Welfare programs shouldn’t encourage dependency, but far too often they end up trapping recipients on government support. This year, two state lawmakers filed bills aimed at addressing the work disincentives that currently accompany welfare benefits. In theory, these bills sound like good ideas. Unfortunately, the approaches chosen by lawmakers for these bills have some glaring flaws.

Here are some examples:

Good Idea: Ensure welfare recipients aren’t discouraged from seeking work or career advancement.

Wrong Approach: The bills create new transitional benefits for the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) programs that stack on top of the program’s already existing transitional benefit programs. The result is a new layer of costly complexity on top of an already overly complex system.

Additionally, the new transitional benefit would scale benefits based on the recipient’s income. While this may sound like a good idea, the government does not collect real-time income earned by recipients, and checking income is not an easy administrative process. In reality, this change will mean more people are enrolled in state welfare programs longer.

Good Idea: Simplify income reporting to reduce burdensome bureaucracy.

Wrong Approach: The bills require applications for Missouri’s welfare programs to fit onto one page. The problem is, as the state’s department of social services reports, “a one-page form would not capture all of the information federally required to determine eligibility for these programs. FSD would need to follow up with each applicant to obtain the required information to determine eligibility.”

In other words, one page is not enough space to gather the information sufficient to comply with federal law. This increases the likelihood that more individuals will be enrolled in welfare programs than are eligible to receive benefits, only for state authorities to discover this problem after significant tax dollars are improperly spent.

Good Idea: Focus on federally funded programs that states have the flexibility to reform.

Wrong Approach: Since SNAP and TANF are federal programs, the federal government also gets a say in whether they will pay for whatever reforms Missouri enacts. But the reforms for TANF and SNAP outlined in the bill’s fiscal notes will very likely not be approved by the federal government. No other state has anything similar to what is being proposed here. So, if enacted, these reforms and new benefits would be paid for by state taxpayers. All told, the fiscal note estimates the bill would cost more than $200 million per year in new state tax dollars.

Given all of these concerns, it’s safe to say that without significant changes, I think these bills would move Missouri in the wrong direction. They would grow the welfare state, worsen program integrity, and significantly increase costs.

Since there are a number of welfare reforms that could have been proposed that encourage work, improve program accountability, and responsibly spend taxpayer dollars, it is mystifying why such reforms have not been pursued. With less than two weeks remaining in the legislative session, it’s unlikely we will see revisions to the current bills that truly reform the system. Improving Missouri’s welfare state is a difficult but worthy task. Instead of moving forward with bills that could do more harm than good, I hope lawmakers will choose to learn from this years’ experience and carry this important conversation into 2024 with reforms that actually accomplish what they say they want to accomplish.

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Distinguishing between short-term and long-term poverty could be a wise move, but how valuable would a single snapshot be in describing a multi-generational problem? Not very. While Missouri should know who is receiving entitlements and for how long, there is a better way to collect that information than what is being proposed.

Utah’s Intergenerational Poverty Initiative is now in its seventh year and has five years of data that allows the state to more accurately measure intergenerational poverty and the success of its various anti-poverty efforts. It also has a data dashboard that shows current data and the trends in intergenerational poverty since 2014. Unfortunately, similarly precise information is unavailable for Missouri, although there are ways to approximate the extent of cyclical poverty in our state.

For example, in my recent essays, “Intergenerational Poverty in Missouri” and “Creating Pathways for Self-Sufficiency,” I estimated the scope of intergenerational poverty in Missouri with a combination of U.S. Census data and economic mobility data. Such extrapolation gives us a general picture of intergenerational poverty in Missouri, but detailed and up-to-date data would be that much more helpful for policymaking purposes.

The years of data Utah has is important for establishing trends, measuring the effectiveness of programs, and having the ability to direct resources to where they could do the most good—in other words, making the most out of the state’s anti-poverty spending. It is doubtful any of that could be accomplished by the singular study that would be commissioned by this bill.

If Missouri’s policymakers are serious about addressing intergenerational poverty and making wise use of welfare expenditures, they should consider a longer-term initiative like Utah’s. As I explain in my essays, intergenerational poverty harms not just those trapped in poverty, but also the rest of the state via costly welfare spending and slower growth.  Ongoing data collection could be well worth the investment if Missouri would use that information to effectively and efficiently move people up and out of poverty. 

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While other unemployment statistics seem to be trending positively, 15 percent of men who should otherwise be working (according to historical standards) now “seem to have left the labor force permanently,” no longer even bothering to look for work. The consequences of these numbers go beyond their effect on national economic output; they threaten the national spirit.  The saying, “idle hands are the devil’s workshop” is backed by data, including a huge drop in happiness associated with unemployment. Research also links joblessness and disability with America’s deadly opioid epidemic.

Glaeser asserts that a governmental “war on work” is driving this problem.  He points to a series of programs incentivizing joblessness such as food stamps and housing voucher payments.

To solve this crisis, Glaeser argues that we must educate, reform social services, empower entrepreneurs, and even subsidize incentivize employment. That is an ambitious—but promising—agenda for ending the war on work before it consumes a generation of Americans.

