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When the State Budget Committee meets this month to review performance of the $1.34 billion welfare privatization contract, it will look mostly at numbers – how quickly food stamp and Medicaid applications are processed and error rates. By necessity, the contract review must be driven by numbers, but the urgency for addressing the problem-plagued deal comes from the Hoosiers suffering under its terms.
State Rep. Gail Riecken, D-Evansville, cites as an example a father battling early-stage Alzheimer’s disease who forgot to send in required paperwork for his son, who has Down syndrome. The younger man’s benefits were cut, leaving the family struggling to have them reinstated.
Riecken shared the example in letters she sent last month to Rep. Henry Waxman, D-Calif., and Sen. Tom Harkin, D-Iowa, asking Congress to investigate the Indiana Family and Social Services Administration’s contract with IBM Corp. and Affiliated Computer Services Inc. It’s just one of hundreds of stories of frustration and heartbreak resulting from the 2-year-old deal that replaces state-employed caseworkers with telephone and Internet applications processed by private-sector workers.
“While I appreciate that FSSA is finally stepping up to the plate, the agency’s list of grievances fails to address the inherent problem of privatization – the dismissal of caseworkers,” Riecken said in a news release. “The primary beneficiaries of welfare services, the elderly and the disabled, relied on personal caseworkers to help navigate the system. These people cannot rightly be expected to handle a system based on technology with which they have little familiarity.”
After ignoring initial warnings about the deal, denying there were problems with the project’s roll-out and even, at times, blaming clients for lost paperwork and unreturned phone calls, FSSA finally called on IBM to submit a corrective action plan for its bungled performance. Congressman Waxman and Sen. Harkin criticized the program from the start, pointing to Texas’ failed effort to privatize welfare services.
In addition to Riecken’s letter, U.S. Reps Baron Hill and Andre Carson of Indiana have asked the U.S. Department of Agriculture, which has oversight of the federal food stamp program, to review the contract.
An FSSA spokesman said last month that the congressmen’s letter to the agriculture secretary was politically inspired. But complaints about the contract have come from both sides of the political aisle. Two Republican state legislators, Rep. Suzanne Crouch and Sen. Vaneta Becker, filed legislation in the last session to require more oversight of the deal. U.S. Rep. Brad Ellsworth, D-Evansville, last week called on Gov. Mitch Daniels to develop an alternative plan if the private vendors fail to correct mistakes.
Both federal and state lawmakers have a financial responsibility in demanding more oversight. Medicaid and food stamp programs are joint federal and state obligations, with the federal government picking up roughly two-thirds of Medicaid costs. USDA, which pays about half the state’s costs for administering the food stamp program, questioned the FSSA thoroughly before giving the go-ahead for the privatization deal in 2007, with Indiana officials assuring the feds that they had a contingency plan if things went awry.
The contingency plan, it now appears, was simply to pay more to IBM and ACS. The original contract of $1.16 billion has grown by 15 percent since it was signed in late 2006. IBM has been awarded an extra $47.3 million – some of it to fix the very problems created by its takeover of vital state services. The growing cost is one reason for federal and state lawmakers to remain vigilant; the continuing disservice to Hoosiers who depend on welfare services is an even better reason.
