Angela Mapes Turner, The Journal Gazette

Indiana's nearly 2-year-old experiment with a privatized welfare system appears to be failing.

The backlog of pending Medicaid applications has ballooned in counties where welfare is handled by private contractors. From May 2008 - after the most recent wave of counties joined the new system - to December 2008, pending cases increased 86 percent. In counties working under the old system, the backlog increased only 16 percent, according to a Journal Gazette analysis of state data.

And the contractors, led by IBM Corp., missed deadlines for processing Medicaid applications at twice the rate of counties that haven't joined the new system.

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