"Governor plans to privatize services
You can tell Rebecca Mason is angry — you can hear it in her voice. The 46-year-old Indianapolis resident has multiple sclerosis, is a diabetic, is blind in her left eye and walks with a cane. She is receiving state welfare benefits. But, even under such circumstances, all this is not the source of her anger.
Mason is upset with Gov. Mitch Daniels’ billion-dollar plan to privatize some assistance programs run by the Family and Social Services Administration, achieving, according to the governor, some $500 million in administrative savings over 10 years. The goal, Daniels said, is “to improve customer service, reduce waste and fraud and improve Indiana’s poor welfare-to-work record.”
According to the governor’s plan, private business would handle the initial screenings of applicants for food stamps, Medicaid and Temporary Assistance for Needy Families, with those initial screenings being done over the Internet, on the telephone or in person. Some 1 million Hoosiers, or one in six state residents, would be directly affected.
“It makes me angry,” said Mason, who receives food stamps, Medicaid and Medicare benefits. “I understand that they want to get rid of fraud. But at the same time, they need to know that they are hurting people who need the help the most.”
Many poor and elderly people applying for benefits have limited access to computers and sometimes to telephones, according to critics of the plan like Mason. Thus, having people apply online and over the phone will drastically reduce the human element in the delivery of benefits and discourage many eligible recipients from seeking benefits. State officials disagree and say that will certainly not be the case.
The state would sign a 10-year, performance-based contract with a business consortium headed by IBM that would provide the intake services and technology to support the eligibility system. The system would be implemented in four phases geographically, starting in August 2007. Each phase would have to be successfully completed before moving on to the next phase. A pilot program is expected to begin in Grant County.
Daniels said the program will create 1,000 new jobs in the state, with 850 of those jobs coming in the first two years. Roughly one-third of all FSSA workers who determine welfare eligibility will remain state employees charged with making final eligibility decisions. The other eligibility employees will be offered positions at equal or greater pay with IBM and its partners, pending drug screenings and criminal background checks.
Under the new system, people would be able to apply for welfare benefits 24 hours a day, seven days a week by telephone or online. The state and IBM will maintain offices in all 92 counties, which is a concern of welfare recipients like Mason, and with Democrats in the General Assembly.
“Our goal will be a simple one,” Indiana House Speaker B. Patrick Bauer (D-South Bend) said in a statement. “We want to make sure that the interests of the people of Indiana are best served by these efforts. We want to make sure that the care of thousands of Hoosiers is made a higher priority than the profit margins of a private company.”
Whether that is the case or not has not been determined, Democrats say.
“It’s too early to tell,” Rep. David Orentlicher (D-Indianapolis) said. “Sometimes when government tries to privatize services, it’s successful and sometimes it’s not.”
Orentlicher pointed to problems in several states that tried to privatize some social service benefits, such as Wisconsin, Texas and Florida. He said his concern was with some of the companies that make up the consortium, calling it a “mixed bag.”
The House Ways and Means Committee only received some of the program’s details last week and had not had the time to do a complete financial analysis, said Tammy Robinson, a staffer for the committee. “If there aren’t going to be any less employees … at least from a salary and benefit standpoint, there aren’t going to be any savings there,” she said.
FSSA officials say savings will come from a streamlined system with greater access through technology. The cost of updating and streamlining the current system in state hands would be $2.1 billion, compared with $1.6 billion to $1.16 billion for the IBM contract plus $500 million in in-house savings — if the system is privatized, Daniels said.
Mason believes this is just a ruse. The savings, she contends, will come on the backs of the poor and the elderly. “The thought is to make it difficult for people, who will get tired and just quit trying to get their benefits,” she said.