Section 18. Description of Other Major Federal Assistance Programs Not Within the Jurisdiction of the Committee on Ways and Means Several Federal programs outside of the jurisdiction of the Committee on Ways and Means provide benefits to some share of those people who also benefit from assistance programs that are within the jurisdiction of the committee. This appendix describes several such programs: food stamps; Medicaid; housing assistance; school lunch and breakfast programs; the supplemental food program for Women, Infants, and Children (WIC); assistance provided under the Job Training Partnership Act; Head Start; the Low-Income Home Energy Assistance Program (LIHEAP); Veterans' Benefits and Services Programs; and Workers' Compensation programs. Most families receiving AFDC would have incomes low enough to qualify them--or particular members of their families--for assistance under these programs. Unlike the principal assistance programs under the jurisdiction of the Committee on Ways and Means, participation in Head Start, LIHEAP, and other programs are limited either by appropriations, or, in the case of the school feeding programs, by the willingness of schools to participate. Income received from AFDC is counted in determining eligibility for these programs--as well as benefit levels, in some cases. However, because these programs provide in-kind rather than cash assistance, benefits received under these programs are not counted in determining eligibility for AFDC. Tables 18-1 and 18-2 describe the overlap in recipients between programs within the jurisdiction of the Committee on Ways and Means and other major Federal assistance programs. Table 18-1 illustrates that 86.2 percent of AFDC recipient households received food stamps some time during the first quarter of 1992; 21.5 percent received WIC; 96.2 percent received Medicaid, 55.5 percent received free or reduced-price school meals; and 29.5 percent received housing assistance of some form. Table 18-2 illustrates the reverse. For example, 47.5 percent of food stamp households received AFDC benefits at some time during the first quarter of 1992; 24.8 percent of food stamp households received SSI; and 6.4 percent of food stamp households received unemployment compensation benefits. TABLE 18-1.--PERCENT OF RECIPIENTS IN PROGRAMS WITHIN THE JURISDICTION OF THE COMMITTEE ON WAYS AND MEANS RECEIVING ASSISTANCE FROM OTHER MAJOR FEDERAL ASSISTANCE PROGRAMS [Households, first quarter of 1992] ---------------------------------------------------------------------------------------------------------------- Social Unemployment AFDC SSI Security compensation Medicare ---------------------------------------------------------------------------------------------------------------- Number of households receiving benefits (in thousands).... 4,057 3,957 26,688 4,502 24,084 Percent receiving: Food stamps............................................. 86.2 46.2 7.3 10.4 6.6 WIC..................................................... 21.5 4.3 0.8 4.0 0.7 Free or reduced-price school meals...................... 55.5 18.2 3.7 12.7 2.4 Public or subsidized rental housing..................... 29.5 23.8 7.5 3.9 7.8 Medicaid................................................ 96.2 99.8 13.8 14.2 14.0 VA compensation or pensions............................. 1.9 4.0 6.5 2.2 6.9 ---------------------------------------------------------------------------------------------------------------- Note: Table reads that 86.2 percent of AFDC households, also receive food stamps. The 994,000 SSI recepients living in California receive a higher SSI payment in lieu of food stamps, and thus are not included in the food stamp percentages. Source: U.S. Bureau of the Census, Survey of Income and Program Participation. TABLE 18-2.--PERCENT OF RECIPIENTS IN OTHER MAJOR FEDERAL ASSISTANCE PROGRAMS RECEIVING ASSISTANCE UNDER PROGRAMS WITHIN THE JURISDICTION OF THE COMMITTEE ON WAYS AND MEANS [Households, first quarter of 1992] ---------------------------------------------------------------------------------------------------------------- Free or Public or Food reduced subsidized VA stamps WIC school rental Medicaid compensation meals housing or pensions ---------------------------------------------------------------------------------------------------------------- Number of households receiving benefits (in thousands)....................................... 7,358 2,500 7,982 4,871 10,533 2,699 Percent receiving: AFDC............................................ 47.5 34.8 28.2 24.6 37.0 2.8 SSI............................................. 24.8 6.8 9.0 19.3 37.5 5.9 Social Security................................. 26.4 8.8 12.5 40.9 34.9 64.6 Unemployment compensation....................... 6.4 7.2 7.2 3.6 6.1 3.7 Medicare........................................ 21.5 6.3 7.1 38.7 32 61.8 ---------------------------------------------------------------------------------------------------------------- Note: Table reads that 47.5 percent of food stamp recipient households receive AFDC. The 994,000 SSI recepients living in California receive a higher SSI payment in lieu of food stamps, and thus are not included in the food stamp percentages. Source: U.S. Bureau of the Census, Survey of Income and Program Participation. Table 18-3 illustrates the percentage of households receiving AFDC or SSI and also receiving assistance from other programs for selected time periods. This table is constructed from table 18-1 in previous editions of this document. As shown in table 18-3, the number of households receiving AFDC and SSI benefits in the first quarter of 1991 has increased significantly in comparison to earlier years. In the first quarter of 1992, the number of households receiving SSI benefits had another significant increase, while the number of AFDC households stayed relatively constant. The percentage of households receiving other benefits has fluctuated over the period. For most types of benefits, there is no discernible pattern, and the percentage has remained consistently the same. The one exception to this general rule is the percentage of AFDC households also receiving public or subsidized rental housing. Between the second quarter of 1987 and the first quarter of 1990, the percentage of AFDC households receiving housing benefits increased from 19.4 percent to 34.7 percent. The percentage had dropped down again slightly by the first quarter of 1992. TABLE 18-3.--PERCENT OF HOUSEHOLDS RECEIVING AFDC OR SSI AND ALSO RECEIVING ASSISTANCE FROM OTHER PROGRAMS FOR SELECTED TIME PERIODS ---------------------------------------------------------------------------------------------------------------- 1984 1986 1987 1988 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- Quarter 4 1 2 4 1 1 1 AFDC: Number of households receiving benefits (in thousands)......................................... 3,585 3,617 3,527 3,329 3,434 4,051 4,057 Percent receiving: Food Stamps..................................... 81.4 80.3 81.7 84.6 82.7 84.6 86.2 WIC............................................. 15.3 15.1 18.6 19.1 18.7 16.3 21.5 Free or reduced-price school meals.............. 49.2 50.5 55.6 52.5 52.7 52.2 55.5 Public or subsidized rental housing............. 23.0 24.8 19.4 31.3 34.7 31.5 29.5 Medicaid........................................ 93.2 95.2 95.5 95.6 97.6 96.9 96.2 VA compensation or pensions..................... 2.8 1.7 1.9 .9 1.3 2.4 1.9 SSI: Number of households receiving benefits (in thousands)......................................... 3,008 3,110 3,341 3,186 3,037 3,593 3,957 Percent receiving: Food Stamps..................................... 46.5 44.7 39.7 42.2 41.3 44.3 46.2 WIC............................................. 2.5 2.7 2.5 2.5 3.0 2.2 4.3 Free or reduced-price school meals.............. 12.7 14.7 11.9 15.5 15.3 17.5 18.2 Public or subsidized rental housing............. 21.6 20.7 20.0 22.2 21.4 24.9 23.8 Medicaid........................................ 100.0 100.0 99.6 99.6 99.7 99.6 99.8 VA compensation or pensions..................... 4.7 5.2 7.7 6.1 5.7 3.1 4.0 ---------------------------------------------------------------------------------------------------------------- Note: The 994,000 SSI recepients living in California receive a higher SSI payment in lieu of food stamps, and thus are not included in the food stamp percentages. FOOD STAMP PROGRAM Food stamps are designed primarily to increase the food purchasing power of eligible low-income households to a point where they can buy a nutritionally adequate low-cost diet. Participating households are expected to be able to devote 30 percent of their counted monthly cash income to food purchases.\1\ Food stamp benefits then make up the difference between the household's expected contribution to its food costs and an amount judged to be sufficient to buy an adequate low- cost diet. This amount, the maximum food stamp benefit level, is derived from the U.S. Department of Agriculture's lowest- cost food plan (the Thrifty Food Plan), varied by household size, and adjusted annually for inflation. Thus, a participating household with no counted cash income receives the maximum monthly allotment for its household size, intended to enable it to purchase an adequate low-cost diet with its food stamps alone, while one with some counted income receives a lesser allotment, normally reduced from the maximum at the rate of 30 cents for each dollar of counted income and intended to enable it to purchase an adequate low-cost diet with a combination of food stamps and its own cash. --------------------------------------------------------------------------- \1\Because not all of a household's income is actually counted when determining its food stamp benefits, the program, in effect, assumes that most participants are able to spend about 20 percent of their total cash monthly income on food. --------------------------------------------------------------------------- Benefits are available to nearly all households that meet Federal eligibility tests for limited monthly income and liquid assets, as long as certain household members fulfill work registration and employment and training program requirements. In addition, recipients in the two primary Federal/State cash welfare programs, the AFDC and SSI programs, generally are automatically eligible for food stamps, as are recipients of State general assistance payments, if the household is composed entirely of AFDC, SSI, or general assistance beneficiaries.