Analysis of Food Stamp and Medical Assistance Caseload Reductions in Milwaukee County: 1995-1999 (Part Three)

University of Wisconsin-Milwaukee Employment and Training Institute, January 2000

III.    Reasons for Declines in Food Stamp Cases

Most of the decline in the food stamp population during 1996 and 1997 occurred among families receiving both AFDC and food stamps. With the implementation of the state's Pay for Performance mandate which applied to both AFDC and food stamps, cases came under considerably more scrutiny for compliance with child support, income reporting and work requirements, particularly on the front end where new and returning applicants were required to complete job search prior to receiving assistance. The increasing scrutiny of both AFDC and food stamp cases together with "sum sufficient" child care likely contributed to much of the decline in cases already receiving AFDC and food stamps. The scrutiny increased the turnover of existing cases and at the same time reduced the number of families applying or reapplying for food stamps under Pay for Performance requirements.

High case turnover and reductions in the number of out-of-state applicants can be seen as contributing factors to food stamp case declines as well. In December 1995, 5,087 of 34,440 families on food stamps (or 15 percent) were on short-term (i.e., for less than 6 months). By February 1998, the number of short-term cases had risen to 6,017 of 24,873 families (24 percent). By September 1999, 8,024 of 23,080 families (35 percent) were on food stamps for less than 6 months in their current episode. The number of food stamp cases among recent state in-migrants likewise declined. In December 1995, 1,643 food stamp families reported moving into Wisconsin within the last 12 months. The number of in-migrants dropped down to 1,050 in December 1996, and down further to 707 in December 1998.

At the same time that the number of new food stamp cases declined, the number of case closures and terminations remained fairly constant, resulting in an increasing percent of closures/denials/terminations which exacerbated the rate of decline and turnover. By October 1997, however, the Pay for Performance efforts had stopped as the welfare focus shifted to transferring AFDC cases to W-2.

Reasons for Closures, Terminations and Denials of Food Stamp Cases

Changes in a case's AFDC, food stamps or medical assistance status were detailed in the computer files with reason codes for each category of aid. The reasons for aid denials and terminations as well as the dollar amounts of AFDC and food stamp payments were analyzed here to assess the status of cases and then to determine longitudinally the reasons for subsequent caseload status.

The most common reason cited for the termination or closure of a food stamp case was for failure to comply with monthly income reporting requirements and/or eligibility reviews. The second most common reason was for case income exceeding the eligibility limit. Work program sanctions made up few of the closures or terminations recorded in December 1995 but then showed a marked increase during September 1996 and December 1996, reflecting Pay for Performance AFDC sanctions which automatically triggered food stamp sanctions. During the transition to W-2, food stamp sanction activity was again very low, until increases were seen during the implementation of FSET (the Food Stamp Employment and Training Program, which required 20-30 hours of work or FSET activities per week) during 1998 and 1999.


Reasons for Termination of Food Stamps Cases
Cases in:

Reasons for Termination

12/95
9/96
12/96
2/98
12/98
9/99
Failure to comply with monthly reporting,
eligibility review or verfication of information
1,791
1,417
1,459
2,146
1,458
1,586
Increase in income
780
547
686
484
666
662
Sanctions
64
707
454
79
419
498
Other
384
415
494
199
118
348
TOTAL
3,019
3,086
3,093
2,908
2,425
3,094


Reasons for Denial of Food Stamp Cases
Cases in: 
Reasons for Denial 12/95

9/96 

12/96 

2/98 

12/98 

9/99 

Failure to comply with monthly reporting,
eligibility review or verfication of information
1,045
419
645
539
495
559
Increase in income
613
503
501
524
560
737
Sanctions
26
73
168
34
186
102
Other
228
201
257
124
131
148
TOTAL
1,912
1,196
1,571
1,221
1,372
1,546

Reasons cited for denials of food stamp applications were mostly due to failure to provide required information and for cases exceeding the income limit. Despite declines in the overall food stamps population, the number of family applicants denied food stamps continued to increase gradually throughout 1997, 1998 and 1999. By September 1999, two-thirds of all food stamp denials were for family cases, and one-third for individuals.

