States Find Cash Cow: It Is Impoverished Kids in Foster Care, Hooray!

If you are a child in foster care, things are probably not going your way. You're not living with your parents, and a state agency is in charge of you. You're probably very poor, and maybe you are disabled. You sure don't look like a funding bonanza for your state, but guess what, you might be! An op-ed by University of Baltimore law professor Daniel Hatcher in the Baltimore Sun this week points out that some states, including Maryland, are using private contractors to take foster kids' Social Security (SSI) benefits as a way to make some extra bucks. Well that is just about the worst thing we've ever heard. Let's theft-splore.

Hatcher has written extensively about foster care and the relationship of these children to the state. He writes:

Our state foster care agencies are apparently so underfunded that they are taking resources from abused and neglected children. The agencies are taking control over foster children's Social Security benefits (when the children are disabled or have deceased parents) and using the children's funds to repay foster care costs. In other words, Maryland is requiring the children to pay for their own care... This even though Maryland is rightly already legally obligated under state and federal law to provide and pay for foster care services.

Okay, that is very repellent, Maryland. And although the issue has been in litigation, it doesn't exactly seem to be illegal, although folks like Daniel Hatcher are working on it. Also repellent: Maryland paid Maximus, Inc., a health and human services contractor, to figure out how to maximize the revenue the state could squeeze out of these vulnerable kids. Because "revenue maximization" is a service that Maximus happily provides.

On a sales document summarizing its services, Maximus says if a state hires the company to implement what it unironically calls an "SSI Advocacy" project, the company will ensure "an increased SSI eligibility rate among foster care population increasing revenue to off [sic] the costs of foster care placement," plus the following awesome financial benefits:

  • Enhanced revenue for the State to help offset cost of care for children placed in out of home settings
  • [Reduction of] State’s TANF caseload
  • $5.00 generated for every $1.00 spent on implementation of an SSI Advocacy Project

Foster children and poor families are a huge money-maker, who knew? Maximus runs these SSI Advocacy projects in seven states: Alaska, California, Florida, Iowa, Nebraska, South Carolina, and Wisconsin. The company receives a cut of whatever money it saves a state, by whatever means, whether that means advising state to take benefit money from impoverished kids in foster care, consulting with them on how to improperly bill Medicaid, or suggesting they make sure eligible Americans don't actually sign up for anything. Not surprisingly, the company has run into trouble in many states.

Wisconsin, in particular, stands out. According to PR Watch, Maximus has served as a "revenue maximization consultant" to the state since the 1990s. In 1997, Wisconsin enacted its Wisconsin Works (W-2) welfare program and began privatizing its welfare system, outsourcing programs that had previously been run by state agencies to private contractors, including Maximus. What could go wrong? Oh, nothing, just some improper billing. In 2000, Maximus billed Wisconsin $500,000 for work that had nothing to do with W-2 and instead paid for parties and entertainment. Oops. In 2013, it turned out that Maximus was also responsible for advising Wisconsin to overbill the federal government by millions of dollars in Medicaid reimbursement funds. Instead of firing the company, Wisconsin in 2011 awarded Maximus a $21 million contract to run Wisconsin's foster care system until 2016. Nice one, Wisconsin.

Outsourcing welfare programs to private corporations with a profit motive really works well! Because they're only dealing with the lives of very poor and vulnerable people, so no one will really care if they screw around with the money unless the state gets in trouble for it. Poor people don't have any political power! Especially poor kids! Are you surprised to learn that Maximus has a political action committee? Of course you aren't. PR Watch writes:

Maximus ladles on the campaign contributions and lobbying dollars, contributing $5,000 toward Governor Scott Walker's recall election campaign. Maximus also paid $100,000 a year for exclusive access to Republican governors through the Republican Governors Public Policy Committee, a secretive group recently exposed by Citizens for Responsibility and Ethics in Washington and the New York Times.

Maryland, at least, is on the right track. The Maryland legislature is considering a bill to protect children in foster care. The bill would require the foster care agency to serve kids in a fiduciary capacity, meaning they'd have to act in the kids' best interest, and to reserve at least some of the kids' federal benefit money for their current unmet needs, and also for their future needs when they age out of the foster care system. The bill also would require foster care agencies to teach kids about money management. We would have thought that "acting in kids' best interest" would actually be the mission statement of a foster care agency, but okay, Maryland, it's a start.

Wisconsin, though? Man, we wish those kids could go be in foster care somewhere else.

[Baltimore Sun/PR Watch/Bloomberg]


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