\2\ --------------------------------------------------------------------------- \2\Except for SSI recipients in California, where a State-financed adjustment to SSI benefits has replaced food stamp assistance, and general assistance programs that do not meet certain Federal standards. --------------------------------------------------------------------------- ADMINISTRATION, PROGRAM VARIATIONS, AND FUNDING The regular Food Stamp program operates in all 50 States, the District of Columbia, Guam, and the Virgin Islands. The Federal Government is responsible for virtually all of the rules that govern the program and, with limited variations for Alaska, Hawaii, and the territories, these rules are nationally uniform. States, the District of Columbia, and the territories may choose to offer the program or not. However, if they do offer food stamp assistance, it must be made available throughout the jurisdiction and comply with Federal rules. Sales taxes on food stamp purchases may not be charged, and food stamp benefits do not affect other assistance available to low-income households, nor are they taxed as income. Alternative programs are offered in Puerto Rico and the Northern Mariana Islands, and program variations occur in a number of demonstration projects and in those jurisdictions that have elected to exercise the limited number of program options allowed. Funding is overwhelmingly Federal, although the States and other jurisdictions have financial responsibility for significant administrative costs, as well as liability for erroneous benefit determinations (as assessed under the food stamp ``quality control'' system). Federal administrative responsibilities At the Federal level, the program is administered by the Agriculture Department's Food and Nutrition Service (FNS). The FNS gives direction to welfare agencies through Federal regulations that define eligibility requirements, benefit levels, and administrative rules. It is also responsible for (1) printing food stamp coupons and distributing them to welfare agencies and (2) approving, and overseeing participation by retail food stores and other outlets that may accept food stamps. Other Federal agencies that have administrative roles to play include: the Federal Reserve System (through which food stamps are redeemed for cash, and which has some jurisdiction over ``electronic benefit transfer'' methods for issuing food stamp benefits), the Social Security Administration (responsible for the social security numbers recipients must have, provision of limited application ``intake'' services, and providing information to verify recipients' income), the Internal Revenue Service (providing assistance in verifying recipients' income and assets), and the Immigration and Naturalization Service (helping welfare offices confirm alien applicants' status). State and local administrative responsibilities States, the District of Columbia, Guam, and the Virgin Islands, through their local welfare offices, have primary responsibility for the day-to-day administration of the Food Stamp program. They determine eligibility, calculate benefits, and issue food stamp allotments following Federal rules. They also have a significant say about carrying out employment and training programs and some administrative features of the program (e.g., the extent to which verification of household circumstances is pursued, the method by which food stamps are issued). Most often, the Food Stamp program is operated through the same welfare agency and staff that runs the Federal/State AFDC and Medicaid programs. Puerto Rico and the Northern Mariana Islands In addition to the regular Food Stamp program, the Food Stamp Act directs funding for a nutrition assistance program in the Commonwealth of Puerto Rico. Separate legislation authorizes a variant of the Food Stamp program in the Commonwealth of the Northern Mariana Islands. Since July 1982, Puerto Rico has operated a nutrition assistance program of its own design, funded by an annual Federal ``block grant.''\3\ The Commonwealth's nutrition assistance program differs from the regular Food Stamp program primarily in that: (1) funding is limited to an annual amount specified by law;\4\ (2) the Food Stamp Act allows the Commonwealth a great deal of flexibility in program design, as opposed to the regular program's extensive Federal rules; (3) benefits are paid in cash (checks) rather than food stamp coupons; (4) income and liquid assets eligibility limits are about half those used in the regular Food Stamp program; (5) maximum benefit levels are about one-quarter less than in the 48 contiguous States and the District of Columbia; and (6) different rules are used in counting income for eligibility and benefit purposes. In fiscal year 1993, Puerto Rico's nutrition assistance program aided approximately 1.44 million persons each month with monthly benefits averaging $58 a person. --------------------------------------------------------------------------- \3\Prior to July 1982, the regular Food Stamp program operated in Puerto Rico, although with slightly different eligibility and benefit rules. \4\For fiscal year 1993, $1.051 billion was earmarked; approximately $30 million of this amount was used to fund 2 special projects--a cattle tick eradication program and a wage-subsidy program. The block grant funds the full cost of benefits and half the cost of administration. --------------------------------------------------------------------------- Under the terms of the 1976 Covenant with the Commonwealth of the Northern Mariana Islands and implementing legislation (P.L. 96-597), a variant of the Food Stamp program was negotiated with the Commonwealth and began operations in July 1982. The program in the Northern Marianas differs primarily in that: (1) it is funded entirely by Federal money, up to a maximum grant of $3.7 million a year; (2) a portion of each household's food stamp benefit must be used to purchase locally produced food; (3) maximum allotments are about 20 percent higher than in the 48 contiguous States and the District of Columbia; and (4) income eligibility limits are about half those in the regular program. In fiscal year 1993, the Northern Marianas' program assisted some 2,900 people each month with monthly benefits averaging $72 a person. Program options The Food Stamp Act authorizes demonstration projects to test program variations that might improve operations.\5\ In addition, States are allowed to implement a few optional aspects of the Food Stamp program. States may require ``monthly reporting'' and ``retrospective budgeting'' for parts of their food stamp caseload. They may disregard the first $50 a month in child support payments, if they pay the benefit cost of doing so. States or localities may choose to run ``workfare'' programs, and State welfare agencies exercise primary responsibility in the design of food stamp employment and training programs. And States can operate ``outreach'' programs, with Federal cost-sharing, to inform low-income persons about food stamps. --------------------------------------------------------------------------- \5\At present, eight types of demonstration projects are underway: (1) ``cashout'' projects for the elderly and SSI recipients, (2) ``electronic benefit transfer'' projects testing alternative methods of benefit delivery, (3) projects providing cash benefits to very poor households who are eligible for expedited service, (4) projects testing simplified AFDC/FS application and benefit determination procedures, (5) ``welfare reform'' demonstrations testing various combinations of standardized AFDC/FS rules, cashing out food stamp benefits, and merging AFDC/FS rules and benefits, (6) a project granting quarterly (instead of monthly) benefit payments to SSI recipients eligible for very small benefits, (7) demonstrations conforming the operations of the AFDC JOBS program and the food stamp program's employment and training activities, and (8) awards to nonprofit organizations to test ways to improve program responsiveness to specific target groups in the low-income population. --------------------------------------------------------------------------- Funding The Food Stamp Act provides 100 percent Federal funding of food stamp benefits. The Federal Government is also responsible for its own administrative costs: overseeing program operations (including oversight of participating food establishments), printing and distributing food stamp coupons to welfare agencies, redeeming food stamp coupons through the Federal Reserve, and payments to the Social Security Administration for certain intake services. In most instances, the Federal Government provides half the cost of State welfare agency administration, including the cost of optional outreach activities.\6\ The 50-percent Federal share can be increased to as much as 60 percent where the State has a very low rate of erroneous benefit determinations. And, the cost of carrying out employment and training programs for food stamp recipients is shared in two ways: (1) each State receives a Federal grant for basic operating costs (a formula share of $75 million a year) and (2) additional operating costs, as well as expenses for support services to participants (e.g., transportation, child care) are eligible for a 50- percent Federal match.\7\ Finally, States are allowed to retain a portion of improperly issued benefits that they recover (other than those caused by welfare agency error): 25 percent of recoveries in fraud cases and 10 percent in other circumstances. --------------------------------------------------------------------------- \6\Until April 1994, the cost of certain activities was matched at more than the 50-percent rate: costs associated with the development of computer capability and fraud control activities were eligible for 63 and 75 percent Federal sharing, respectively; costs for implementing the Systematic Alien Verification for Entitlements (SAVE) program were fully reimbursed by the Federal Government. \7\The Federal 50-percent share for support services is limited. Coverage extends to (1) dependent care costs up to $160 per dependent per month and (2) other expenses (e.g., transportation) up to $25 per participant per month. Beginning in September 1994, States will be allowed to set their own limits on dependent care costs eligible for Federal matching, so long as they are not higher than local market rates. TABLE 18-4.--RECENT FOOD STAMP ACT EXPENDITURES [In millions of dollars] ------------------------------------------------------------------------ Administration\1\ -------------------- Fiscal year Benefits\2\ State Total (Federal) Federal and local ------------------------------------------------------------------------ 1979......................... 6,480 515 388 7,383 1980......................... 8,685 503 375 9,563 1981......................... 10,630 678 504 11,812 1982......................... 10,408 709 557 11,674 1983......................... 11,955 778 612 13,345 1984......................... 11,499 971 805 13,275 1985......................... 11,556 1,043 871 13,470 1986......................... 11,415 1,113 935 13,463 1987......................... 11,344 1,195 996 13,535 1988......................... 11,999 1,290 1,080 14,369 1989......................... 12,483 1,332 1,101 14,916 1990......................... 15,090 1,422 1,174 17,686 1991......................... 18,249 1,516 1,247 21,012 1992......................... 21,883 1,656 1,375 24,914 1993......................... 