Food Stamp and Medical Assistance Caseload Reductions in Milwaukee County

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

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

The report has been prepared for Milwaukee County to examine the changes in public assistance caseloads in the county for food stamps, medical assistance and AFDC cases. Published monthly caseload data and client caseload records for selected months are used to track caseload declines and to attempt to explain how the caseload has changed for both families and individuals since December 1995. A previous study was used to track earnings and public assistance for the December 1995 AFDC population through December 1996. This analysis did not use wage match data but does use selected monthly welfare files to track cases through September 1999. Funding support for this study was provided in part by the Helen Bader Foundation.

SUMMARY

Caseload Declines Were Sharpest Prior to W-2

Milwaukee County AFDC caseloads stayed at or above the 35,000 level for the period 1986 through 1995 during which time caseloads in the balance of the state dropped rapidly. During 1996 and 1997 the county's AFDC caseload began declining rapidly, dropping 41 percent to 21,844 by September 1997, attributable in large part to a heavily funded Pay for Performance initiative which placed unprecedented scrutiny and requirements on new and existing AFDC cases. Under W-2, cases continued to decline but at a lower rate than under Pay for Performance. As of September 1999, 6,051 families received a W-2 payment, 3,046 were in Kinship Care, and 2,837 received an SSI Caretaker Supplement payment.
Most of the decline in food stamp and medical assistance caseloads took place prior to W-2 as well. Food stamp cases declined by 25 percent from December 1995 to October 1997, and medical assistance cases declined by 13 percent. The number of cases on both medical assistance and food stamp stabilized during W-2.
The number of individuals with medical assistance coverage has declined at a sharper rate than the 13 percent decline in caseloads. From December 1995 to October 1997, the number of adults on medical assistance declined by 25 percent and the number of children by 17 percent.

Milwaukee County AFDC/W-2 Cases: 1996-99

AFDC, W-2, Kinship Care and SSI Head Cases: 1996-1999
Child and Adults on Food Stamps and MA

Follow-up on the December 1995 Public Assistance Population

By August 1999 only 13 percent of December 1995 AFDC cases expected to work received a W-2 payment while 42 percent remained on food stamps and 53 percent had at least one person on medical assistance. Much of the decline in AFDC/W-2 (42 percent) took place during Pay for Performance in 1996. By February 1998 just prior to the end of AFDC, only 7,676 cases, or 30 percent, received a W-2 or AFDC payment.
Payments to families with special needs (Kinship care for families with relatives caring for the children of an absent parent, and SSI caseheads) showed less of a decline. By September 1999, 56 percent remained on food stamps and 62 percent remained on medical assistance.
Food stamp cases with no dependent children showed the highest percent leaving assistance. Only 21 percent of cases expected to work remained on food stamps in September 1999 while 43 percent of the SSI/aged population were still receiving food stamps at the same point.

Rentention of AFDC/FS/MA Cases

Public Assistance Status of Milwaukee County Residents

Much of the Milwaukee County population, particularly in the central city, has been in the welfare system at some point. Using welfare files for the periods December 1995, December 1996, December 1998 and September 1999, a total of 305,910 Milwaukee County residents were found to be in a welfare case during one (or more) of the four months examined.
Over 203,629 individuals were on medical assistance during at least one of the months examined. In September 1999, a total of 112,547 persons were on medical assistance and 91,082 were no longer on medical assistance.
For the food stamp population, 200,311 individuals were on food stamps during the months examined. A total of 95,690 persons were on food stamps in September 1999 and 104,621 persons were no longer receiving food stamps.

