Groups warn bill jeopardizes food, health care assistance for thousands of Iowans

DES MOINES — Proposed legislation advancing in the Iowa Legislature would raise barriers for low-income Iowans to qualify for food and health care assistance, resulting in thousands of Iowans being taken off Medicaid and food assistance programs.

That is according to more than a dozen lobbyists and advocacy groups that spoke Tuesday in opposition to proposals in the Iowa House and Senate.

Iowans receiving public assistance benefits would face new "asset tests" and regular checks to determine their eligibility for programs under a bill that passed the Senate last week.

The groups pointed to projection from a nonpartisan state agency that predicts the bill will remove thousands of Iowans from the programs.

Republicans said requiring Iowans who are receiving public assistance benefits to undergo more rigorous eligibility verification reviews would bolster program efficiency, prevent fraud and weed out abuse.

“This is not about taking Medicaid or food assistance away from anybody,” said Rep. Joel Fry, R-Osceola, who chaired Tuesday’s subcommittee hearing.

“This bill is making sure the Iowans who are eligible for these benefits actually receive the benefits. If we want a sustainable program, it is incumbent upon the Legislature to make sure that we are protecting the tax dollar and that it is going to the right individual at the right moment in time.”

Natalie Veldhouse, representing Common Good Iowa, noted three groups are registered in support of the bill — Iowans for Tax Relief, Americans for Prosperity, and Opportunity Solutions Project — compared to 39 Iowa-based organizations registered in opposition, ranging from nurses to hospitals, social workers, and child and disability advocates.

“No one is better off when someone else loses food or the medical assistance that they need,” Veldhouse told a subcommittee of House lawmakers who gathered Tuesday for a hearing on the bill’s fiscal impact.

What the bill does

Senate File 494 would limit households seeking food assistance to a maximum of $15,000 in liquid assets and personal property. The applicant’s home, a first car of any value, and a second car worth up to $10,000 would not be included in that calculation.

Iowa now requires recipients to meet an income threshold but does not restrict assets.

Iowa currently offers SNAP benefits to households making less than 160 percent of the federal poverty level. The bill would codify that amount into law, which equates to a household income of $48,000 for a family of four.

The federal government requires SNAP benefits to be offered to those making at least 130 percent of the federal poverty level.

SNAP is administered federally; however, half of the administrative costs are paid by the state.

The Senate bill also includes rules for the Department of Health and Human Services to follow if they find a discrepancy in someone’s information. The recipient of public assistance would have 10 days to respond to the discrepancy or risk losing their assistance.

MaryNelle Trefz, representing Iowa ACEs 360 — which aims to improve the health and well-being of Iowans and mitigate the lifelong effects of childhood trauma — said that’s too little time, particularly in light of worker shortages affecting postal service.

Trefz pointed to Arkansas, where nearly 50,000 of the state’s residents lost their insurance in 2015 because they failed to respond in time under a 10-day deadline to provide documents verifying their income, despite the fact that many were eligible for help.

The impact

Opponents contend the proposed changes would raise the state’s costs by increasing the amount of paperwork and administrative oversight, while making it more difficult for Iowans to qualify for assistance, many of whom are children, people with disabilities and elderly Iowans.

Cyndi Pederson, representing the Iowa Food Bank Association and United Way of Central Iowa and the Iowa Hunger Coalition, noted that Pennsylvania in 2015 ditched its asset test for SNAP after a three-year pilot program that saw administrative costs outweigh reductions in spending.

It also resulted in tens of thousands of households being denied benefits because they failed to provide the proper documentation, Pederson said.

An updated fiscal analysis by the nonpartisan Legislative Services Agencies estimates 1 percent of Iowans receiving benefits will have their benefits canceled under the bill beginning in fiscal 2026 due to discrepancies. That includes roughly 8,000 people receiving Medicaid, 600 on the Children’s Health Insurance Program, 100 in the Family Investment Program, and 2,800 SNAP (food) recipients.

Iowa splits the cost of administering SNAP with the federal government and spent $2.2 million on SNAP administration in fiscal year 2022.

The Legislative Service Agency estimated the Senate bill would increase state costs by $7.5 million in the fist two years from increased staffing — 218 new full-time equivalents in the Health and Human Services Department and one new FTE in Iowa Workforce Development — plus IT costs and a contract with a third-party vendor to conduct frequent eligibility checks for people participating in public assistance programs.

By fiscal 2026, state costs would be expected to decrease by about $200,000. Beginning in fiscal 2027 and subsequent fiscal years, the change was estimated to decrease state costs by $8.2 million annually, according to the agency’s analysis.

Federal dollars would decrease by more than $42 million by the fourth year, according to the analysis.

That is federal tax dollars the state will lose out on that will be distributed elsewhere rather than in Iowa to benefit those families that need assistance, said Rep. Heather Matson, D-Ankeny.

“We no longer get the benefit of what we are paying our tax dollars for,” Matson said.

What’s next?

The Senate-passed bill would need to be reconciled with a House bill that would require able-bodied adults without dependents to participate in employment and training to receive SNAP benefits.

It also would direct the state to seek federal permission to enact work and community engagement requirements for some Medicaid recipients.

The House version of the bill also would seek a federal waiver to ban the use of SNAP benefits to purchase candy and non-sugar-free soda, and includes funding for a program that encourages healthier food purchases among SNAP participants.

The Senate bill does not include those provisions.

Rep. Tracy Ehlert, D-Cedar Rapids, noted other states have submitted similar waivers in past years under both Democratic and Republican administrations only to be denied.

Ehlert, too, questioned whether lawmakers will provide additional funding to Iowa food banks and hunger assistance programs.

Representatives of those programs said Iowans already have difficulties accessing government food assistance, with SNAP participation at a 14-year low, while food banks are reporting record-high numbers of Iowans seeking help.

The House subcommittee voted 3-2 along party lines, with Democrats Ehlert and Matson opposed, to advance the bill to the full House Appropriations Committee for consideration to meet a Friday legislative deadline.

Fry said he intends to work with both the House and Senate bills, “and will make some determination about how we move forward in the future in later dates.”

Comments: (319) 398-8499; tom.barton@thegazette.com

Who benefits from SNAP?

The Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) is the nation’s most important anti-hunger program, reaching more than 41.2 million people nationwide last fiscal year.

In fiscal year 2022, it helped:

* 278,800 Iowa residents, or 9 percent of the state population (1 in 11).

* More than 66 percent of SNAP participants in Iowa are in families with children.

* More than 31 percent are in families with members who are older adults or are disabled.

* More than 50 percent are in working families.

SNAP participants in Iowa received $429.32 million in benefits in 2019, $545.55 million in 2020, $727 million in 2021, and $596.71 million in 2022 (including temporary pandemic relief in 2020 through 2022).

Average monthly SNAP benefits for fiscal year 2020 (pre-pandemic period):

* All households: $222

* Households with children: $398

* Working households: $242

* Households with older adults: $91

* Households with non-elderly disabled individuals: $154

The U.S. Department of Agriculture estimates that $1 in SNAP benefits generates $1.50 in economic activity.

Households receive SNAP benefits on electronic benefit transfer cards, which can be used only to purchase food at one of about 254,400 authorized retail locations around the country, including some 3,000 in Iowa.

Source: Center on Budget and Policy Priorities analysis of data from USDA Food and Nutrition Service