Aligning Policies and Procedure in Benefit Programs
An Overview of the Opportunities and Challenges Under Current Federal Laws and Regulations

PDF of full report (17pp.)

By Stacy Dean and Sharon Parrott

January 6, 2004

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This paper is part of an on-going project at the Center on Budget and Policy Priorities to encourage improved coordination amongst the major state-administered low-income benefit programs.  The Center is currently working to produce a guidebook for states and localities interested in revising their policies and procedures with the goal of improved program integration.  We hope to collaborate with interested state agencies to design new policy and procedural models and to provide technical assistance to those looking for more detail on how federal program rules permit program coordination.  For more information about the project, contact the authors.

Over the past 15 years, the welfare system has undergone a major transformation.  Instead of a limited set of programs focused primarily on providing benefits to low-income non-working families, states and the federal government now operate a more comprehensive set of programs and services designed to promote employment and to support low-wage workers.  These changes cannot be explained solely by the 1996 welfare law or changes to the cash assistance programs.  Expansions in the Earned Income Tax Credit and Medicaid, the creation of the State Children’s Health Insurance Program (SCHIP), increased resources for child care for low-wage working families, and retooling the federal food stamp program to serve working families better are all a part of this shift.

The low-income families that now participate in the core benefit programs administered by states — Medicaid, the State Child Health Insurance Program (SCHIP), food stamps, Temporary Assistance for Needy Families (TANF) cash assistance, and the Child Care Development Fund (CCDF) — are a diverse population and include many working families.  Over the past several years, there has been a growing recognition that families often face a set of uncoordinated requirements when they participate in more than one program and that these requirements may make it difficult for families already struggling to juggle work and family obligations to participate in these programs.

There are significant opportunities for states to streamline and integrate program rules and many states already have taken steps to take advantage of these opportunities.  In nearly all areas governing program eligibility and benefit delivery, federal law allows states to align program rules in ways that can better serve families and ease administrative burdens for states.  A number of states[1] have used flexibility in federal law to align eligibility rules where possible, streamline paperwork requirements, reduce office visit requirements and use information gathered for one program when determining or reviewing eligibility for another.

There are challenges to aligning and streamlining program rules at both the federal and state levels.  At the federal level, these programs each provides a unique set of benefits that serve unique purposes, are administered by different agencies, and have different financing mechanisms.  At the state level, different state agencies and state legislative committees often have responsibility for the administration, funding and oversight of different programs.

Despite these challenges, finding ways to package and deliver these benefits together via a simple transparent system is a worthwhile goal.  A state that conforms program eligibility and procedural rules where possible can make it far easier for families to understand eligibility rules and can ease the administrative burdens on states that operate these programs.

Significant coordination can be achieved across the areas of application processes, procedural requirements for program recipients, and financial and non-financial eligibility criteria.  This report provides an overview of the key opportunities for and challenges to alignment in these areas.

In each of these areas, federal law generally affords states the flexibility to align policies and procedures in ways that could lead to a far simpler system for families to comply with and states to operate than exists in many states today.  Under federal law and rules, states have significant discretion to tailor eligibility criteria (such as the income eligibility cutoff) and procedural rules (such as application processing rules and benefit retention procedures) in their Medicaid, SCHIP, TANF, and child care programs.  And, while states have less flexibility to design food stamp eligibility rules than they have in the other programs, new regulations and the 2002 Farm Bill significantly expanded the flexibility states have to set certain eligibility policies — such as how to treat vehicles when determining eligibility — and to establish simpler application and benefit retention procedures.  These new food stamp changes provide many new opportunities to streamline program rules in an array of low-income programs to make it easier for families to apply and retain eligibility in all of these programs.  In addition to these options built into the programs’ basic structures, states may also apply to federal agencies for waivers of program rules.

The most promising coordination efforts use one program’s strengths to leverage improvements in other programs.  This paper endeavors to highlight these opportunities.  For example, some states use information a family provides in order to maintain its food stamp eligibility to renew a family’s Medicaid coverage automatically; this means the family does not have to undergo two repetitive reviews.

It is important to note that in a few instances conforming program rules or procedures can increase — rather than lessen — barriers to participation for families.  For example, under the Food Stamp Program, applicants generally must meet face-to-face with a caseworker while the Medicaid program permits a wholly mail-in application process.  If the Medicaid program conformed its application procedures to the Food Stamp program rules, all Medicaid applicants would be required to come into a welfare office.  Such “program conformity” would serve to increase access barriers to the Medicaid program.  This paper highlights program integration options that would result in simpler, less restrictive program rules.

Click here to read the full-text PDF of this report (17pp.)

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