Among its many tripwires and cuts to health care and food assistance, House Bill 7 (HB 7) would get rid of a highly efficient and effective policy for getting food assistance to the people who need it. Broad Based Categorical Eligibility (BBCE) streamlines application by automatically considering applicants to the Supplemental Nutrition Assistance Program (SNAP) eligible if they already meet similar eligibility requirements in other public assistance programs. It also allows Kentucky to waive a particularly burdensome asset test for all SNAP applicants which penalizes people for having modest savings or assets. Nearly all 238,000 Kentucky SNAP households were exempt from the asset test in 2019 because of BBCE, 42,000 of whom because they qualified for SNAP under the eligibility requirements of a different program like Kentucky Transitional Assistance Program (K-TAP) and Supplemental Security Income (SSI).
By eliminating BBCE, HB 7 would cause many Kentuckians to lose benefits they are eligible for while completing unnecessary, duplicative application processes through increasingly burdened administrative agencies. In particular, HB 7 jeopardizes food assistance for seniors, Kentuckians with disabilities, postsecondary graduates, households with kids and even schools and child care centers.
Seniors, people with disabilities and families saving for the future would lose food assistance
Under the SNAP asset test, Kentuckians with assets like family property, bank accounts and educational loans in repayment with a combined value over $2,500, and $3,750 for seniors and people with disabilities, are ineligible for SNAP. By waiving the SNAP asset test, BBCE allows Kentucky to instead use household gross income and standardized deductions to determine eligibility.
As such, BBCE supports work and reduces the impact of what’s commonly called the “benefits cliff.” Along with SNAP’s gradual, income-based phase-out of benefits (which decrease 24 to 36 cents for every additional dollar earned), BBCE allows participants to take on more work hours or higher paying jobs and build up some savings while still receiving food assistance. That helps underpaid workers and families trying to become financially independent avoid debt and better save for retirement, emergencies and even regular expenses like next month’s rent or child care expenses. According to the Urban Institute, families in states with Categorical Eligibility are more likely to have a bank account with over $500 to weather an unexpected financial hardship.
Eliminating BBCE would trigger the return of the asset test in the SNAP application process, taking food assistance away from Kentuckians that have modest assets. This will be particularly harmful to seniors and people with disabilities who rely on assets and retirement savings to make ends meet without income from a job. It will also be detrimental to postsecondary students whose educational loans in repayment would count toward the asset test limit. Of the 616,000 Kentuckians with outstanding student loans, those with outstanding loans in repayment over the asset limit ($2,500) would not be eligible for help with groceries regardless of need.
Children could lose free meals at school
Eliminating BBCE would also cost many Kentucky kids their free meals at school. This is because the Kentucky Department of Education (KDE) is able to avoid the cumbersome application process and income eligibility check for free school meals by considering children eligible if they are in SNAP-participating households. Removing BBCE would cost many families their food assistance, and therefore cost schools the automatic ability to provide free meals to those students. In 2019, an estimated 226,000 Kentucky kids lived in households that received food assistance through SNAP.
Fewer kids participating in free and reduced-price meals has consequences for schools known as Community Eligibility Provision (CEP) schools, where most families have low incomes and therefore all students get free meals. If enough families lose SNAP under HB 7, entire schools could lose their free meals. Additionally, fewer students participating in free and reduced-price meals will impact school funding, as well. The school funding formula, Support Educational Excellence in Kentucky (SEEK), provides additional funds (referred to as add-ons) to schools with more students participating in free and reduced-price meals.
Even with less school funding through the SEEK formula, schools would have to add capacity to administer free school meal applications in order to keep students fed — a prerequisite for educational success. In the case of CEP schools, they would have to get a sufficient number of individual applications to prove CEP status. These additional administrative burdens would fall on schools, the Cabinet for Health and Family Services (CHFS), KDE and ultimately families.
Child care centers would lose federal funding to feed kids
Fewer SNAP eligible families also means a reduction in reimbursement for free meals and snacks in child care centers, through a program known as the Child and Adult Care Food Program (CACFP). Child care centers receive significantly higher CACFP reimbursements for families with SNAP. At the current federal rate, centers are reimbursed $1 for snacks or $3.66 for lunch for children in SNAP-participating households, compared to $0.09 for snacks and $0.35 for lunch for children in households without SNAP. Under HB 7, child care centers losing this boost through CACFP would be forced to pass on costs to families or to serve less food.
Greater administrative burden will harm administration of other public services and programs
Without the simplified processes afforded under BBCE, the administrative burden of processing duplicate applications for food assistance and valuing assets under HB 7 will fall on already strained staff at CHFS, KDE and school districts. Along with the many other costly administrative barriers and reporting requirements created by HB 7, this burden will result in longer call times and slower application processes in all of the important programs and services these agencies provide.