Simplifyng health and welfare applications could cost state more than it saves, LAO says

May 3, 2010

The state currently spends about $1.5 billion from its general fund administering health and welfare program applications and enrollment, and could probably save several hundred million dollars a year by streamlining those programs and moving more of them online. But that savings could be wiped out, the Legislative Analyst notes, by increased enrollment in the programs that would come by making the application process simpler and easier to use.

If streamlining enrollment and doing more of it online leads to caseload increases of greater than 2 percent, the analyst says, then the cost to taxpayers for the added health and welfare benefits could exceed even the most ambitious estimates of administrative savings.

These enrollment increases, the LAO says, “may not be in the state’s best interest at this time.” The analyst thus recommends that the Legislature require the health and social service departments to conduct a “cost–benefit analysis of the impact of implementing various front–end strategies, such as enabling applicants to apply online to determine the likely impact of each such change on caseload and related costs.”

See the full report here.

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