An Aid to Families with Dependent Children (AFDC)–Medicaid managed care policy consensus has emerged in the American states. Although there are two main organizational forms—primary care case management and risk-based capitation models—states are converging on the risk-based approach for their AFDC recipients. Risk-based Medicaid managed care for AFDC recipients assumes a distinct purpose and meaning. The reform is not just about cost control and improving access but about enduring welfare concerns: deservingness, need, and empowerment. Despite recent federal policies that have essentially severed the eligibility link between AFDC and Medicaid, state policy elites still conceive of poor families on Medicaid as a “welfare” group. Assumptions about the need for behavior modification and the need to integrate this group into “mainstream” America shape perceptions about why Medicaid managed care is appropriate for AFDC-Medicaid recipients.