Last week we wrote about the importance of good nutrition for improving consumer outcomes and lowering the cost of care (see What Does The Farm Bill Have To Do With Health Care?). Adults who are food insecure have health insurance costs $1,863 higher than adults who have access to adequate nutrition.
Underlying this issue and the many other social determinants of health (adequate housing, transportation, education, etc.) is income. Poverty (imperfectly defined as having income below the federal poverty level) does matter when it comes to health status and health care spending. We’ve reported on the “costs” of low-income on consumers with health care before (see Poverty Really Does Matter When It Comes To Health Care Spending). And while there is plenty of research to show the effect of income on health outcomes, for care coordinators and professionals in health systems, there are limited income assistance programs to connect families and individuals.
Currently, the U.S. has two major income assistance programs that provide monthly benefits to consumers – Temporary Assistance For Needy Families (TANF) and Supplemental Security Income (SSI). Both programs provide modest cash benefits to individuals to help meet their daily needs:
- SSI provides cash benefits to aged, blind, and disabled individuals who meet income and asset requirements. SSI payments are not contingent on an individual’s work history. For 2018, the maximum SSI benefit per month is $750 for an individual and $1,125 for a couple. (For the difference between SSI and SSDI, see Helping The Consumers Who Need Income Assistance Navigate SSI & SSDI.)
- TANF provides cash and non-cash benefits to for pregnant women and families with one or more dependent children. Income requirements to receive TANF benefits vary by state, although generally cash benefits have more restrictive requirements while non-cash benefits are open to a wider range of families.
What exactly is the average benefit that individuals and families receive? Both SSI and TANF provide modest benefits to individuals, although SSI benefits are somewhat higher. The average SSI payment was $526.74 in 2016 and 8.3 million individuals received payments. The average TANF payment was $406 in 2016 and 1.2 million families received payments. For individuals receiving TANF cash benefits, where they live plays an important role. States vary widely in the amount of TANF funding they dedicate to cash payments and the amount of each benefit. For example, the average cash benefit in New York is $575 per month, while the average cash benefit is $138 per month in Mississippi.
Additionally, there are two other major income assistance programs at the federal level: Pell Grants and Earned Income Tax Credits (EITC); but both provide limited benefits. Pell Grants provide either tuition or living expenses (in the form of cash) to low-income undergraduate students. EITC provides a tax refund to low-income families and individuals. EITC is considered an income assistance program because individuals can receive a larger refund than their actual taxes paid and individuals can file a tax return (even if not required) for the express purpose of receiving the refund. About 27 million families received an EITC payment of $2,400 in 2016. With the passage of the recent tax reform bill, slight changes to the EITC tax credits go into effect in 2018. Going forward, the Internal Revenue Service (IRS) will use the chained consumer price index (CPU) to calculate the increase in the credit each year, rather than using the consumer price index. Chained CPU grows more slowly than CPU; therefore, some expect this to erode the value of the credit in future years (see 2018 EITC Income Limits, Maximum Credit Amounts and Tax Law Updates and Instead of Boosting Working-Family Tax Credit, GOP Tax Bill Erodes It Over Time).
In total, the FY2016 U.S. spending on income assistance was $185.1 billion, compared to $156.2 billion in FY2009. On an inflation-adjusted basis, this represents an increase of 6%. On a per capita basis, U.S. spending on income assistance was $5.09 per citizen in 2009 and $6 per citizen in 2016, a change of 21%.
For clinical professionals and others treating consumers, it is important to ask questions about income, access to food, living environment, etc. Then at the very least, organizations should education and refer consumers to the relevant community resources. (To find out how to connect individuals to TANF in your state, see: Help For Families. For how to connect individuals to SSI, see: Social Security Office Locator. And to connect individuals to groups that can assist with EITC preparation, see Free Tax Return Preparation for Qualifying Taxpayers.) Organizations can also provide a care coordinator or social worker who can help a consumer apply for and access these resources as applications are often long and difficult.
For more on the topic of income assistance, be sure to check out our report: U.S. Spending On Income Assistance: $189.1 Billion In FY2016. The report explains the differences between income assistance programs, spending, and enrollment trends. It also includes differences in enrollment by state, average benefit per state, and for TANF how spending is distributed among different programs in each state.
For more on helping consumers navigate the complex programs and how to connect them to social services, join me at The 2018 OPEN MINDS Strategy & Innovation Institute for the session, “The Return On Investment Of Health Homes & Medical Homes,” featuring Alyssa Brown, J.D., Deputy Director, Planning Administration, Office of Health Care Financing, Maryland Department of Health and Mental Hygiene and David Wawrzynek, MS, MBA, Chief Financial Officer, Spectrum Human Services.