Although substantially changed in committee last week, House Bill 7 (HB 7) still puts up numerous barriers to food and medical assistance for Kentucky families and workers. To Kentucky’s safety net, HB 7 adds a morass of new, more stringent reporting requirements and restrictive eligibility criteria, with many components running afoul of federal law, most of them infeasible, and all of them expensive to implement despite no additional funding. The bill’s byzantine, costly, disproven focus on punishing fraud — shown time and again to be extremely low among public assistance participants — will cause tens of thousands of eligible Kentuckians to lose help with the foundations of well-being and economic security, and many more to avoid seeking help in the first place.
New version of HB 7 creates multiple ways Kentuckians would lose food assistance
HB 7 creates tripwires for losing food assistance through “change reporting.”
HB 7 would make Kentucky only the second state in the nation to use “change reporting” for SNAP instead of simplified reporting. This new practice would require any change in a SNAP participant’s life to be quickly reported to the Cabinet for Health and Family Services (CHFS) within 10 days, including changes in income, work hours, savings, residency, a new household member or the loss of a family member, getting behind on child support or even a new car. The current practice simply allows SNAP participants to report any large changes that could affect their eligibility as they happen, while reporting any smaller ones during their recertification process which happens twice a year. But under HB 7, Kentuckians who make a mistake or are too slow to report life changes to CHFS could be required to repay the benefits they have received or could be accused of fraud. Because HB 7 also bans those accused of fraud from all kinds of help with groceries, cash or medical expenses for either 6 months or permanently, change reporting will punish Kentuckians who are simply busy living their lives.
In practice, change reporting would require employees that are paid hourly, in tips or with otherwise variable incomes each month of more than $100 to report those changes and provide documentation such as paystubs. For instance, restaurant workers, home health aides and retail cashiers would have to submit additional paperwork each month to continue receiving help with groceries. The additional administrative work created by “change reporting” for the Department for Community Based Services (DCBS) would also be extreme compared to current practice, slowing down the agency and making it harder for all people to get and keep all kinds of assistance they are eligible for.
HB 7 prohibits the state from giving food assistance to certain adults in economically distressed areas, even during downturns.
Non-disabled Kentucky adults who don’t have dependents can receive SNAP benefits while out of a job for only 3 months out of a 36-month period. But the federal government allows states to waive that time limit, recognizing that finding a job during a downturn or in an economically distressed county is difficult, and that SNAP can act as an economic stabilizer. The entire country waived the requirement during the Great Recession and then again during the COVID-19 downturn.
But HB 7 would take away the ability of the state to waive time limits, pushing some adults and their households deeper into food insecurity and poverty while harming local economies. During the years Kentucky was recovering from the Great Recession, these waivers expired in most counties, ultimately leading to 34,137 Kentuckians losing food assistance. That lowered the total grocery money available to others who lived in their households and pulled millions out of local economies — creating a ripple effect as $1 spent on SNAP generates nearly $2 in the broader economy. If HB 7 passes, counties in eastern Kentucky will be especially harmed by this ban, as jobs are scarce in those counties and workers there have a harder time finding work than the rest of the state. Now they will have a harder time affording food, too.
HB 7 bans the state from providing exemptions to the SNAP time limit for those in extraordinary circumstances.
For those slated to lose food assistance because of the SNAP time limit for certain jobless adults described above, the state can step in to exempt a limited number of cases when there are extraordinary circumstances. This ensures that when folks hit a bump in life outside their control, their situation isn’t exacerbated by taking away help with groceries as well.
By both banning waivers in areas that are economically distressed, and then also not allowing for individual extenuating circumstances to be considered, HB 7 creates a rigid, one-size-fits-all time limit for jobless Kentuckians seeking help with food. And just like the ban on waivers, this will not only hurt those who have their SNAP benefits revoked, but others in their household, local grocery stores and the broader economy as well.
HB 7 mandates participating in an inadequate number of Education & Training programs.
Many working adults without dependents or disabilities participate in SNAP; the abundance of poverty-wage jobs in Kentucky means they do not make enough to put food on the table. In addition to requiring them to report that work, HB 7 would require these Kentuckians, an estimated 68,000 people (including individuals without dependents or disabilities up to age 49, as well as adults up to age 59 with dependents over 5 years old) to participate in a SNAP Employment and Training program, known as SNAP E&T. Despite efforts in the past decade, E&T infrastructure is wholly inadequate, with only 1,200 available slots according to CHFS. Given the few spots open to the immense number of those who would be required to participate, many Kentuckians would have to travel a good distance to access opportunities that are few and far between across the state, even as the program lacks any kind of transportation support.
HB 7 forces child support cooperation by custodial parents.
Parents with low incomes who would struggle to keep food on the table without SNAP may also struggle to stay current on child support payments. When states punish parents for getting behind on payments by banning their participation in SNAP, both parents’ and children’s food security is diminished, with short- and long-term economic and health consequences. This harm, along with SNAP bans’ failure to increase child support payments and increased administrative costs, is why only two other states had these kinds of child support ban from SNAP as of 2018. Currently, Kentucky parents who do not have custody of their children can be banned from SNAP for getting behind on child support. An estimated 14,306 Kentuckians lost food assistance while the ban was in place from January 2019 to March 2020, and it was reestablished again last year with the passage of Senate Bill 65. HB 7 would expand the current ban to parents with children at home.
The ban is also rooted in wrong-headed stereotypes on single parenthood, and enforcing child support cooperation disrupts informal agreements, forcing families into formal arrangements in exchange for food.
HB 7 creates a dubious, permanent ban on all assistance based on fraud accusations.
