This week I want to focus on Iowa’s welfare system and what can be done to improve it.
This is an issue I hear about regularly from constituents. Efforts have been made over the past 30 years to improve the welfare system in Iowa and there has been some good success, but more improvements are needed. Our goal is to make sure the truly neediest Iowans receive the assistance and weed out those who do not. Iowans do not want precious taxpayer resources wasted on those who should work but aren’t. We want to see these dollars go to the Iowans who are genuinely the most in need.
As many reports have revealed and many have observed over the years, welfare programs began with good intentions to help meet needs of our low-income population but they have gone way beyond that original goal to the point where it is easy to find families that have been dependent on government assistance for several generations. In addition benefits have become so strong that many people are disincentivized from going to work or getting training. That has served to hamper the efforts of employers to fill jobs they desperately need, thus it has acted as a drag on our economy.
These results were never the intention of the program and so it has become very damaging to the character and dignity of those who are trapped in its web. These programs have actually acted to hinder many people from experiencing the pride, self-respect, and confidence that come from work and taking personal responsibility. Instead they have helped induce depression and despair, thus affecting many people’s mental health. In addition over the long term they have acted to financially reward the breakup of families, out of wedlock births, and unemployment, just what we do not need. The more money you put towards an activity, the more of the activity you will get. Intact families and going to work are what keep people out of poverty.
It would be good to explain what the catch-all term “welfare” refers to. It refers primarily to these state government programs: FIP (Family Investment Program) — cash assistance; Medicaid and Hawk-I – health care for low income people; SNAP or aka food stamps; child support recovery services, child care assistance; disability services; mental health services; refugee services; job training for low income people; and long-term care for seniors (nursing homes).
FIP or the Family Investment Program in which cash assistance is given to low income families was changed drastically with the passing of the federal welfare reform bill in 1996. Since that time families can only receive cash benefits for a lifetime maximum of 60 months (five years) and cannot have assets of more than $2,000 to qualify. This does not include house or car.
Currently Iowa families average about 22 months of assistance. FIP benefits in Iowa have not increased since 1989.
The Medicaid and Medicaid expansion programs cover health care for people who 1) are U.S. citizens, 2) are residents of Iowa, and 3) meet certain income and asset conditions. Fifty percent of those covered under Medicaid are children. Twenty-five percent of those covered under Medicaid are elderly but they represent 68% of the cost due to the expense of nursing homes. Medicaid actually provides 50% of nursing home revenue. There are about 660,000 Iowans on Medicaid, which is about 1 in 5 Iowans on the program.
SNAP or more commonly known as food stamps provides food assistance for people up to 200% of the federal poverty level. They can only be used for “food” items, that is, not for cleaning supplies nor for any paper products.
The Iowa legislature is tackling the issue of welfare reform. There has been much action on this primarily in the Iowa Senate. Last session the Iowa Senate passed a bill to require an audit of the Medicaid program to ensure that the people on the program really qualify for it. There needs to be a audit process independent of the Department of Human Services. Medicaid is the fastest growing area of Iowa’s budget, currently costing $5 billion in federal and state money annually. So it is imperative that this program be brought under control in order to make sure that the neediest Iowans are the ones receiving the services.
States that have audited their Medicaid programs have found shocking results. The Foundation for Government Accountability details some of the Medicaid fraud found around the country. Michigan identified more than 7,000 lottery winners who were still collecting welfare, some with jackpots as high as $4 million. Illinois uncovered more than 14,000 dead enrollees on Medicaid. Utah and Maine found that individuals were using their welfare benefits exclusively out-of-state. Arkansas discovered more than 20,000 individual with high-risk identities, including people using stolen identities or even fake Social Security numbers, who were enrolled in its program.
In addition Arkansas found that over 10% of its Medicaid expansion population were improperly receiving benefits because they earned too much money. In Louisiana, the legislative auditor made a random selection of 100 Medicaid recipients and determined that 82 of those individuals did not qualify to be receiving all their benefits.
Oregon has announced it that as a result of a Medicaid audit they did, the state would save over $100 million annually by ending improper payments to people who didn’t qualify for the program. Right now it’s hard to know how much Medicaid fraud we have in Iowa but there’s a good chance if other states have fraud, then we do too.
Iowa has a Medicaid Fraud Control Unit located within the Department of Inspections and Appeals that does a good job for the state investigating fraud. But they don’t get all the cases of possible fraud turned over to them that they likely should. This is what the Iowa Senate bill is aimed at.
The Iowa Senate has also passed a bill to require that a person be current in child support payments to be eligible for SNAP (food stamps). Also being considered is work/school/volunteer requirements to be eligible for Medicaid and SNAP. These would apply to able-bodied adults without dependents.
The Foundation for Government Accountability finds since Arkansas implemented work requirements for the state’s food stamp program in 2016, enrollment of non-pregnant, non-elderly, able-bodied adults without dependents dropped 70% within a year. The study also showed that those same people who sought work increased their incomes 126% on average within a year of leaving the food stamp program.
A few of these people were able to make more than $40,000 within a year. Taxpayers are estimated to save $28 million per year since 2016 from this action. In addition, their working has boosted state tax revenue by more than $2.3 million because they are paying more income and sales taxes.
The same study found that further, similar to Arkansas, Kansas and Maine have experienced declines in the SNAP enrollments after reinstating work requirements for the able-bodied adults without dependents on SNAP. Six months after the work requirements were implemented, Maine’s SNAP enrollment dropped from more than 16,000 to less than 3,000. And those folks experienced a 114% increase in income when they entered the workforce. Within three months of implementation nearly half of Kansas’ enrollees exited the program, gained employment and experienced an average increase in their incomes of 127%.
In conclusion, the results we’re seeing in other states are encouraging and so we should continue to work on the issue of welfare reform and make the system work for everyone so that not only do taxpayers win but so do those who need the rewards of work, family, and personal responsibility and especially those who truly need our services the most.