. Over half the states have opted to provide one of the four key substitute programs to immigrants listed above.

Giving with the Right Hand, Taking with the Left

Upon closer inspection, though, many of the new substitute programs states created are limited in the extent to which they actually reach immigrants. For example, many states target only discrete groups such as children or the elderly. While targeting these groups may seem to help the most vulnerable populations, it leaves out the largest group: working-age adults. Further, targeting noncitizen children helps relatively few families since three-quarters of all children in immigrant families are U.S.-born citizens who never lost eligibility. Since their noncitizen parents remain ineligible, however, the household still receives fewer benefits than before welfare reform.

Most states providing substitute benefits to immigrants also limit the reach of their substitute programs by imposing additional conditions on eligibility, such as sponsor-deeming. Under sponsor-deeming the income of an immigrant's sponsor—who signs an affidavit promising to support the immigrant—is counted as the immigrant's when making benefit eligibility determinations. The result usually disqualifies the immigrant for benefits. States also restrict immigrants' access to benefits by imposing residency requirements and by mandating that immigrants apply to naturalize in order to receive assistance. Finally, some of the new substitute programs for immigrants are temporary and expire by the year 2000.

Existing State Cash and Health Programs: A Similar Story

Although many states have kept immigrants eligible for their existing cash programs for the low-income population (usually called GA programs), they are often limited by design. Nearly half the states do not have a state or locally funded cash assistance program and those that do often serve only discrete populations, such as the elderly, disabled, or children. These programs also provide more limited benefits than their federal counterparts. On average, GA programs for the elderly and disabled provide only 77 percent of the average monthly SSI benefit. Further, many GA programs are time-limited, intended to provide interim assistance only until federal assistance can be obtained. Finally, states have often conditioned eligibility for GA by imposing sponsor-deeming and residency requirements.

Few states have restricted immigrants' access to state health insurance programs for those ineligible for Medicaid, nor have they conditioned eligibility with sponsor-deeming, residency, and other requirements to the extent that they did in their GA programs. But fewer than half the states have a health insurance program covering some portion of the low-income population. Those states with programs often serve only selected populations, provide more limited services than Medicaid, or have limited enrollment slots.

Unqualified Immigrants

Another of PRWORA's legacies is the new distinction drawn between "qualified" and "unqualified" immigrants. Undocumented or illegal immigrants have long been ineligible for most public benefits, but this new classification broadens both the groups of immigrants ineligible for assistance and the set of public programs from which they are barred. The law barred undocumented immigrants as well as certain lawfully present immigrants from most federal, state and local public benefits. Consequently, while PRWORA broadened states' authority to set policy for qualified immigrants, it narrowed states' authority to make policy for unqualified immigrants.

California is the only state to take an aggressive approach to implementing the new restrictions on unqualified immigrants. Under the leadership of former Governor Pete Wilson, at least 20 California agencies have issued regulations to bar unqualified immigrants from public services, ranging from the Lead Hazard Control Program to the issuance of commercial driver's licenses. Like his earlier efforts under Proposition 187, which sought to bar undocumented immigrants from public education and other services, most of the state's efforts have been stymied by court challenges. A handful of other states that provided state and local cash or health assistance to immigrants regardless of legal status have since barred the undocumented, but none has attempted to impose restrictions as wide-ranging as California's.

What Explains State Choices?

When we look across the decisions that states have made, a number of patterns emerge. While most states with large immigrant populations (such as California, New York and Illinois) have chosen to provide substantial assistance to immigrants, many states with small immigrant populations (such as Maine and Nebraska) have also made generous decisions. States that have strong existing safety nets—they provide generous state-funded cash assistance and health care to their general population— also tend to make generous choices when it comes to providing assistance to immigrants. States with higher per capita incomes are also generally more likely to provide assistance than states with lower per capita incomes. However, states with large budget surpluses do not appear to provide more assistance than those with small surpluses.

Implications of New Federal and State Policies

Despite the federal benefit restorations and the many states that have chosen to assist immigrants, the social safety net for immigrants remains weaker than before welfare reform and noncitizens generally have less access to assistance than citizens. Some vulnerable groups remain without assistance and variation in services offered across state immigrant safety nets has increased.

