The data on the effects of poverty on health status and life expectancy is striking – a point made by my colleague Monica E Oss yesterday in the article, Poverty Really Does Matter When It Comes To Health Care Spending). The studies she cited were just a few of the many examples of how social determinants of health (including safe housing, food security, and education) affect the use of health care resources and health outcomes. For example, we have recently covered a number of studies tying income levels to readmission rates – see Socioeconomic Status & Readmissions: Evidence From An Urban Teaching Hospital and Risk Adjusting For Social Determinants Of Health Alters Readmission Rates At Children’s Hospitals.
This begs the question, when it comes to the issue of poverty, what can be done at an individual consumer level? The answer for provider organizations and care coordinators comes down to understanding what social services are available. There are three main categories of services – housing (which I discussed in A Question Of Permanent Supportive Housing); nutrition assistance programs (which I focused on last week in Helping Consumers With Food Insecurity: What Services Are Available?); and income assistance programs.
With regard to the latter, there are four main types of income assistance programs – Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI) (however individuals must be aged, blind, or disabled to receive this benefit); earned income tax credits (which require individuals to make enough money to file a tax return), and Pell Grants (cash or tuition assistance to students attending secondary schools). For most non-disabled consumers with children, TANF is the only income assistance resource.
The TANF program provides cash and non-cash benefits to mostly able-bodied families in need of income assistance. Total spending on TANF in FY2014 was $29.3 billion. Of that total, $12.8 billion was state funds and $16.5 billion was federal funds. When the TANF program was implemented in 1997, federal spending was set at $16.5 billion with no provisions for inflation. As a result, the purchasing power of the federal block grant has decreased by one-fourth to one-third over the past 20 years (see Temporary Assistance for Needy Families: Spending and Policy Options and Policy Basics: An Introduction to TANF).
Although TANF provides a wide range of benefits (including transportation, state earned income tax credits, non-recurrent short-term benefits, contributions to individual development accounts, and programs to prevent out-of-wedlock pregnancies), there are three main types of benefits available to consumers – cash assistance, child care, and work-related supports
Cash Assistance – This assistance is available for up to 60 months over an individual’s lifetime and provided in the form of vouchers or electronic benefit transfers. These funds can be used for nearly any purchase of food, services, or goods. As a condition of receiving cash benefits, one-parent families must work or participate in work-related activities 30 hours a week. Two-parent families must work or participate in work-related activities 35 hours a week. In FY2014, the average TANF benefit was $389 per month per family, which was provided to over 1.5 million families (see Characteristics and Financial Circumstances of TANF Recipients, Fiscal Year 2014). To put that number in context, the federal poverty level in the U.S. is about $1,680 per month ($20,160 a year) for a family of three.
Child Care – TANF programs provide subsidized child care to individuals who are receiving cash assistance, as well as individuals whose income is too high to receive cash assistance. The child care benefit is usually provided one of two ways. First, an individual chooses a child care provider, and then the TANF programs pays the child care provider directly. Depending on a family’s income, they may be required to pay “copayments” to the child care provider as well. Second, the TANF program refers individuals to the child care program funded with child care block grant dollars and/or a TANF funding pass-through.
Work-Related Support Services – In order to receive cash benefits, individuals must meet work requirements. To facilitate that, one of the major benefits provided through the TANF program is services and supports that will help an individual gain employment. These activities include job skills training, job readiness activities, and job search activities among others. Typically, to receive these benefits, an individual’s TANF caseworker will connect them to work-related programs and activities in the community.
Perhaps the most difficult part of the TANF program is determining whether a consumer is actually eligible for the program. States are allowed to set their own eligibility requirements and formulas for computing a person’s benefits. In general, cash benefits are only provided to individuals with the lowest incomes, while non-cash benefits may be provided to a wide range of families. For a family of three that consists of one adult and two children (a typical TANF family), the eligibility threshold for cash benefits is a maximum income of, between $270 to $1,700, although most states set income requirements somewhere between this amount and the federal poverty level. And while the average benefit is $389 per month, this varies from between $140 to $573.
With the move to more “outcomes-based” arrangements in health and human services – and better analytics looking at the relationship of poverty and spending – these issues will get more attention. To learn more about the TANF program and the benefits it provides, be sure to check out: What Income Assistance Is Available To Consumers Through TANF & How Does It Vary By State?: An OPEN MINDS Market Intelligence Report. The report answers a number of questions including:
- What Is The TANF Program & How Was It Designed To Address The Issue Of Poverty?
- What Benefits Are Provided Through TANF?
- What Is The Average Benefit Available To Consumers & How Does It Vary By State?
- How Many Families Receive Cash Benefits?
- What Is The Application Process For TANF & Where Do Consumers Apply In Each State?
- How Much Did Each State Spend On TANF In FY2014?