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GAO analyzed over 1,000 active Aid to Families with Dependent Children (AFDC) cases in 13 states to determine the collective benefits actually received by those families. GAO also analyzed, through hypothetical situations, the effect that working would have on benefits received from certain groups of public assistance programs. States control the amount of AFDC payments to welfare families, the standards of need for various family sizes, and the services covered by Medicaid. Because of this, benefits for families with similar needs differ greatly among the states. States may choose to offer certain AFDC program extensions which could allow more families to receive Medicaid and AFDC. By not electing to provide such AFDC extensions as benefits to families headed by an unemployed father, or to pregnant women, the state can limit the number of families receiving benefits. The diversity of coverage among states creates inequities because families with similar needs and circumstances are treated differently.

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