23,032 1,774 1,498 26,304 ------------------------------------------------------------------------ \1\All Federal administrative costs associated with the Food Stamp program and Puerto Rico's block grant are included: Federal matching for the various administrative and employment and training expenses of States and other jurisdictions, and direct Federal administrative costs. Figures for Federal administrative costs beginning with fiscal year 1989 include only those paid out of food stamp appropriation and the food stamp portion of the general appropriation for food program administration. Figures for earlier years include estimates of food stamp related Federal administrative expenses paid out of other Agriculture Department accounts. State and local costs are estimated based on the known Federal shares and represent an estimate of all administrative expenses of participating States and other jurisdictions (including Puerto Rico). \2\All benefit costs associated with the Food Stamp program and Puerto Rico's block grant are included. The benefit amounts shown in the table reflect small downward adjustments for overpayments collected from recipients and, beginning in 1989, issued but unredeemed benefits. Over time, the figures reflect both changes in benefit levels and numbers of recipients. Source: Budget documents prepared by the FNS. Compiled by the Congressional Research Service. ELIGIBILITY The Food Stamp program has financial, employment/training- related, and ``categorical'' tests for eligibility. Its financial tests require that most of those eligible have monthly income and liquid assets below limits set by food stamp law. Under the employment/training-related tests, certain household members must register for work, accept suitable job offers, and fulfill work or training requirements (such as looking or training for a job) established by State welfare agencies. The limited number of categorical eligibility rules make some automatically eligible for food stamps (most AFDC, SSI, and general assistance recipients), and categorically deny eligibility to others (e.g., strikers, illegal and temporarily resident aliens, those living in institutional settings). Applications cannot be denied because of the length of a household's residence in a welfare agency's jurisdiction or because it has no fixed mailing address or does not reside in a permanent dwelling. The food stamp household The basic food stamp beneficiary unit is the ``household.'' A food stamp household can be either a person living alone or a group of individuals living together; there is no requirement for cooking facilities. It is unrelated to recipient units in other welfare programs (e.g., AFDC families with dependent children, elderly or disabled individuals and couples in the SSI program). Generally speaking, individuals living together constitute a single food stamp household, if they customarily purchase food and prepare meals in common. Members of the same household must apply together, and their income, expenses, and assets normally are aggregated in determining food stamp eligibility and benefits. However, persons who live together can sometimes be considered separate households for food stamp purposes, some related co-residents are required to apply together, and special rules apply to those living together in institutional settings. Most often, persons living together receive larger aggregate benefits if they are treated as more than one food stamp household. In determining whether co-residents are treated as separate households, the following rules are applied. Unrelated co-residents may apply and be treated as separate households if they purchase food and prepare meals separately (this includes roomers and live-in attendants). As with unrelated persons, elderly or disabled adults (together with their spouses)\8\ and parents of minor children (together with their children) may apply and be treated separately from any other related co-residents, if they purchase food and prepare meals separately. Moreover, elderly persons who live with others and cannot purchase food and prepare meals separately because of a substantial disability may apply and be treated separately from their co-residents, as long as their co-residents' income is below prescribed limits. --------------------------------------------------------------------------- \8\In the Food Stamp program, ``elderly'' persons are those age 60 or older. The ``disabled'' generally are beneficiaries of governmental disability-based assistance (e.g., social security or SSI disability recipients, disabled veterans, certain disability retirement annuitants, recipients of disability-based Medicaid or general assistance). --------------------------------------------------------------------------- On the other hand, separate household treatment is barred for certain related co-residents, regardless of how food is purchased and meals are prepared: --Co-resident spouses may not apply and be treated separately; --Children under 18 and their co-resident parent(s) or caretaker(s) may not apply and be treated separately, although persons caring for foster children may opt to exclude the child(ren) from their household unit, and categorically ineligible parents (e.g., certain aliens) may apply on behalf of their otherwise eligible children; --Except for the elderly, disabled, and parents with minor children, closely related adult co-residents (i.e., parents and their adult children, brothers and sisters) may not apply and be treated separately. Effective September 1994, the definition of a food stamp household is revised to provide that persons who live together, but purchase food and prepare meals separately, may apply separately, except for: (1) spouses, (2) parents and their children (21 years or younger), other than children who themselves have a spouse or children, and (3) minors 18 years or younger (excluding foster children) who live under the parental control of a caretaker. Finally, although those living in institutional settings generally are barred from food stamps, individuals in certain types of group living arrangements may be eligible and are automatically treated as separate households, regardless of how food is purchased and meals are prepared. These arrangements must be approved by State or local agencies and include: residential drug addict or alcoholic treatment programs, small group homes for the disabled, shelters for battered women and children, and shelters for the homeless. Thus, different food stamp households can live together, food stamp recipients can reside with nonrecipients, and food stamp households themselves may be ``mixed'' (include recipients and nonrecipients of other welfare benefits). Income eligibility Except for households composed entirely of AFDC, SSI, or general assistance recipients (who generally are automatically eligible for food stamps), monthly cash income is the primary food stamp eligibility determinant.\9\ --------------------------------------------------------------------------- \9\Although they do not have to meet food stamp income and assets tests, AFDC, SSI, and general assistance households must still have their income calculated under food stamp rules to determine their food stamp benefits. --------------------------------------------------------------------------- In establishing eligibility for households without an elderly or disabled member, the Food Stamp program uses both the household's basic (or ``gross'') monthly income and its counted (or ``net'') monthly income. When judging eligibility for households with elderly or disabled members, only the household's counted monthly income is considered; in effect, this applies a more liberal income test to elderly and disabled households. Basic (or gross) monthly income includes all of a household's cash income, only excepting the following ``exclusions'' (disregards): (1) most payments made to third parties (rather than directly to the household);\10\ (2) unanticipated, irregular, or infrequent income, up to $30 a quarter; (3) loans (deferred repayment student loans are treated as student aid, see below); (4) income received for the care of someone outside the household; (5) nonrecurring lump- sum payments such as income tax refunds and retroactive lump- sum social security payments (these are instead counted as liquid assets); (6) energy assistance; (7) expense reimbursements that are not a ``gain or benefit'' to the household; (8) income earned by schoolchildren; (9) the cost of producing self-employment income; (10) Federal postsecondary student aid (e.g., Pell grants, student loans)\11\ (11) advance payments of Federal earned income tax credits; (12) ``on-the- job'' training earnings of dependent children under 19 in Job Training Partnership Act (JTPA) programs, as well as JTPA monthly ``allowances;'' (13) income set aside by disabled SSI recipients under an approved ``plan to achieve self- sufficiency'' (PASS); and (14) payments required to be disregarded by provisions of Federal law outside the Food Stamp Act (e.g., various payments under laws relating to Indians, payments under the Older Americans Act employment program for the elderly). --------------------------------------------------------------------------- \10\Some third-party (``vendor'') payments for normal living expenses are not disregarded. \11\Postsecondary student aid other than Federal aid is disregarded to the extent that it is used or earmarked for tuition, mandatory school fees or expenses, loan origination fees, and miscellaneous education-related expenses. --------------------------------------------------------------------------- Counted (or net) monthly income is computed by subtracting certain ``deductions'' from a household's basic (or gross) monthly income. It recognizes that not all of a household's income is equally available for food purchases by disregarding a standard portion of income, plus amounts representing work expenses or excessively high non-food living expenses. For households without an elderly or disabled member, counted monthly income equals their basic (gross) monthly income less the following deductions: --an inflation-indexed (each October) ``standard deduction'' set at $131 a month in fiscal year 1994, regardless of household size;\12\ --------------------------------------------------------------------------- \12\Different standard deductions are used for Alaska ($223), Hawaii ($185), Guam ($262), and the Virgin Islands ($115). --------------------------------------------------------------------------- --20 percent of any earned income, in recognition of taxes and work expenses; --out-of-pocket dependent care expenses, when related to work or training, up to $160 a month per dependent, rising to $200 a month for children under age 2 and $175 a month for other dependents in September 1994; and --any shelter expenses, to the extent they exceed 50 percent of counted income after all other deductions, up to a periodically adjusted ceiling standing at $207 a month from October 1993 through June 1994, and rising to $231 in July 1994.