I hope you can come hear him lay out that agenda on Wednesday, May 9 at St. Louis University. The lecture will begin at 6:00 p.m.

The post Edward Glaeser to Discuss War on Work in St. Louis appeared first on Show-Me Institute.

Arkansas has an auditing program similar to the one we’ve talked about, and it appears the state just turned up a lot of ineligible beneficiaries.

Nearly one-third of those cases involved people who did not report changes of address as required by the state. More than 25,000 people were removed from the program because they were receiving public benefits from more than one state. [Emphasis mine]

DHS says more than 16,000 people were removed because of unreported employment. Others were removed from the program because they were eligible for Medicare, while another 4,100 cases involved inmates who still had Medicaid coverage.

In all, about 80,000 Arkansans ineligible for Medicaid were removed from the program’s rolls. 

As we’ve noted before, there are lots of non-nefarious reasons that someone may be on Medicaid but ineligible for it, including unfamiliarity with its rules and regular fluctuations in their own income. But whatever the reason for that ineligibility, the more efficiently the state can steward funds and direct them to needy beneficiaries who actually qualify for the program, the better the results will be for the program, its beneficiaries, and the taxpayers who fund those benefits.

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For most states, education remains as the biggest slice of pie for general expenditures, and for Missouri this is still the case. However, education is no longer the strong magnet of state dollars it once was.

The table below, from the U.S. Census Bureau, shows that while education still commands the largest share of Missouri’s general expenditures, spending on public welfare has increased at a faster pace than spending on education since the 2008 recession.

Some takeaways from this table:

• Education expenses are almost 35% of total expenditures, but only grew (on average) by 0.3 percentage points annually from 2009 to 2014.
• Public welfare expenses make up nearly 30 percent of total expenditures, but are the biggest culprit in the growth of total spending, with expenses rising at an annual rate of 0.9%.
• If we combine public welfare spending with Hospitals and Health spending, then spending on healthcare and social assistance would account for 42 percent of general expenditures.

As we approach the 2017 legislative session, these trends in spending can inform policy decisions. If public welfare spending growth continues unabated, other services—like education, transportation, and public safety—might find dollars increasingly hard to obtain.

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While DSS retains final authority, the contractor will evaluate recipients’ eligibility more often than DSS has previously. SB 607  requires the contractor to evaluate welfare eligibility based on “income, resources, and assets”  at least quarterly and “identify on a monthly basis any program participants who have died, moved out of state, or have been incarcerated longer than 90 days.” SB 607 is patterned after a law Illinois adopted that, once implemented, has removed 120,000 people thus far who should not have been on the welfare rolls.

Currently, DSS only determines eligibility annually. Thus someone could move to another state between eligibility checks and could continue receiving benefits for up to a year. As of 2014, Missouri had a large percentage of the adult population on welfare compared to other states, ranking twelfth in participation rates (see the chart above).

Supporters believe this measure could save taxpayers as much as $25 million by 2019. Maybe we should use the money we will save to experiment with successful welfare-to-work programs that other states have implemented. 

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But the state’s school districts aren’t the only state programs that deserve a closer look from Missourians. So, too, does the state’s Medicaid program, and neighboring state Illinois serves as a good example. From the Wall Street Journal late last year:

The federal government requires states to do an annual audit of the Medicaid rolls to ensure that participants are eligible, but in most states few people are removed. Ms. Bellock wanted to use an outside, private firm, Virginia-based Maximus, to audit [Illinois’s] 1.3 million Medicaid case files—which represents about 2.7 million individuals. The company has more extensive databases than the state and would likely identify more ineligible Medicaid beneficiaries.

Maximus recommended removing 249,912 cases by the end of February 2014, according to the state. By law, state employees had to review the recommendations and decide if cancellation is appropriate. The state removed 148,283 cases—about 234,000 individuals, as many cases represent families—from the Medicaid rolls.

Many of the removals suggested in Illinois were probably the product of expected churns in incomes; as people earn a little more money, they may no longer qualify for the Medicaid program. There’s nothing necessarily nefarious about that.

But whether people receiving benefits improperly are doing so because their incomes have recently changed or because they’re unambiguously defrauding the system, that doesn’t change the fact that the money has been misspent—and misspent needlessly. No one knows for sure if the same kind of waste that happened in Illinois is going on in Missouri, but that’s sort of the point; like in the St. Joseph School District and Illinois, the only way we can prevent future problems is with vigilance today.

Wasted money hurts the people Missouri is trying to help by siphoning off limited state resources, and that’s why Illinois’s third party eligibility verification framework, which appears to have effectively identified thousands of ineligible beneficiaries in the Land of Lincoln, is one Missouri may want to consider. Our state’s auditors deserve our immense appreciation for the work they do currently, but they don’t always have the resources or data to do some of the analyses some of these private vendors can do. As a supplement to our auditors’ work—and mark your calendar, because I don’t say this often—the state should think about following Illinois’s lead.

The post In Support of An Outside Audit of Missouri’s Medicaid Program appeared first on Show-Me Institute.

This population extends into Missouri. According to data collected from food stamp programs, the number of food stamp recipients in Missouri with no other cash income rose from 139,418 in June 2007 to 165,903 in June 2009. This represents an increase of 19 percent.

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