The Impact of Sanctioning on the Food Stamp Population

Sanctions for failure to cooperate with the child support enforcement or work requirements accounted for most sanctions applied to individuals on food stamps. These sanctions were applied to the individual and not the children in the household, resulting in a reduction of the food stamp amount or, in the case of one-person cases, the closing of the food stamp group.

Sanction policies for both AFDC and food stamp cases have changed over time. In December 1995, only 109 food stamp cases were sanctioned and almost all were AFDC cases where the children remained on both AFDC and food stamps. In that month 3,579 AFDC cases had a casehead sanctioned (likely for failure to cooperate with the child support or other requirement) and almost all of these cases were also on food stamps where they were not sanctioned.

By September 1996, the Pay for Performance initiative resulted in a considerable increase in sanctioning for food stamp cases as well as for AFDC cases: 706 food stamp cases were closed with a PFP sanction and 144 were closed for a food stamp work program violation. In addition, 334 food stamp cases were reduced to $10 per month and another 467 non-sanctioned food stamp cases were on placed on alien status where the children but not the adult received food stamp benefits. (Adult aliens can be excluded from the food stamp group while their children remain eligible for food stamp benefits.) Meanwhile in the AFDC program, PFP sanctions resulted in 2,195 AFDC cases closing or receiving no payment and in 1,669 cases with a reduced AFDC check. In addition, another 1,087 AFDC caseheads were sanctioned for failure to cooperate with child support enforcement, but most of these caseheads remained on food stamps.

As W-2 was being phased in, almost all food stamp sanctioning activity stopped when Pay for Performance ended. Case records showed only 179 sanctions in February 1998, then sanctions rising to 1,677 in December 1998, and to 1,455 in September 1999. The sanctions were attributable entirely to failure to meet FSET requirements and not to W-2 case sanctions. Under W-2, unlike PFP, sanctioning for W-2 reasons does not trigger a food stamp sanction.

The Food Stamp Employment and Training (FSET) Program has historically targeted the population of adults without dependent children, a population which also received general assistance in the past. Despite changes in the FSET legislation to include families with dependent children in the program, engagement of this population for mandatory FSET work activities does not appear to have occurred.

IV.    Reasons for Declines in the Medical Assistance Caseload

Much of the decline in Medical Assistance was related to changes in AFDC work program policies instituted under Pay for Performance in 1996 and 1997. Many AFDC cases closed for non-employment related reasons and this resulted in the closing of MA for adults as well as for children. Some families leaving AFDC could retain MA eligibility for their children under Healthy Start but not for the adult(s). Under AFDC regulations, cases which closed for employment-related reasons (increased earnings or increased hours of employment) were given a year's extension for medical assistance coverage. In addition, families ineligible for AFDC could obtain medical assistance coverage for children and pregnant women under Healthy Start which provided MA benefits for pregnant mothers and children under age 6 in households with income up to 185 percent of the federal poverty level and for children ages 6 through 14 in households with income up to 100 percent of the poverty level.

Currently, there are several types of medical coverage packages and eligibility varies causing considerable confusion. These include Medicaid, MA extensions, MA deductible, Healthy Start and BadgerCare. Families increasingly need to blend combinations of medical coverage for various members of the household.

Healthy Start includes coverage for children under age six for a family of four with up to $30,888 per year of income and has no limit on assets. A family of four may cover their children aged six to fourteen if their income is no greater than $16,452 per year in income. By contrast, Medicaid has an income limit of $9,864 annualized income for a family of four and an asset limit of $1,000. In large part Healthy Start has been used when AFDC/Medicaid coverage lapses. Most Healthy Start cases in September 1999 were previously on AFDC-related Medicaid. Under Healthy Start pregnant mothers and younger children are covered but other adults and youth over age fourteen are not covered.

For those families over the allowable income limits for Medicaid, the MA deductible requirement provides an opportunity for all eligible members of the household (adults and children) to receive MA. Until the MA deductible is paid, however, only those children eligible for the Healthy Start retain MA coverage. As a consequence, in a growing number of cases the children have medical coverage through Healthy Start coverage but the adults are not covered.

