Quote of the Day:

It all adds up to a perversion of one of Ronald Reagan’s best lines: Trust, and don’t verify.

–Robert Doar why means testing for public assistance has become a farce


Despite a healthy labor market, enrollment in Medicaid and the Supplemental Nutrition Assistance Program (SNAP) is high. What gives?

AEI's Robert Doar tells us what gives in a must-read piece in this morning's Wall Street Journal. Doar relies on a report on Medicaid in Louisiana to give us some insight.

 It studied Medicaid recipients in Louisiana and found that the overwhelming majority weren't actually eligible for assistance and would not have been receiving it if means testing meant anything at all.

The report came from Louisiana’s legislative auditor, Daryl G. Purpera, who selected 100 Medicaid recipients at random and found that than 82 of them shouldn’t have qualified for all the benefits they received.

Most were underreporting income, taking advantage of enrollment rules that allow people to join Medicaid without any verification. Ten of the randomly selected Medicaid recipients even had annual incomes above the state’s median household income.

So the taxpayer is footing the bill for people who are officially ineligible to receive benefits.

As Doar points out–and as this report makes clear–means testing has become mostly meaningless.

Administrators at the state and federal level have " consciously and significantly loosened the verification processes that once were part of enrolling applicants in SNAP, Medicaid and other programs."

Regulators, according to Doar, former commissioner of the New York City Human Resources Administration, have told states they can relax verification of eligibility. As a result, people who would once have been caught now underreport their incomes with impunity.

ObamaCare's Medicaid expansion is also a key factor in the growth of the number of people receiving assistance. It set eligibility at 138 percent of the federal poverty level and most often doesn't require verification of income claims made by the applicant.

Doar writes:

As described in a 2013 issue brief from the Centers for Medicare and Medicaid Services touting “simplified, real-time verification”: “Eligibility will be verified primarily through self-attestation.” Simplified indeed.

The architects of Medicaid expansion cleverly provided that “states have significant flexibility in determining their verification policies and procedures for Medicaid.” Of course, states have little incentive to keep people off the rolls. Under the “federal matching” framework in Medicaid, the federal government reimburses states for their health spending in a way that encourages states to spend more and care little about the cost.

And if somebody is caught underreporting income to get on Medicaid? No big deal:

If someone is found to have attested to his income inaccurately, the state can overlook the difference by deeming it to be within “reasonable” range of the limit and enrolling the person anyway. Even if the discrepancy is found not to be reasonable, states have the option to request an explanation and proceed with the enrollment.

As for SNAP verification, states and federal government can now no longer examine assets of recipients.

If an attempt to reinstitute verification were made, we'd hear cries of heartlessness.

This is the real heartlessness.

Not only is this unfair to the taxpayer, it eans that at some point resources for these programs will dry up. Those in genuine need will be the ones who suffer.