\13\ --------------------------------------------------------------------------- \13\Different ceilings prevail in Alaska, Hawaii, Guam, and the Virgin Islands. Through June 1994, they are $359, $295, $251, and $152; in July 1994, they will rise to $402, $330, $280, and $171. --------------------------------------------------------------------------- For households with an elderly or disabled member, counted monthly income equals their basic (gross) monthly income less the following deductions: --the same standard, earned income, and dependent care deductions noted above; --any shelter expenses, to the extent they exceed 50 percent of counted income after all other deductions, with no limit; and --any out-of-pocket medical expenses (other than those for special diets) that are incurred by an elderly or disabled household member, to the extent they exceed a ``threshold'' of $35 a month. Finally, during fiscal year 1995, States will implement a newly enacted additional deduction: households will be allowed to deduct any amounts paid as legally obligated child support. Except for those households comprised entirely of AFDC, SSI, or general assistance recipients, in which case food stamp eligibility generally is automatic, all households must have counted (net) monthly income that does not exceed the Federal poverty guidelines, as adjusted for inflation each October. Households without an elderly or disabled member also must have basic (gross) monthly income that does not exceed 130 percent of the inflation-adjusted Federal poverty guidelines. Both these income eligibility limits are uniform for the 48 contiguous States, the District of Columbia, Guam, and the Virgin Islands; somewhat higher limits (based on higher poverty guidelines) are applied in Alaska and Hawaii. TABLE 18-5.--COUNTED (NET) AND BASIC (GROSS) MONTHLY INCOME ELIGIBILITY LIMITS [Effective October 1993 through September 1994] ------------------------------------------------------------------------ 48 States, Household size D.C., and the Alaska Hawaii territories ------------------------------------------------------------------------ COUNTED (NET) MONTHLY INCOME ELIGIBILITY LIMITS\1\ ------------------------------------------------------------------------ 1 person..................... $581 $725 $670 2 persons.................... 786 982 905 3 persons.................... 991 1,239 1,140 4 persons.................... 1,196 1,495 1,375 5 persons.................... 1,401 1,752 1,610 6 persons.................... 1,606 2,009 1,845 7 persons.................... 1,811 2,265 2,080 8 persons.................... 2,016 2,522 2,315 Each additional person....... +205 +257 +235 ------------------------------------------------------------------------ BASIC (GROSS) MONTHLY INCOME ELIGIBILITY LIMITS\2\ ------------------------------------------------------------------------ 1 person..................... $756 $943 $871 2 persons.................... 1,022 1,277 1,177 3 persons.................... 1,289 1,610 1,482 4 persons.................... 1,555 1,944 1,788 5 persons.................... 1,822 2,278 2,093 6 persons.................... 2,088 2,611 2,399 7 persons.................... 2,355 2,945 2,704 8 persons.................... 2,621 3,279 3,010 Each additional person....... +267 +334 +306 ------------------------------------------------------------------------ \1\Set at the applicable Federal poverty guidelines, updated for inflation through calendar 1992. \2\Set at 130 percent of the applicable Federal poverty guidelines, updated for inflation through calendar 1992. Allowable assets Except for those households who are automatically eligible for food stamps because they are composed entirely of AFDC, SSI, or general assistance recipients, eligible households must have counted ``liquid'' assets that do not exceed federally prescribed limits. Households without an elderly member cannot have counted liquid assets above $2,000. Households with an elderly member cannot have counted liquid assets above $3,000. Counted liquid assets include cash on hand, checking and savings accounts, savings certificates, stocks and bonds, individual retirement accounts (IRAs) and ``Keogh'' plans (less any early withdrawal penalties), and nonrecurring lump-sum payments such as insurance settlements. Certain ``less liquid'' assets are also counted: a portion of the value of vehicles (generally, the ``fair market value'' in excess of $4,500) and the equity value of property not producing income consistent with its value (e.g., recreational property). Counted assets do not include the value of the household's residence (home and surrounding property), business assets, personal property (household goods and personal effects), lump- sum earned income tax credit payments, burial plots, the cash value of life insurance policies and pension plans (other than Keogh plans and IRAs), and certain other resources whose value is not accessible to the household or are required to be disregarded by other Federal laws. Work registration and employment and training program requirements Unless exempt, adult applicants for food stamps must register for work, typically with the welfare agency or a State employment service office. To maintain eligibility, they must accept a suitable job if offered one and fulfill any work, ``job search,'' or training requirements established by administering welfare agencies. If the household head fails to fulfill any of these requirements, the entire household is disqualified, typically for 2 months; in other cases, failure to comply disqualifies the noncomplying household member only. Those who are exempt by law from work registration, having to accept a suitable job offer, and employment and training program requirements (work, job search, training) include: persons physically or mentally unfit for work, those under age 16 or age 60 or older, and individuals between 16 and 18 (if they are not head of household or are attending school or a training program); persons working at least 30 hours a week or earning the minimum wage equivalent; persons caring for dependents who are disabled or under age 6, and those caring for children between ages 6 and 12 if adequate child care is not available (this second exemption is limited to allowing these persons to refuse a job offer if care is not available); individuals already subject to and complying with another assistance program's work, training, or job search requirements (i.e., those in AFDC work, training, or job search programs or fulfilling unemployment compensation job search requirements); otherwise eligible postsecondary students; and residents of drug addiction and alcoholic treatment programs. Those not exempted by one of the above-listed rules must, at least, register for work and accept suitable job offers. However, the main thrust of the food stamp employment and training program is to ensure that nonexempt recipients (``mandatory'' work registrants) also fulfill some type of work, job search, or training obligation. To carry this out, welfare agencies are required to operate an employment and training program of their own design for work registrants whom they designate. Welfare agencies may require all work registrants to participate in one or more components of their program, or limit participation (with the Agriculture Department's approval) by further exempting additional categories and individuals for whom participation is judged ``impracticable'' or not ``cost-effective.'' But they must allow otherwise exempt recipients to participate as volunteers and may set up special programs for them. Once the ``pool'' of work registrants who will be required to participate in an employment or training program is identified, welfare agencies must place at least 15 percent of them in one or more program components. Program components can include any or all of the following activities, at the welfare agency's option: supervised job search or training for job search, workfare, work experience or training programs, education programs to improve basic skills, or any other employment or training activity approved by the Agriculture Department. Recipients who take part in an employment or training activity beyond work registration cannot be required to work more than the minimum wage equivalent of their household's benefit, and total hours of participation (including both work and any other required activity) cannot exceed 120 hours a month. Welfare agencies also must provide participants support for costs directly related to participation (e.g., transportation and child care). Agencies may limit this support to $25 per participant per month for all support costs other than dependent care, and to local market rates for necessary dependent care. Categorical eligibility rules and other limitations A few food stamp rules deny food stamp eligibility for reasons other than financial need (limited income or liquid assets) or compliance with work registration or employment and training program requirements: (1) Where the head of household has voluntarily quit a job without good cause, the household's eligibility is barred for 90 days; (2) Households containing members on strike are ineligible, unless eligible prior to the strike; (3) Postsecondary students (in school half-time or more) who are physically and mentally fit for work and between ages 18 and 50 are ineligible unless they are assigned to school by a JTPA or other employment and training program, are employed at least 20 hours a week or participating in a federally financed work-study program, are a parent with responsibility for the care of a dependent child under age 6, an AFDC recipient, responsible for a child between 6 and 12 and do not have access to child care adequate to allow both work and school, or are a full-time single parent student responsible for a child under age 12; (4) Eligibility is barred to illegal or temporarily resident aliens;\14\ (5) Eligibility is denied persons living in institutional settings, except for those in special SSI-approved small group homes for the disabled, persons living in drug addiction or alcoholic treatment programs, and persons in shelters for battered women and children or shelters for the homeless; (6) Boarders are ineligible unless they apply together with the household they are boarding with; (7) Eligibility is denied those who transfer assets for the purpose of qualifying for food stamps; (8) Those who intentionally violate food stamp rules are disqualified for specific time periods ranging from 6 months (on first violation) to permanently (on a third violation); (9) Those failing to provide social security numbers, or to cooperate in providing information needed to verify eligibility or benefit determinations, are ineligible. --------------------------------------------------------------------------- \14\In addition, a legal alien's sponsor's income and assets may deny the alien eligibility. --------------------------------------------------------------------------- BENEFITS Food stamp benefits are a function of a household's size, its counted (net) monthly income, and maximum monthly benefit levels (in some cases, adjusted for geographic location). An eligible household's counted income is determined (as for eligibility), its maximum benefit level is established (depending on its size and location), and a benefit is calculated by subtracting its expected contribution (30 percent of its counted income) from its maximum allotment; maximum allotments are available only to those with no counted monthly income. Allotments are not taxable and food stamp purchases may not be charged sales taxes. Receipt of food stamps does not affect eligibility for or benefits provided by other welfare programs, although some programs use food stamp participation as a ``trigger'' for eligibility and others take into account the general availability of food stamps in deciding what level of benefits to provide. In fiscal year 1993, monthly benefits averaged $68 a person and about $170 a household. Maximum monthly allotments Maximum monthly food stamp allotments are tied to the cost of purchasing a nutritionally adequate low-cost diet, as measured by the Agriculture Department's Thrifty Food Plan (TFP).