The state's new BadgerCare program is designed to provide health care coverage for uninsured children and parents who do not quality for MA or Healthy Start but who have income below 185 percent of the poverty level. BadgerCare is similar to Healthy Start as there is no asset limit and care is provided for income limits up to $30,888 for a family of four.

Reviews of BadgerCare enrollees show that most of the cases in BadgerCare were already receiving MA for some other person in the household, with BadgerCare providing medical coverage for the balance of household members. BadgerCare is largely being used to cover individuals from families in AFDC-related Medicaid or not covered by Healthy Start. As MA cases come up for their regular review, BadgerCare is being used to cover medical costs not paid under the 100 percent federally-funded Medicaid and Healthy Start programs. As a result of Healthy Start funding for children in families with up to 185 percent of poverty, increasing use of BadgerCare is concentrated in the population of families with children in Healthy Start and not eligible for Medicaid. In some cases combining a family MA deductible and Healthy Start coverage may be less expensive for the state than using BadgerCare and Healthy Start. This combination also eliminates the family's required monthly premium payments under BadgerCare.

Unlike Healthy Start, BadgerCare covers all persons in the family regardless of age. There is a co-payment for income levels over 150 to 185 percent of poverty (or $25,047 annualized income for a family of four), and once enrolled families can maintain coverage with income up to 200 percent of poverty with co-payment requirements increasing with the family's income. However, very few cases with income over 150 percent of poverty are enrolled in BadgerCare.

Reasons for Closures, Terminations and Denials of Medical Assistance

The largest number of medical assistance closures were cited as "person no longer eligible." Failure of the MA casehead to report required information (financial data, child support required reporting) was cited as the second most frequent reason listed for terminations and closures of MA for the months examined.

During the months examined, the number of MA closures and denials remained at a fairly constant level even as MA cases in the system declined. The most common reason for denial of Medical Assistance was for applicants required to document payment of a required MA deductible ("spend down") calculated on the difference between federal income limits and the amount of income for the household. By September 1999, the number of MA groups with income above the limit and under the MA deductible requirement had increased to 2,174.


Reasons for Termination of Medical Assistance Where No One in the Cases Remains on MA
Cases in: 
Reasons for Termination 12/95

9/96 

12/96 

6/97  

9/99 

Failure to comply with monthly reporting,
eligibility review or verfication of information
508
614
608
823
596
Increase in income
22
30
37
23
40
AFDC-related closure
542
496
431
0
0
Other - "person no longer eligible"
898
827
973
1,198
1,250
TOTAL
1,968
1,967
2,049
2,044
1,886


Reasons for Denial of Medical Assistance Where No One in the Case Remains on MA
Cases in: 

Reasons for Denial

12/95

9/96 

12/96 

6/97 

9/99 

Failure to comply with monthly reporting,
eligibility review or verification of data
495
447
483
433
344
Increase in income
269
257
310
269
289
AFDC-related closure
474
283
367
0
0
Eligible for MA after deductible in paid
1,219
1,006
1,196
1,320
2,174
Other
733
455
455
389
245
TOTAL
3,190
2,448
2,811
2,411
3,053

Status of Cases in September 1999

Most children and families covered under medical assistance in Milwaukee County in September 1999 were on Medicaid which has an income limit of $772 per month or $9,264 annualized for a family of four. Some 21,172 households were on Medicaid with an additional 6,163 given Medicaid extensions (including 5,477 for employment-related reasons).

Non- Medicaid cases on Healthy Start totaled 7,771 in September 1999 of which 1,286 also were in BadgerCare to cover the mother's medical. In another 6,058 of these cases the casehead was not on medical assistance and is likely eligible for BadgerCare as are 2,300 children in the cases without medical assistance.

Other cases and individuals were in the medical assistance deductible category which makes them eligible for medical assistance coverage after their deductible has been paid. This population included 3,851 cases that had 3,654 children and 4,252 adults in this status. These cases could choose to enroll in BadgerCare depending on the co-pay requirement, but few appeared to be electing BadgerCare as of September 1999 when only 177 cases moved from deductible to BadgerCare status.


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