West Virginia Could be Heading in the Wrong Direction Regarding Food Assistance

Similar to last year, some members of the West Virginia House have introduced a bill (H.B. 4001) that would further restrict access to food assistance or SNAP. The bill would impose an assets test and require the West Virginia DHHR to implement a new comprehensive verification system by January 1, 2019.

The bill allows DHHR to contract with a third party vendor to implement the new verification system and it requires that the system pay for itself after one year. It would achieve these so-called savings by removing people on SNAP, Medicaid, and TANF. The bill would also require DHHR to track out-of-state SNAP spending and encourage DHHR to implement work requirements for non-disabled childless adults who work less than 20 hours per week in counties with “sufficient work or volunteerism opportunities.” 

Asset Limits for Food Assistance Are Counterproductive

HB 4001 requires reinstating a federal "asset test" on how much a household can have in assets in order to be eligible for federal food assistance or SNAP.  In 2002, the federal government made asset limits an option for states, allowing them to raise their asset limit or eliminate it entirely. Currently, the federal standard is a limit of $2,250 in resources such as cash and bank accounts, while retirement savings, primary homes/lots, and basic assistance are not counted. The test discourages and penalizes modest savings.

As of August 2016, 34 states – including West Virginia - and the District of Columbia have eliminated the "asset test" for SNAP. Five states have asset limits higher than the federal limit ($5,000 in Idaho, Maine, Michigan, and Texas and $25,000 in Nebraska), while 11 states still have the federal asset limit of $2,250 and $3,250 for households with an elderly or disabled member. Virginia is the only border state that adheres to the federal standard.

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After 2002, several states have determined their own asset test when it comes to vehicles. Thirty-two states like West Virginia do not have an asset test for vehicles, while federal SNAP rules count the market value of most vehicles above a dollar threshold ($4,650) toward the asset limits. HB 4001 would adopt federal SNAP vehicle asset rules that allow for some vehicle asset exemptions (e.g. used over 50 percent for work) but would count as an asset if the vehicle or vehicles’ value were above $4,650. By adopting this standard, it could force SNAP recipients to sell a car and be left with fewer assets down the road.

The reason most states have removed their SNAP asset test is that they recognized that it was counter-productive and punishes families for saving money for emergencies or for their children's future while they are temporarily enrolled in SNAP.  By removing the asset test or limit, it simplifies the application process, reduces errors associated with assets and vehicle information, and enhances access to education, training, and jobs. Studies have shown that asset limits reduce savings substantially and reduce participation and eligibility in the program. States have also found that administering an asset test for SNAP can be expensive and difficult. In some cases, it can cost more to administer than it can potentially reduce in SNAP benefits. 

Requiring an asset limit for SNAP would not only increase economic hardship and food insecurity among vulnerable populations, it could also hurt the state's economy by reducing federal SNAP benefits that flow into the state's rural areas. 

An Enhanced Verification System: The Good, Bad, and Ugly 

The adoption of a new enhanced verification for Medicaid, TANF and SNAP may help improve eligibility in these programs, however, if it is not properly administered it could wrongly deny assistance to thousands of eligible people. This could happen if it imposes an undo burden on low-income applicants (e.g. monthly verifications) and if the state opts to use a private contractor that is incentivized to kick people off from public assistance.  HB 4001 does this by mandating that if DHHR uses a private contractor then the verification system must pay for itself within a year or be discontinued. 

The experience in Illinois with using a private contractor to determine and filter eligibility for Medicaid offers some valuable lessons. When Illinois authorized $70 million to be used to hire a private contractor they found that a large majority of those the verification system booted from Medicaid were in fact eligible for the program. Moreover, most that were removed from the Medicaid rolls had not used Medicaid in the previous six month - therefore there were little in cost savings. The promised savings never materialized because many removed from Medicaid eventually had their coverage reinstated. 