\15\ Maximum allotments are set at: the monthly cost of the TFP for a 4-person family consisting of a couple between ages 20 and 50 and 2 school-age children, adjusted for family size (using a formula reflecting economies of scale developed by the HNIS), increased by 3 percent, and rounded down to the nearest whole dollar. They are adjusted for food price inflation annually, each October, to reflect the cost of the TFP in the immediately previous June. --------------------------------------------------------------------------- \15\The TFP is the cheapest of four food plans designed by the Agriculture Department's Human Nutrition Information Service (HNIS) and is priced monthly (using data from price surveys done for the CPI-U). --------------------------------------------------------------------------- Maximum allotments are standard in the 48 contiguous States and the District of Columbia; they are higher, reflecting substantially different food costs, in Alaska, Hawaii, Guam, and the Virgin Islands. TABLE 18-6.--MAXIMUM MONTHLY FOOD STAMP ALLOTMENTS [Effective October 1993 through September 1994] ------------------------------------------------------------------------ 48 States Virgin Household size and Alaska\1\ Hawaii Guam Islands D.C. ------------------------------------------------------------------------ 1 person................ $112 $147 $187 $166 $144 2 persons............... 206 271 343 304 265 3 persons............... 295 388 492 436 380 4 persons............... 375 492 625 553 483 5 persons............... 446 585 742 657 573 6 persons............... 535 702 890 789 688 7 persons............... 591 776 984 872 760 8 persons............... 676 887 1125 997 869 Each additional person.. +85 +111 +141 +125 +109 ------------------------------------------------------------------------ \1\Maximum monthly allotments for designated urban areas of Alaska. Two separate higher allotment levels are applied in remote rural areas of Alaska. They are 29 and 56 percent higher than the urban allotments shown here. Minimum and prorated benefits Eligible one- and two-person households are guaranteed a minimum monthly food stamp allotment of $10. Minimum monthly benefits for other household sizes vary from year to year, depending on the relationship between changes in the income eligibility limits and the adjustments to the cost of the TFP, and in a few cases, benefits can be reduced to zero before income eligibility limits are exceeded (making some households eligible for no benefit). At present, minimum monthly allotments for households of three or more persons range from $2 to slightly over $80. In addition, a household's calculated monthly allotment can be prorated (reduced) for one month. On application, a household's first month's benefit is reduced to reflect the date of application. If a previously participating household does not meet eligibility recertification requirements in a timely fashion, but does become certified for eligibility subsequently, benefits for the first month of its new certification period normally are prorated to reflect the date when recertification requirements were met. Application processing and issuing food stamps Food stamp benefits are normally issued monthly. The local welfare agency must either deny eligibility or make food stamps available within 30 days of initial application and must provide food stamps without interruption if an eligible household reapplies and fulfills recertification requirements in a timely manner. Households in immediate need because of little or no income and very limited cash assets, as well as the homeless and those with extraordinarily high shelter expenses, must be given expedited service (provision of benefits within 5 days of initial application). Food stamp issuance is a welfare agency responsibility and issuance practices differ among welfare agencies. Most food stamp coupons are issued by: (1) providing (usually mailing) recipients an authorization-to-participate (ATP) card that is then turned in at a local issuance point (e.g., a bank or post office) when picking up their monthly allotment, or (2) mailing food stamp coupon allotments directly to recipients. However, several pilot projects issue cash benefits, and in a small but growing number of areas, electronic benefit transfer (EBT) systems are used. EBT systems replace coupons with an ATM-like card used to make food purchases at the point of sale by deducting the purchase amount from the recipient's food stamp benefit account. Using food stamps Food stamp benefits are issued in the form of booklets of coupons. The smallest coupon denomination is $1; if change of less than $1 is due on a food stamp purchase, it is returned in cash. Typically, participating households use their food stamps in approved grocery stores to buy food items for home preparation and consumption. However, the actual list of approved uses for food stamps is more extensive, and includes: (1) food for home preparation and consumption, not including alcohol, tobacco, or hot foods intended for immediate consumption; (2) seeds and plants for use in gardens to produce food for personal consumption; (3) in the case of the elderly and SSI recipients (and their spouses), meals prepared and served through approved communal dining programs for the elderly and disabled; (4) in the case of the elderly and those who are disabled to an extent that they cannot prepare all of their meals, home-delivered meals provided by programs for the homebound; (5) meals prepared and served to residents of drug addiction and alcoholic treatment programs, small group homes for the disabled, shelters for battered women and children, and shelters or other establishments serving the homeless; and (6) where the household lives in certain remote areas of Alaska, equipment for procuring food by hunting and fishing (e.g., nets, hooks, fishing rods, and knives). As noted earlier, sales taxes may not be charged on food stamp purchases. Quality control Since the early 1970s, the Food Stamp program, like other welfare programs, has had a ``quality control'' system to monitor the degree to which erroneous eligibility and benefit determinations are made by welfare agencies. The system was established by regulation in the1970s as an administrative tool to enable welfare officials to identify problems and needed corrective actions. Today, by legislative directive, it is also used to calculate and impose fiscal liabilities (``sanctions'') on States that have very high rates of erroneous benefit payments (very high dollar ``error rates''). Under the quality control system, welfare agencies, with Federal oversight, continuously sample their active food stamp caseloads, as well as the correctness of decisions to deny or end benefits, and perform in-depth investigations of the eligibility and benefit status of randomly chosen cases in the samples looking for errors in applying Federal rules and otherwise erroneous benefit and eligibility outcomes. Over 90,000 cases are reviewed each year, and each State's sample is designed to provide a statistically valid picture of erroneous decisions and, in most instances, their dollar value in benefits. The resulting error rate information is used by program managers to chart needed changes in administrative practices, and, by the Federal Government, to assess fiscal sanctions on States with error rates above certain ``tolerance levels,'' to reward States with error rates below a separate lower tolerance level, and to review welfare agency plans for action to correct procedures to control errors. Both error rate findings and any assessed sanctions are subject to appeal through administrative law judges and the Federal courts. Sanctions may be reduced or waived if the State shows ``good cause'' or if it is determined that the sanction amounts should be ``invested'' in improved State administration. Interest may be charged on outstanding sanction liabilities if the administrative appeals process takes more than 1 year. Quality control reviews generate annual estimates of caseload and dollar error rates: the proportion of cases in which an error is found and the dollar value of the errors as a proportion of total benefit dollars. Caseload and dollar error rates are calculated for overpayments (including incorrect payments to eligible and ineligible households) and underpayments. The accuracy of welfare agency decisions denying or terminating assistance also is measured, with an error rate reflecting the proportion of denials and terminations that were improper; no dollar value is calculated. The total national weighted average dollar error rate for overpayments was estimated at 8.2 percent in fiscal year 1992; this was up from 7 percent in 1991 (the all-time low) and was the highest rate recorded since 1985. The fiscal year 1992 caseload error rate for overpayments was estimated at 17.6 percent. Error rates for underpayments have been relatively unchanged over time. In fiscal year 1992, the national weighted average underpayment dollar error rate was estimated at 2.5 percent, and the underpayment caseload error rate was 9.9 percent. Finally, the rate of denials and terminations found improper was 5.1 percent in 1992. The dollar error rates reported through the food stamp quality control system are used as the basis for assessing the financial liability of States for overpaid and underpaid benefits. Although well over $500 million in sanctions have been assessed since the early 1980s, only approximately $5 million has been collected. The appeals process has delayed collection, and sanctions have been forgiven or waived both by Congress and the administration. In amending the rules governing sanctions in 1988 and 1990, Congress forgave accumulated sanctions, and, in late 1992, the administration waived sanctions by allowing States to invest the amounts in improved administration. Rules governing fiscal sanctions have changed a number of times. Under the most recent revision (1993), sanctions are assessed States with combined (overpayment and underpayment) dollar error rates above the national weighted average combined error rate for the year in question (10.7 percent in 1992). Each State's sanction amount is determined by using a ``sliding scale'' so that its penalty assessment equals an amount reflecting the degree to which the State's combined error rate exceeds the national average (the ``tolerance level''). For example, if the tolerance level is 10 percent and a State's error rate is 12 percent, the State would be assessed a sanction of 0.4 percent of benefits paid in the State that year: i.e., the State's error rate is 2 percentage points, or 20 percent, above the tolerance level, and it is assessed a sanction representing 20 percent of the amount by which it exceeds the tolerance level (2 percentage points x 0.2 = 0.4). A State with a combined error rate of 14 percent would owe a penalty of 1.6 percent of benefits, or 40 percent of the amount by which it exceeds the 10-percent tolerance level (4 percentage points x 0.4 = 1.6). Thus, the degree to which a State is assessed sanctions increases as its error rate rises, rather than having sanctions assessed equally on each dollar above the tolerance level. In fiscal year 1992, 12 States had combined error rates above the 10.7 percent tolerance level. States also can receive increased Federal funding for administration if their error rates are below a second, much lower threshold. States with a combined error rate below 6 percent are entitled to a larger-than-normal Federal share of their administrative costs. The regular 50-percent Federal match is, depending on the degree to which the State's error rate is below 6 percent, raised to a maximum of 60 percent, as long as the State's rate of improper denials and terminations is below the national average. This ``enhanced'' administrative funding has typically totaled $5-10 million a year; in fiscal year 1992, six States had combined error rates below 6 percent. Finally, the quality control system also identifies the various sources of error and requires that the majority of States develop and carry out corrective action plans to improve payment accuracy using the information gathered through quality control reviews. These reviews generally show that the primary ``responsibility'' for overpayment errors is almost evenly split between welfare agencies and clients, and the most common errors are related to establishing food stamp expense ``deductions'' and households' income. TABLE 18-7.