States stumble privatizing social services

By Christine Vestal, Stateline.org Staff Writer

It sounds like a good idea: Replace state employees with a high-tech contractor to more efficiently screen thousands of applications for state support, and save taxpayers millions.

That’s what Texas and Indiana policy-makers thought. But early results of a privately run social services project in Texas and troubles with the bidding process in Indiana have caused both states to put their bold privatization plans on hold.

Last year, Texas chose Bermuda-based high-tech consulting firm Accenture to run the entire eligibility process for Medicaid, food stamps, Temporary Aid for Needy Families (TANF), long-term care and Children’s Health Insurance Program (CHIP). In January, the state launched a pilot privatization program in Travis and Hayes counties near Austin.