One reason so many were removed from Medicaid even though they were eligible was that the private contract only gave people 10 days to respond to a letter verify their eligibility. While there were promises that Illinois would save $350 million in 2013 from implementing this new verification system, the state only saved $2.6 million. In short, Illinois spent millions of dollars on a private contractor to collect data the state already collected that led to canceling health care coverage for people that were likely eligible.

West Virginia should learn from the Illinois experience that this approach to eliminating fraud in public assistance programs does not pay off and could lead to a myriad of untended consequences that impact the well-being of our state's most vulnerable population. The state should focus its limited resources on more modest proposals to eliminate ineligibility in public assistance programs, such as making it easier to communicate with an adequate number of caseworkers.  Moreover, the state should focus resources on initial eligibility determination and adequate screening. And if the state and federal government really want to focus on where large potential savings can be realized, those efforts should aim to curtail fraud from undisciplined contracting and billing with vendors who are in a position to aggregate program benefits.

Expanding Work Requirements for SNAP is a Failed Policy

HB 4001 mandates that DHHR impose a work requirement for non-disabled childless adults (ages 18 to 49) in counties where DHHR deems there to be "sufficient opportunities for work or volunteerism.” These unemployed childless adults would have to work or be engaged in work related actives for at least 20 hours per week or would lose their SNAP benefits after three-months. The population that is subject to these work requirements or time limits tend to be very poor and most have a high school or less. This population can also face severe barriers to work, such as a lack of transportation or a drivers license, mental or physical limitation, a felony conviction, or were recently dismissed from a job.   

It is clear from the state’s nine-county pilot project where they enacted a work requirement for this population that failed to boost employment but succeeded in lowering SNAP enrollment. Altogether, according to DHHR, 5,417 non-disabled unemployed childless adults SNAP recipients across the nine-pilot counties were no longer enrolled after a year. DHHR made roughly 13,984 job referrals translating to just 259 people gaining employment. By removing the 5,000 plus caseloads, the state lost approximately $13 million in SNAP spending in 2017. DHHR concluded that “{o}ur best data does not indicate that the program has had a significant impact on employment figures for the ABAWD [able-bodied adults without dependents] population in the 9 issuance-limited counties.” 

SNAP caseload data shows a sharper decrease in enrollment – especially among adults – in the nine pilot counties where the work requirement was enacted than the 46 other counties without a work requirement In the nine pilot counties, there was a 17 percent reduction in adult SNAP recipients between 2015 and 2017 compared to a reduction of just five percent in the other 46 counties. From 2015 to 2017, the nine pilot counties represented 64 percent of the decline in adult SNAP recipients (12,379 out of 20,508). The decline in SNAP enrollment in 2017 led to a $13 million loss in federal SNAP dollars in West Virginia. If the work requirement was extended to the other 46 counties in the state, DHHR estimates than another 7,310 SNAP cases would be dropped. 

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The rapid decline of SNAP recipients in the last two years is mirrored by an even faster increase in meals served at food pantries. Between 2015 and 2017, food there were 7,104 more visits to food pantries – a 30 percent increase, according to WV FOODLINK. Altogether, food pantries served approximately 64,000 more meals in 2017 than 2015. While this rise may not be a causal relationship, it does show the additional demand being met by food pantries in these nine counties. 

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HB 4001 mandates that DHHR track out-of-state use of Electric Benefit Cards, however, beneficiaries have a right to use SNAP in all 50 states. Many recipients do shop across the border because they live near bordering states or may travel to visit friends and family out of state. Receiving SNAP should not limit spending to one geographical area. There are already policies in place that limit someone from, receiving SNAP in two states at the same time, which is a serious offense. Most cases of SNAP fraud happen in collusion with in-state corner retailers. If fact, two owners of retail corner stores in Huntington, West Virginia were recently arrested for giving cash for merchandise purchased using EBT cards. 

The SNAP program is vital to combating the state’s growing food insecurity. Instead of restricting access to food, medical care, and basic cash assistance, the state should be exploring non-punitive ways to help people out of poverty. This could include enacting a refundable state earned income tax credit, expand access to child care assistance, and pre-k for 3-year-olds.

 

 


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