--FOOD STAMP QUALITY CONTROL ERROR RATES: FISCAL YEAR 1992 [Percent of benefits paid or not paid in error] ------------------------------------------------------------------------ Underpayment Overpayment Combined State error rate error rate error rate ------------------------------------------------------------------------ Alabama......................... 1.76 6.47 8.23 Alaska.......................... 1.20 7.12 8.32 Arizona......................... 3.19 10.16 13.35 Arkansas........................ 2.23 5.25 7.47 California...................... 3.71 7.00 10.71 Colorado........................ 1.80 5.81 7.61 Connecticut..................... 2.47 5.65 8.12 Delaware........................ 1.51 6.87 8.38 D.C............................. 3.10 7.46 10.56 Florida......................... 3.96 15.71 19.68 Georgia......................... 2.65 8.30 10.96 Guam............................ 2.16 6.84 8.99 Hawaii.......................... .99 2.86 3.85 Idaho........................... 2.45 4.73 7.18 Illinois........................ 2.42 7.55 9.97 Indiana......................... 3.23 10.33 13.56 Iowa............................ 3.08 7.68 10.76 Kansas.......................... 1.27 5.62 6.89 Kentucky........................ 1.79 3.06 4.85 Louisiana....................... 1.82 7.33 9.15 Maine........................... 2.31 6.12 8.43 Maryland........................ 2.00 6.99 8.99 Massachusetts................... 1.22 6.16 7.38 Michigan........................ 1.97 7.08 9.05 Minnesota....................... 2.23 8.25 10.48 Mississippi..................... 1.80 8.28 10.08 Missouri........................ 2.64 7.13 9.77 Montana......................... 1.99 6.68 8.75 Nebraska........................ 2.52 6.69 9.21 Nevada.......................... 1.35 5.49 6.83 New Hampshire................... 2.43 9.63 12.06 New Jersey...................... 3.13 5.04 8.17 New Mexico...................... 2.85 5.70 8.55 New York........................ 2.97 8.23 11.20 North Carolina.................. 2.34 6.55 8.89 North Dakota.................... 1.58 4.30 5.89 Ohio............................ 1.88 11.31 13.19 Oklahoma........................ 2.64 6.28 8.92 Oregon.......................... 1.74 7.47 9.21 Pennsylvania.................... 1.95 6.18 8.13 Rhode Island.................... 1.30 3.10 4.40 South Carolina.................. 1.99 7.01 9.00 South Dakota.................... .92 3.60 4.52 Tennessee....................... 2.53 10.59 13.12 Texas........................... 2.22 9.61 11.83 Utah............................ 1.41 5.71 7.12 Vermont......................... 1.59 4.74 6.33 Virginia........................ 2.65 6.26 8.91 Virgin Islands.................. 2.33 3.32 5.64 Washington...................... 2.12 9.61 11.73 West Virginia................... 1.83 8.82 10.64 Wisconsin....................... 2.57 6.74 9.32 Wyoming......................... 2.73 5.92 8.65 ======================================= U.S. average.................... 2.50 8.19 10.69 ------------------------------------------------------------------------ Note: Underpayment and overpayment rates may not add to combined rates due to rounding. Source: Food Stamp Quality Control Annual Report, Fiscal Year 1992. INTERACTION WITH CASH ASSISTANCE PROGRAMS The Food Stamp program is intertwined with cash assistance in two ways: it is administratively linked to cash welfare aid at the State and local levels, and its recipient population is made up largely of recipients of other government benefits. At the State and local levels, the Food Stamp program is administered by the same welfare offices and personnel that administer cash assistance such as AFDC and general assistance. And joint food stamp/cash welfare application and interview procedures are the general rule. This coadministration does not apply for most elderly or disabled persons, whose SSI cash assistance is typically administered through Social Security Administration offices, although these offices do provide limited intake services for the Food Stamp program. For most persons participating in the Food Stamp program, food stamp aid represents a second or third form of government payment. Fewer than 20 percent of food stamp households rely solely on nongovernmental sources for their cash income, although over 25 percent have some income from these sources (e.g., earnings, private retirement income). According to quality control data, the AFDC program contributes to the income of about 41 percent of food stamp households, and for almost all of them AFDC is their only cash income. SSI benefits go to some 19 percent of food stamp households, and almost one- third have no other income. About 20 percent of food stamp households receive social security or veterans benefits. And nearly 15 percent are paid general assistance, unemployment insurance, or workers' compensation benefits. TABLE 18-8.--CHARACTERISTICS OF FOOD STAMP HOUSEHOLDS: 1980-91 [In percent] -------------------------------------------------------------------------------------------------------------------------------------------------------- Year and month survey was conducted ------------------------------------------------------------------------------------------------------------- Food stamp recipient households 1981 1980 (Aug.) 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 (Aug.) (Aug.) (Feb.) (Aug.) (Summer) (Summer) (Summer) (Summer) (Summer) (Summer) (Summer) -------------------------------------------------------------------------------------------------------------------------------------------------------- With gross monthly income: Below the Federal poverty levels...... 87 90 95 93 93 94 93 94 92 92 92 91 Between the poverty levels and 130 percent of the poverty levels........ 10 9 5 7 6 6 6 6 8 8 8 9 Above 130 percent of the poverty levels............................... 2 1 * * 1 * * * * * * * With earnings............................. 19 20 18 20 19 20 21 21 20 20 19 20 With public assistance income\1\.......... 65 69 69 75 71 68 69 74 72 73 73 70 With AFDC income...................... NA 40 42 50 42 39 38 41 42 42 43 41 With SSI income....................... 18 19 18 18 18 19 18 21 20 21 19 19 With children............................. 60 56 58 68 61 59 61 61 61 60 61 61 And female heads of household......... NA 43 45 52 47 46 48 50 50 50 51 51 With elderly members\2\................... 23 21 20 18 22 21 20 21 19 20 18 17 With elderly female heads of household\2\......................... NA 14 14 12 16 16 15 15 14 14 11 10 ============================================================================================================= Average household size.................... 2.8 2.7 2.8 2.9 2.8 2.7 2.7 2.7 2.6 2.6 2.6 2.6 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\Public assistance income includes AFDC, SSI, and general assistance. \2\Elderly members and heads of household include those age 60 or older. *Less than 0.5 percent. Source: U.S. Department of Agriculture (Food and Nutrition Service) surveys of the characteristics of food stamp households. Compiled by the Congressional Research Service. FOOD STAMP RECIPIENCY RATES Table 18-9 shows gross food stamp participation or recipiency rates using three different measures for the United States from 1975 to 1993. The actual number of food stamp participants has fluctuated widely over the last 18 years, reaching its highest average monthly level of 27 million (not including Puerto Rico) in 1993. As a percentage of the total U.S. resident population, food stamp participation rose significantly from a rate of 8.1 participants per 100 persons in 1975 to 10.4 percent in 1993. In the poor and pretransfer poor populations, the food stamp participation rates in 1991 were 63.3 and 59.3 percent respectively. ``Pretransfer poor'' is defined as income including Social Security and other social insurance benefits but not including means-tested benefits in relationship to the poverty thresholds. A recent report by the U.S. Department of Agriculture, entitled ``Food Stamp Program Participation Rates: January 1989,'' provides a more refined analysis of Food Stamp program participation rates and the extent to which the program is serving its target population. The report estimates that 59 percent of individuals eligible for food stamps participated, and that 56 percent of eligible households participated. Those households received 66 percent of benefits payable if all eligible households had been enrolled. In addition, particular subgroups of the eligible population participated at different rates. Among groups defined by monthly income levels, participation rates were highest for those with the lowest income and declined as income levels rose. Participation rates were 81 percent for those with income below half the Federal poverty guidelines, 68 percent for those with income between half the guidelines and the guidelines themselves, and 17 percent for those with incomes above the poverty thresholds. Demographic groups also showed different participation rates. Eligible elderly households participated at a rate of 29 percent, while households composed of single adult females with children were enrolled the at rate of 78 percent and 90 percent of eligible disabled nonelderly adult households participated. TABLE 18-9.--FOOD STAMP PARTICIPATION RATES IN THE UNITED STATES, 1975-93 ---------------------------------------------------------------------------------------------------------------- Food stamp participation as percent of-- Number of ----------------------------------------------- food stamp Pre-transfer Year participants Total Poor poor (in population\1\ population\2\ population\3\ millions) ---------------------------------------------------------------------------------------------------------------- 1975.............................................. 