HB 7 creates a two-strike ban that would keep people from participating in any public assistance program — Medicaid, SNAP, TANF and any other assistance program in Kentucky — for life for making a mistake or selling benefits from their EBT card. All of these programs are jointly run by the state and federal government and each one comes with its own federal rules for implementation. So it is not clear that the cabinet even could implement a ban across all programs without running afoul of various laws governing each program.
Federal research shows that the real fraud rate for SNAP is less than 2%. Despite that low rate, many more people are suspected of trafficking their card based on mistakes that are easy to make while using a card, such as entering in the wrong pin number too many times, shopping at the same store more than once in a day or having a purchase ending in a whole-dollar amount. These mistakes are monitored by imperfect algorithms created by the USDA and Deloitte that mark mistakes as red flags for fraud. With an algorithm’s red flag as the determining source for fraud, a new mom making a mistake while using her SNAP card, for instance, could result in her being banned for life from things like child care assistance all the way to help with medical bills through Medicaid when she is a senior.
New version of HB 7 has a tangle of barriers to help with medicine and doctor visits
HB 7 tries again to implement an illegal, ineffective and dangerous Medicaid work reporting requirement.
Unlike the original version, the new version of HB 7 requires CHFS to request an 1115 Medicaid waiver in order to implement a work reporting requirement of at least 80 hours per month for some adults. If the cabinet’s waiver is rejected, they would then need to resubmit it every 12 months in perpetuity.
This same proposal was nearly implemented in Kentucky under the Bevin administration, but was struck down by a federal judge twice before being rescinded by Governor Beshear. Similar proposals in other states have been repeatedly struck down in federal courts including a Court of Appeals decision. If it had been enacted in Kentucky, it would have led to an estimated 100,000 people losing health insurance. In Arkansas, the only state to briefly implement a work reporting requirement, thousands lost coverage in a few months, most because they did not understand the rules or how to report their work hours — not because they were not working (as most working-age adults covered by the Medicaid expansion are working). The results were disastrous with many of the 18,000 who lost Medicaid facing significant financial hardship and with no change in employment outcomes.
HB 7 still bans state-determined, temporary “presumptive eligibility” Medicaid.
During the pandemic, Kentucky (along with many other states) was given permission by the federal government to offer health coverage for up to six months to Kentuckians who recently became uninsured. In doing so, CHFS extended a lifeline to hundreds of thousands of Kentuckians, while also keeping hospitals from closing their doors. But because this coverage is temporary, in July 2021 nearly 120,000 people rolled off of it, and now very few people use it while they apply for full Medicaid or seek coverage elsewhere.
Banning the state from being able to provide presumptive eligibility Medicaid means that when the next economic downturn hits and tens or hundreds of thousands of Kentuckians lose their health coverage as they are laid off from work, Kentucky will have no tools to quickly offer health insurance. Kentuckians will be forced to pay for the full cost of medicine out of pocket or forego seeing their doctor, and hospitals will face hobbling levels of uncompensated care — particularly rural hospitals.
HB 7 sets up income verification tripwires to losing Medicaid.
HB 7 sets up a more frequent, quarterly review of various databases that keep information related to Medicaid eligibility, including income, and it requires that the most recent income data available is used for Medicaid eligibility purposes (instead of an average income over a period of time, or a “look-back period.”) These will increase administrative burden, as well as churn and disenrollment from Medicaid.
But by using the latest income data available instead of a look-back period, the cabinet would exclude from eligibility people with irregular incomes. Farmers and independent contractors, for example, are often paid in irregular, large lump sums, but earn below the income eligibility limit over a year. If they apply for Medicaid shortly after being paid, they may be found ineligible because they appear to have too much income. Having this process occur on a quarterly basis will create significant churn in Medicaid participation, and make it nearly impossible for impacted workers to receive continuity of care.
Further, it’s already the case that changes to Medicaid participants’ income often trigger a request for information from the cabinet. If a participant doesn’t give the state the information they asked for within a 30-day time limit, the Medicaid enrollee loses coverage. In fact, failure to return paperwork on time was the most frequent reason why Medicaid enrollees lost coverage before the special COVID-era protections went into place in April 2020 (not reasons related to eligibility). Under HB 7, increasing the frequency of paperwork requirements to a quarterly basis will escalate paperwork-based Medicaid disenrollment.
Some harmful provisions were removed, but there’s still enough to throw hundreds of thousands off food and Medical Assistance
In committee, the elimination of Broad Based Categorical Eligibility (BBCE) was removed from the bill. This is an improvement for families with children trying to save for the future, as well as seniors and people with disabilities that rely on savings and assets. Other harmful provisions like a rapid and reckless removal of pandemic-era Medicaid protections and penalties for hospitals providing a temporary form of Medicaid were removed from the bill.
But many measures still in HB 7 — and the new provision forcing the cabinet to request an illegal work requirement — will harm Kentuckians who use Medicaid for their health coverage. Many measures still included — such as change reporting, limitations on time limit waivers, mandatory education and training and child support cooperation requirements — will take food assistance from Kentuckians who need it. Under HB 7, parents with varying work hours, those living in economically distressed counties and those who determine it in the best interests of their families not to start or enforce an order with child support, will still lose the help with groceries that they and their children need. Schools’ automatic eligibility for free school meals and child care meal reimbursements will be put at risk.
If HB 7 is passed, Kentuckians will get caught up in an administrative maze of paperwork and eligibility requirements. Many who are working multiple jobs and providing care to loved ones in challenging contexts will simply turn away before even starting in order to preserve their time and mental well-being. The Senate should protect their constituents by rejecting this complex, expensive and harmful legislation.