The "Working Poor" and Public Assistance

The food stamps income limit is 130 percent of poverty (or $18,044 for a family of three and $21,710 for a family of four). Despite the increasing number of families leaving AFDC, the number of working families receiving food stamps while increasing initially during 1996-1997 remains at about 9,000 cases, well below the estimated "working poor" population of 41,400 single and married parent families with earnings below 130 percent of poverty. Many of these families may be eligible for food stamps.
For medical assistance, the number of employed cases qualifying for a one-year employment-related medical extension rose initially from 2,554 in December 1995 to 4,134 in December 1996, and then to 5,692 in December 1998 and down to 5,477 in September 1999. Any Medicaid case which leaves AFDC/W-2 for employment-related reasons remains eligible for medical assistance for one additional year, yet few families take advantage of this coverage.
Changes in state and federal legislation expanded the population eligible for medical assistance by raising allowable income limits and relaxing requirements, in large part to accommodate the population leaving public assistance. Despite these changes the population with medical coverage has instead declined, although not as much as the AFDC and food stamp caseloads. Over 100,000 Milwaukee County individuals from cases currently or formerly on MA are estimated eligible for medical coverage but are not covered.
Additional numbers of "working poor" families not on public assistance may also be eligible for BadgerCare. State income tax returns for 1998 showed an estimated 59,270 families earning below 185 percent of poverty and potentially eligible for medical coverage if they are not covered by health insurance at their place of employment.
While the Healthy Start and BadgerCare programs expand the potential number of families eligible for medical care by increasing the allowable income limit to 185 percent of poverty ($30,895 for a family of four), few working families with income over 150 percent of poverty are enrolled in these programs.

Reasons for Declines in Food Stamps and Medical Assistance in Milwaukee County

Most of the declines in the food stamp and medical assistance population took place prior to W-2 and were directly related to the Pay for Performance initiative during 1996 and 1997 when applicants and many of the existing AFDC caseloads came under a heavily-funded administrative effort which included mandatory job search, "sum sufficient" child care, child support reporting and work requirements. For the first time sanctions and denials of aid applied to food stamps as well as AFDC.
It is likely that many families leaving AFDC or food stamps did not understand that they remained financially eligible for medical assistance. The most common reason for closures and terminations in both medical assistance and food stamps was failure to report required financial or other changes to the caseworker. Failure to meet reporting requirements results in closure of all assistance groups. Many cases which closed appear to likely be eligible for medical assistance under Healthy Start and/or BadgerCare.
Confusion about medical assistance and food stamp work regulations and the stigma of welfare may keep individuals from returning to or applying for medical assistance or food stamps. A confusing multi-package medical assistance program requires many families to enroll in a combination of Healthy Start, Medicaid and BadgerCare all with different financial eligibility levels.
The number of closures, terminations and denials continued at a constant monthly level despite rapidly declining caseloads. This resulted in fewer new cases, increased turnover and churning of existing cases, contributing to further ongoing declines.

Retention and Addition of Persons on Food Stamps

Policy Issues to Consider

The medical assistance and food stamp populations could be greatly increased to include more eligible uncovered individuals through the following policy initiatives:

Use a simplified mail-in short form for food stamps only, medical assistance only, and child care which does not require individuals to go to the welfare office.
Contract with agencies or businesses to assist individuals in completing the short form Medicaid or the short form Food Stamp application.
Review the medical assistance caseload in Healthy Start to identify families likely to also be eligible for food stamps.
Match files of adults previously on AFDC/W-2/food stamps/medical assistance with the state wage file to identify those likely to be financially eligible for food stamps, medical assistance and child care subsidies with follow-up mailings to families informing them of their potential eligibility and options.
Mail notices to all families receiving the Wisconsin Earned Income Tax Credit and not on medical assistance or food stamps informing them that their families may be eligible for either food stamps or medical assistance based on their adjusted gross income.
Streamline the Medicaid application by raising income limits and eliminating the asset test and two-parent restrictions. These changes would eliminate the necessity for many families to go through complicated multi-package coverage under Medicaid, Healthy Start and BadgerCare, each with their own financial eligibility requirements.
In 1996 Wisconsin was given the opportunity to streamline Medicaid coverage and to increase access for families with higher income and asset levels but chose to retain the AFDC medicaid program eligibility levels. As a result, a complicated multi-package approach has evolved requiring families to enroll in a combination of Healthy Start, Medicaid and BadgerCare, thus introducing unnecessary confusion and administrative requirements and limiting families' access to medical assistance.

CONTINUE

Table of Contents

Summary (above)

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