16.3 7.6 63.0 NA 1976.............................................. 17.0 7.9 68.1 NA 1977.............................................. 15.6 7.2 63.1 NA 1978.............................................. 14.4 6.5 58.8 NA 1979.............................................. 15.9 7.1 61.0 57.1 1980.............................................. 19.2 8.4 65.6 60.7 1981.............................................. 20.6 9.0 64.7 60.8 1982.............................................. 20.4 8.8 59.3 56.3 1983.............................................. 21.6 9.2 61.2 58.5 1984.............................................. 20.9 8.8 62.0 58.5 1985.............................................. 19.9 8.3 60.2 56.6 1986.............................................. 19.4 8.0 59.9 56.2 1987.............................................. 19.1 7.8 59.1 55.6 1988.............................................. 18.7 7.6 58.9 55.2 1989.............................................. 18.8 7.6 59.6 55.6 1990.............................................. 20.0 8.0 59.6 55.7 1991.............................................. 22.6 9.0 63.3 59.3 1992.............................................. 25.4 10.0 68.9 64.0 1993.............................................. 27.0 10.4 NA NA ---------------------------------------------------------------------------------------------------------------- \1\Total U.S. resident population was 258.4 million at the end of fiscal year 1993. \2\Data on the U.S. poor population can be found in appendix J, table 3. \3\Data on the U.S. pretransfer poor population can be found in appendix J, table 15, and previous editions of the Green Book. ``Pretransfer'' is defined as after social insurance income (including Social Security) but before receipt of any means-tested transfers. NA--not available. Note: Puerto Rico not included in table. Table 18-10 shows the number of people (in thousands) who received food stamp benefits in each State, including the District of Columbia, Puerto Rico, and the territories, for selected fiscal years between 1975 and 1993. The number of recipients varies greatly by State; in 1993, the number of beneficiaries ranged from 13,000 to 18,000 in the territories and 34,000 in Wyoming to 2.9 million in California. In nearly all States, there was a significant increase between 1975 and 1993. This is reflected in the total number of enrollees, which increased from 17.4 million persons (plus 1.8 million in Puerto Rico) in 1975, to 27 million people (plus 1.4 million in Puerto Rico) in 1993.\16\ --------------------------------------------------------------------------- \16\The 17.4 million person enrollment for food stamps in 1975 differs from the 16.3 million person participation level noted in table 9 because it represents year-end enrollment as opposed to annual average participation. The same is true for 1979, for which table 10 shows enrollment of 17.1 million persons (excluding Puerto Rico), and table 9 shows 15.9 million persons. State-by-State participation for 1975 and 1979 is not available on an annual average basis. --------------------------------------------------------------------------- TABLE 18-10.--FOOD STAMP RECIPIENTS, BY STATE: SELECTED YEARS, 1975-93 [Thousands of persons] ---------------------------------------------------------------------------------------------------------------- Fiscal years State --------------------------------------------------------------------------------------- 1975\1\ 1979\2\ 1985\3\ 1989\3\ 1990\3\ 1991\3\ 1992\3\ 1992\3\ ---------------------------------------------------------------------------------------------------------------- Alabama................. 393 525 588 436 449 504 550 560 Alaska.................. 12 25 22 26 25 30 38 43 Arizona................. 166 129 206 264 317 388 457 489 Arkansas................ 268 277 253 227 235 258 277 285 California.............. 1,517 1,334 1,615 1,773 1,936 2,212 2,558 2,866 Colorado................ 162 145 170 211 221 241 260 273 Connecticut............. 189 155 145 114 133 171 202 215 Delaware................ 39 45 40 30 33 41 51 58 District of Columbia.... 112 100 72 58 62 72 82 87 Florida................. 767 828 630 668 781 1,021 1,404 1,500 Georgia................. 569 559 567 485 536 648 751 807 Hawaii.................. 84 96 99 78 77 83 94 103 Idaho................... 39 47 59 61 59 65 72 79 Illinois................ 948 837 1,110 990 1,013 1,096 1,156 1,178 Indiana................. 255 275 406 285 311 375 448 497 Iowa.................... 118 117 203 168 170 180 192 196 Kansas.................. 63 73 119 128 142 156 175 188 Kentucky................ 449 405 560 447 458 496 529 530 Louisiana............... 502 523 644 725 727 742 779 779 Maine................... 151 121 114 84 94 116 133 138 Maryland................ 273 299 291 249 254 304 343 375 Massachusetts........... 560 429 337 314 347 397 429 443 Michigan................ 685 706 985 874 917 978 994 1,022 Minnesota............... 191 143 228 245 263 286 309 317 Mississippi............. 390 452 495 493 499 520 536 537 Missouri................ 299 280 362 404 431 490 549 591 Montana................. 38 33 58 56 57 61 66 70 Nebraska................ 50 55 94 92 95 99 107 113 Nevada.................. 34 27 32 41 50 63 80 93 New Hampshire........... 66 44 28 22 31 47 58 60 New Jersey.............. 565 524 464 353 381 441 495 531 New Mexico.............. 154 159 157 151 157 188 221 244 New York................ 1,398 1,704 1,834 1,463 1,546 1,717 1,885 2,045 North Carolina.......... 537 517 474 390 419 517 597 627 North Dakota............ 19 20 33 39 39 41 46 48 Ohio.................... 924 760 1,133 1,068 1,078 1,171 1,251 1,269 Oklahoma................ 184 184 263 261 267 296 346 370 Oregon.................. 208 160 228 213 216 240 265 283 Pennsylvania............ 893 923 1,032 916 954 1,052 1,137 1,186 Rhode Island............ 104 80 69 57 64 78 87 92 South Carolina.......... 421 369 373 272 299 329 369 394 South Dakota............ 31 37 48 50 50 52 55 56 Tennessee............... 435 531 518 500 527 608 702 774 Texas................... 1,085 1,027 1,263 1,636 1,880 2,155 2,454 2,659 Utah.................... 50 44 75 95 99 110 123 133 Vermont................. 46 40 44 34 38 47 54 58 Virginia................ 293 320 360 333 346 414 495 535 Washington.............. 239 205 281 283 337 385 432 462 West Virginia........... 204 182 278 259 262 281 310 322 Wisconsin............... 163 171 363 291 286 294 334 337 Wyoming................. 11 11 27 27 28 31 33 34 Guam.................... 21 18 20 13 12 11 20 13 Northern Marianas....... NA NA 4 4 4 2 2 3 Puerto Rico............. 1,800 1,822 1,480 1,460 1,480 1,490 1,480 1,440 Virgin Islands.......... 25 34 32 16 18 15 16 18 --------------------------------------------------------------------------------------- Total............. 19,199 18,926 21,385 20,232 21,510 24,105 26,888 28,426 ---------------------------------------------------------------------------------------------------------------- \1\Yearend participation, July 1975. Total does not match totals in other tables, which are annual average participation. \2\Yearend participation, September 1979. Total does not match totals in other tables, which are annual average participation. During fiscal year 1979, and into 1980, participation increases were largely due to the elimination of the food stamp purchase requirement. Figures for Alabama and Mississippi are estimates. \3\Annual average participation. Source: U.S. Department of Agriculture, Food and Nutrition Service. LEGISLATION In the early 1980s, Congress enacted major revisions to the food stamp program to hold down costs and tighten administrative rules. The Omnibus Budget Reconciliation Act of 1981, the Agriculture and Food Act of 1981, and the Omnibus Budget Reconciliation Act of 1982 all contained amendments that the Congressional Budget Office has estimated held food stamp spending for fiscal years 1982 through 1985 nearly $7 billion (13 percent) below what would have been spent under pre-1981 law. These laws delayed various inflation indexing adjustments, reduced the maximum benefit guarantee by 1 percent (restored in 1984), established income eligibility ceilings at 130 percent of the Federal poverty levels, initiated prorating of first- month benefits, replaced the food stamp program in Puerto Rico with a nutrition assistance block grant, reduced benefits for those with earnings and high shelter expenses, ended eligibility for most postsecondary students and strikers, and raised fiscal penalties for States with high rates of erroneous benefit and eligibility determinations. In 1985, the Food Security Act (P.L. 99-198) reauthorized food stamp appropriations through fiscal year 1990 and reversed the earlier trend, significantly liberalizing food stamp rules. Major new initiatives included: a requirement for States to implement employment and training programs for food stamp recipients, automatic food stamp eligibility for AFDC and SSI recipients, and a prohibition on collection of sales taxes on food stamp purchases. Benefits were raised for some disabled and those with earnings, high shelter costs, and dependent care costs. Puerto Rico's nutrition assistance block grant was increased. Eligibility standards were liberalized, primarily by increasing and easing limits on assets. This was followed by several laws in 1986 and 1987 that opened up access to and increased benefits for the homeless, liberalized treatment of student aid, energy assistance, and income received from employment programs for the elderly and charitable organizations, further added to benefits for those with high shelter costs, and allowed Washington State to operate a special AFDC/food stamp demonstration project (followed by similar authorization for Minnesota in 1989). Legislation expanding eligibility and benefits continued into 1988 and 1989. The Hunger Prevention Act of 1988 (P.L. 100-435) increased food stamp benefits across the board, liberalized several eligibility and benefit rules, eased program access and administrative rules, and restructured the employment and training program and quality control system. The across-the-board benefit increase in maximum benefits (above normal inflation adjustments) called for by the act was 0.65 percent in fiscal year 1989, 2.05 percent in fiscal year 1990, and 3 percent in later years. Eligibility and benefit liberalizations included higher benefits for those with dependent care expenses, extension of liberal treatment for disabled applicants and recipients to new categories of disability, addition of a new income disregard for earned income tax credits, and liberalized treatment for farm households. Major provisions pertaining to program access and administration authorized 50-percent Federal cost sharing for State-option outreach activities, required coordination with cash welfare program application procedures, loosened rules governing monthly reporting and retrospective budgeting, allowed training of community volunteers to help screen applicants, and required, in some