April 22, 2019
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LePage’s food stamp asset test helps no one beat poverty

USDA via Flickr | BDN
USDA via Flickr | BDN
A U.S. Department of Agriculture photo advertising the Supplemental Nutrition Assistance Program, or food stamps.

The LePage administration last year made it more difficult for low-income adults without children to qualify for food stamps by imposing federal work requirements that most states have often waived in times of economic weakness.

This year, while food insecurity is on the rise in Maine (but not nationally), the administration is celebrating that Maine saw the largest proportional drop in the nation in the number of residents receiving food stamps.

Also this year, the LePage administration plans one more change to move food assistance further out of reach for low-income adults without children. Starting Nov. 1, someone seeking food stamps for the first time or re-applying will have to pass an asset test: If the combined value of certain assets — a savings account, a second car, a snowmobile — exceeds $5,000, the applicant is ineligible.

The move to impose an asset test on adult SNAP recipients without kids would be laughable if it didn’t involve the prospect of people going hungry and sinking further into poverty. It will do nothing to help poor Mainers escape poverty, nothing to save the state money, nothing to cut down on inefficiency in SNAP administration and nothing to address Maine’s growing hunger problem.

Asset tests have long been part of federal public assistance programs, but so has state flexibility to waive that requirement. Some 36 states, including Maine, have decided against imposing an asset limit on SNAP recipients.

It’s easy to understand why: Asset limits — especially limits as low as $5,000 — are bad policy. They’re a relic from welfare programs of a different age, when it was customary for households to remain on public assistance for long periods. Today, households are more likely to require assistance temporarily. And rather than help people amass the resources they need to escape poverty and drop assistance — say, job skills and a bit of a nest egg — asset limits do just the opposite. They encourage people to spend down their assets in order to qualify for help.

That means draining that savings account or dispensing with that second vehicle that someone in the household might need to get to work, which is what Gov. Paul LePage says he expects Maine’s low-income households to do in order to qualify for help.

One egregious part of this policy change is that LePage’s administration is selling it as a way to “prioritize funding for those who need it most,” as Health and Human Services Commissioner Mary Mayhew stated in her department’s announcement of the asset limit.

Perhaps prioritizing funding, in this case, means wasting more of it.

The federal government assumes 100 percent of the cost of SNAP benefits, so if the asset limit disqualifies SNAP beneficiaries in Maine, the state won’t see any of those savings. Meanwhile, the move impacts a SNAP cost category that state tax dollars do fund: administrative costs, which the state generally splits 50-50 with the federal government.

One reason so many states have eliminated their asset limits is because doing so greatly simplifies administration, cutting administrative costs. In 2001, Oklahoma spent $3.5 million in state funds to verify Medicaid beneficiaries’ assets (Medicaid assets tests no longer apply in most cases). Meanwhile, a Kaiser Family Foundation analysis found the state would have spent just $2.5 million on health benefits for those who were denied benefits based on the asset test. In essence, the state would have saved $1 million without the asset test.

Pennsylvania eliminated its SNAP asset test earlier this year and expects to save $3.5 million as a result. (The state imposed the limit under former Public Welfare Secretary Gary Alexander, who later recommended Maine implement one while consulting and plagiarizing for the LePage administration.)

There’s little reason to suspect Maine’s asset test will be anything other than a wasted administrative expense. In 2011, according to federal Food and Nutrition Service, the average SNAP-receiving household with no children had $344 in resources it could tap.

Meanwhile, Maine’s SNAP administrative costs are low, and the program has become even more efficient over the past decade. In fiscal year 2014, it cost the state and federal governments $15.03 in administrative costs for every Maine household receiving SNAP benefits, compared with $27.73 nationally.

Perhaps in a year, the LePage administration will celebrate another drop in SNAP dependence while food insecurity continues to rise — along with Maine’s food stamp administrative costs.



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