Immigrant exceptionalism embedded at the federal and state levels

PRWORA institutionalized the concept of immigrant exceptionalism—treating noncitizens differently from similarly situated citizens—to a new and unprecedented degree in social welfare policy. In some instances, the states have followed the Congress's lead by imposing new types of restrictions on immigrants' access to benefits, including immigrant-specific residency requirements or time limits.

State programs do not fully substitute for federal assistance

Because state assistance programs are limited in their reach, only a handful of states have been able to fully replace lost TANF, Medicaid, or SSI benefits for ineligible immigrants.

Differences between citizens and noncitizens exaggerated

States with more extensive safety nets for their low-income populations tend to be the states that choose to provide assistance to immigrants, leaving immigrants in those states with greater access to assistance than the immigrants living in states with weak safety nets. As a result, states often have both a new substitute program for immigrants and an existing one, or they have neither one. In fact, over half the states have neither a new or existing state-funded cash assistance program available to post-enactment immigrant families during their first five years in the United States. The same is true for state-funded health insurance programs. Because states have more authority to restrict immigrants' access and immigrants have fewer federal benefits to fall back on, devolution has led to even greater variation across state safety nets for immigrants than citizens.

California is different

Despite its anti-immigrant rhetoric, California provides more assistance to immigrants than almost every other state. At the same time, California stands out as the only state to aggressively pursue cutting unqualified immigrants off state and local benefits. This divided approach to immigrant policy reflects the unique politics of immigration in California, where increasing numbers of immigrants are naturalizing in order to vote and immigrant advocacy organizations are growing in strength, yet ballot initiatives such as those limiting affirmative action and bilingual education are approved by the public.

Limited assistance for post-enactment immigrants

Despite their newfound authority to set their own eligibility rules, many states report modeling their policy choices on the example set by the federal government. Some states have followed the federal government's lead by restricting post-enactment immigrants' access to state cash and medical assistance programs, just as the federal government restricted post-enactment immigrants' access to several federal programs. Their choices have meant that state safety net programs intended to provide assistance to those ineligible for federal programs—such as General Assistance—restrict eligibility to the very groups that lost federal assistance. As a result, the same immigrants who are barred from federal programs often fall through the cracks of state programs as well.

Passing the buck

By barring many immigrants from federal assistance, the federal government shifted costs to states, many of which already bore a fiscal burden for providing assistance to immigrants. States that opted to provide substitute benefits to immigrants clearly bear an even greater fiscal responsibility. Because some state safety net programs are paid for in part or whole by localities (California's General Relief and New York's food substitute program, e.g.), a portion of the fiscal responsibility has been passed through from the states to local governments.

Eligibility does not ensure access

Although this report focuses on state eligibility decisions, the rules alone do not ensure that immigrants receive assistance for which they qualify. It may be the case that even if states make every effort to keep immigrants eligible for public benefits, they may not apply for it. Recent analyses of immigrants' use of public benefits indicate that many noncitizens are not seeking assistance for which they remain eligible. The sheer complexity of and constant changes in eligibility rules are likely to play a role. But concerns (some of which are unfounded) about the impacts of benefit receipt on an immigrant's ability to sponsor a relative or naturalize are also having a chilling effect on immigrants' use of public benefits.

Decisions still to be made

It has been over two and a half years since the federal welfare law passed, but states are not done setting policy for immigrants. States face a host of immigrant-related decisions that have not been addressed here, such as whether and how to enforce the new affidavits of support signed by immigrants' sponsors. The federal government may restore benefits to more legal immigrants, leaving states with new decisions about whether to shift their substitute programs to cover populations still ineligible for federal benefits. States may also choose to change the decisions they have made at any time. They may scale back benefits if economic times worsen or they may provide more benefits if the impacts of restrictions on immigrant families is too great.

One thing that is not likely to change, however, is the devolution of authority from the federal government to the states to determine immigrant access to public benefits. States will continue to make decisions for their immigrant populations and, consequently, play an increasingly important role in shaping the nation's immigrant policy.

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