SNAP's Excess Medical Expense Deduction
Targeting Food Assistance To Low-Income Seniors And Individuals With Disabilities

PDF of this report (42pp.)

By Ty Jones

August 20, 2014

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Executive Summary

The Supplemental Nutrition Assistance Program (SNAP) provides over 8 million struggling elderly individuals and individuals with disabilities (as well as millions of other low-income households) with benefits that they can use to purchase food.  Many low-income households with elderly and disabled members pay high out-of-pocket expenses for health care that create additional barriers to affording an adequate diet.  SNAP allows households to deduct unreimbursed medical expenses over $35 per month from their income in calculating their net income for SNAP purposes to more realistically reflect the income they have available to purchase food.  This, in turn, could potentially qualify them for higher SNAP benefits.

While the medical expense deduction plays an important role in ensuring that households with high medical costs receive adequate benefits, it is underutilized.  Only about 12 percent of households with elderly or disabled members claim it, and available data show that the share of these households with eligible expenses is likely much higher.  This paper explains the deduction, current barriers that keep eligible households from claiming the deduction (or the full amount), and actions that state officials and advocates can take to address this problem.

The medical expense deduction can have a significant impact on SNAP benefits.  For a typical senior living alone, claiming $50-$200 in medical expenses can result in an additional $7-$69 in SNAP benefits a month.

A wide range of medical and related expenses may be deducted, including many that health insurance does not cover and that SNAP participants may overlook.  Deductible expenses include transportation costs to a doctor or pharmacy, over-the-counter drugs, medical supplies, and home renovations to increase accessibility.  It is important to inform eligible households of the range of deductible expenses so they can fully leverage the deduction.

Federal SNAP rules require verification of medical expenses.  States have flexibility in how to meet this requirement, and some state practices create obstacles that may discourage eligible households from claiming full expenses, such as:

  • Relying solely on documentation to verify expenses.  While federal regulations state that documentation is the primary source of verification, state agencies can also attempt to verify on the phone or in person and can offer assistance to households that require it.
  • Requiring verification of unnecessary factors.  Clear state guidance can help prevent caseworkers from placing an unnecessarily high verification burden on participants.  Under federal regulations, for example, caseworkers do not need to require verification that a medical procedure was medically necessary unless they find it questionable.
  • Requiring re-verification of unchanged expenses at recertification.  When households renew their eligibility at recertification, the state agency may choose not to require re-verification of medical expenses that have changed by $25 or less unless the information is incomplete, inaccurate, inconsistent, or outdated.  This can reduce the burden imposed, for example, by requiring a household to provide the original prescription for a medication that it was prescribed many months ago for a chronic or lifetime illness.

State agencies and advocates can help ensure that eligible households are aware of the deduction and make full use of it.  They can, for example:

  • Encourage a linkage between Medicaid and SNAP databases.  Properly sharing data between state health and SNAP agencies can help caseworkers obtain and verify medical information.
  • In the application and SNAP interview, inform recipients of the deduction and full range of deductible expenses.  Some SNAP applicants may not list expenses because they are not aware of the deduction or eligible expenses.  State agencies can ask applicants about specific expenses on the application and can train caseworkers to identify participants and ask about these expenses during the interview.
  • Adopt a standard medical deduction.  Fifteen states have received U.S. Department of Agriculture (USDA) waivers to implement standard medical deduction demonstration projects, under which they deduct a standard amount (representing the average medical expenses for senior or disabled SNAP households) from all eligible households that demonstrate medical expenses of over $35 a month.  A standard medical deduction can benefit both participants and state agencies, as it simplifies the process for both parties, and may encourage participants to provide evidence of expenses. 
  • Create outreach materials to inform eligible households.  Advocacy groups, state agencies, and agencies and advocates working with seniors and people with disabilities can create and disseminate resources that inform eligible households of the deduction and encourage them to list eligible expenses when applying for benefits.  Collaborating with organizations working with seniors and people with disabilities can help advocates and state groups reach these populations.
  • Conduct trainings with caseworkers and advocates.  Training can help ensure that caseworkers and advocates working with eligible households fully understand the deduction and eligibility rules, such as eligible expenses and required verification.  Trainings can also help sensitize caseworkers and advocates to the stigma some people may experience in claiming medical expenses. 

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