instances, issuance of the first 2 months' worth of benefits in a single allotment. Employment and training rules were revised by allowing some expansion in the types of activities supported (e.g., basic skills education), requiring increased support for participants' dependent care expenses, and mandating new performance standards for States. Finally, the food stamp quality control system was completely revamped to substantially reduce fiscal sanctions on States for erroneous benefit determinations, retroactively to fiscal year 1986. The 1990 Food, Agriculture, Conservation, and Trade Act (P.L. 101-624) reauthorized food stamp appropriations through fiscal year 1995. Although early versions of this act would have significantly liberalized food stamp eligibility and benefit rules, budget constraints dictated minimal expansions: limited revisions for postsecondary students, forgiveness of most pre-1986 quality control fiscal sanctions on States, a few changes in administrative rules to open up program access and strengthen penalties for trafficking, and new pilot projects and study commissions for welfare program coordination. In addition, other laws eliminated a special requirement for single food stamp/SSI applications for those about to be discharged from institutions and barred the food stamp program from counting (as a liquid asset) lump-sum earned income tax credit payments. Most recently, the Mickey Leland Childhood Hunger Relief Act (incorporated in the 1993 Omnibus Budget Reconciliation Act, P.L. 103-66) increased food stamp benefits and eased eligibility rules by: increasing and then removing the limit on special benefit adjustments (deductions) for households with very high shelter expenses, ending a practice of reducing benefits when there are short ``procedural'' breaks in enrollment, disregarding child support payments as income to the payor, increasing the degree to which vehicles are disregarded as assets in judging eligibility, revising the definition of a food stamp household to allow more persons who live together to apply separately, increasing the degree to which dependent care expense deductions can be claimed, expanding the degree to which Earned Income Tax Credits are disregarded as assets and State/local general assistance is disregarded as income, and boosting Puerto Rico's block grant. The Act also lowered the Federal share of some State administrative expenses (to 50 percent), reduced quality control fiscal penalties on States with high rates of erroneous benefit and eligibility determinations, and liberalized the appeals process for those penalties. Finally, it expanded support for employment and training programs for food stamp recipients, added a new method for collecting claims against recipients, and increased penalties related to trafficking in food stamps. The net cost of the 1993 amendments was estimated at $2.5 billion over fiscal years 1994-98. TABLE 18-11.--HISTORICAL FOOD STAMP STATISTICS ---------------------------------------------------------------------------------------------------------------- Total Federal spending Average monthly (in millions)\1\ Average benefits (per person) 4-person ------------------------ monthly ------------------------ maximum Fiscal year Constant participation Constant monthly Current (1993) (in millions Current (1993) allotment\2\ dollars dollars\3\ of persons) dollars dollars\3\ ---------------------------------------------------------------------------------------------------------------- 1972\4\........................... $1,871 $6,242 11.1 $13.50 $45.00 $108 1973.............................. 2,211 6,865 12.2 14.60 45.00 112 1974.............................. 2,843 7,370 12.9 17.60 45.20 116 1975\5\........................... 4,624 10,922 17.1 21.40 50.10 150 1976.............................. 5,692 12,718 18.5 23.90 52.80 162 Transition quarter\6\............. 1,367 3,000 17.3 24.40 52.90 166 1977.............................. 5,469 11,707 17.1 24.70 52.40 166 1978.............................. 5,573 10,947 16.0 26.80 52.00 170 1979\7\........................... 6,995 12,326 17.7 30.60 53.20 182 1980.............................. 9,188 14,883 21.1 34.40 55.40 204 1981.............................. 11,308 16,824 22.4 39.50 58.50 209 1982\8\........................... 11,117 15,947 22.0 39.20 56.10 233 1983\8\........................... 12,733 17,985 23.2 43.00 60.60 253 1984\8\........................... 12,470 16,989 22.4 42.70 58.10 253 1985\8\........................... 12,599 16,893 21.4 45.00 60.30 264 1986\8\........................... 12,528 16,412 20.9 45.50 59.60 268 1987\8\........................... 12,539 15,710 20.6 45.80 57.30 271 1988\8\........................... 13,289 16,106 20.1 49.80 60.30 290 1989\8\........................... 13,815 15,664 20.2 51.90 58.60 300 1990\8\........................... 16,512 17,739 21.5 59.00 63.10 331 1991\8\........................... 19,765 20,589 24.1 63.90 65.80 352 1992\8\........................... 23,539 24,027 26.9 68.50 69.90 370 1993\8\........................... 24,806 24,806 28.4 68.00 68.00 375 ---------------------------------------------------------------------------------------------------------------- \1\Spending for benefits and administration, including Puerto Rico. \2\For the 48 contiguous States and the District of Columbia, as in effect at the beginning of the fiscal year in current dollars. \3\Constant dollar adjustments were made using the overall Consumer Price Index for All Urban Consumers (CPI-U) for administrative costs and the CPI-U ``food at home'' component for benefits. \4\The first fiscal year in which benefit and eligibility rules were, by law, nationally uniform and indexed for inflation. \5\The first fiscal year in which food stamps were available nationwide. \6\July through September 1976. \7\The fiscal year in which the food stamp purchase requirement was eliminated, on a phased in basis. \8\Includes funding for Puerto Rico's nutrition assistance grant; earlier years include funding for Puerto Rico under the regular food stamp program. Participation figures include enrollment in Puerto Rico (averaging 1.4 to 1.5 million persons a month under the nutrition assistance grant and higher figures in earlier years). Average benefit figures do not reflect somewhat lower benefits in Puerto Rico under its nutrition assistance grant. Note: Figures in this table have been revised from similar tables presented in earlier versions of this print to reflect more recent spending information and more precise inflation adjustments for constant dollar amounts. Source: Compiled by the Congressional Research Service. MEDICAID\17\ Medicaid, authorized under title XIX of the Social Security Act, is a Federal-State matching entitlement program providing medical assistance for low-income persons who are aged, blind, disabled, members of families with dependent children and certain other pregnant women and children. Within Federal guidelines, each State designs and administers its own program. Thus there is substantial variation among the States in terms of persons covered, types and scope of benefits offered, and amounts of payments for services. --------------------------------------------------------------------------- \17\For further information on the Medicaid program see: U.S. Congress, House Committee on Energy and Commerce, Medicaid Source Book: Background Data and Analysis (A 1993 Update), Energy and Commerce Committee Print 103-A. U.S. Govt. Print. Off. January 1993. --------------------------------------------------------------------------- Medicaid eligibility is generally linked to eligibility under programs within the jurisdiction of the Committee on Ways and Means, namely AFDC and SSI. Further, some poor aged persons are covered under both the Medicare and Medicaid programs. ELIGIBILITY Eligibility for Medicaid has traditionally been linked to actual or potential receipt of cash assistance under the Aid to Families with Dependent Children (AFDC) or Supplemental Security Income (SSI) programs. Legislation in the last decade has gradually extended coverage to low-income pregnant women and children who have no ties to the welfare system, and has provided partial coverage for new groups of low-income Medicare beneficiaries. Medicaid is available to two broad classes of eligible persons: the ``categorically needy'' and the ``medically needy.'' The two terms once distinguished between welfare- related beneficiaries and those qualifying only under special Medicaid rules. However, nonwelfare groups have been added to the ``categorically needy'' list over the years. As a result, the terms are no longer especially helpful in sorting out the various populations for whom mandatory or optional Medicaid coverage has been made available, and some analysts believe they should be abandoned. However, the distinction between the categorically and medically needy is still an important one, because the scope of covered services that States must provide to the categorically needy is much broader than the minimum scope of services for the medically needy. All States must cover certain mandatory groups of categorically needy individuals.\18\ Coverage of additional categorically needy groups is optional, as is coverage of the medically needy. The following discussion describes the mandatory and optional categorically eligible groups within each of the two basic populations served by Medicaid: families with children and the aged, blind, and disabled. The medically needy are discussed separately at the end of this section. --------------------------------------------------------------------------- \18\Arizona does not operate a traditional Medicaid program. Since 1982 it has operated a federally assisted medical assistance program for low-income persons under a demonstration waiver. --------------------------------------------------------------------------- FAMILIES AND CHILDREN AFDC-related groups Mandatory.--States must provide Medicaid to all persons receiving cash assistance under AFDC, as well as to additional AFDC-related groups who are not actually receiving cash payments. These groups include: persons who do not receive a payment because the amount would be less than $10; persons whose payments are reduced to zero because of recovery of previous overpayments; certain work supplementation participants; certain children for whom adoption assistance agreements are in effect or for whom foster care payments are being made under title IV-E of the Social Security Act; and persons ineligible for AFDC because of a requirement that may not be imposed under Medicaid. States are required to continue Medicaid for specified periods for certain families losing AFDC benefits after receiving them in at least 3 of the preceding 6 months. If the family loses AFDC benefits because of increased income from earnings or hours of employment, Medicaid coverage must be extended for 12 months. (During the second 6 months a premium may be imposed, the scope of benefits may be limited, or alternate delivery systems may be used.) If the family loses AFDC because of increased child or spousal support, coverage must be extended for 4 months. States are also required to furnish Medicaid to certain two-parent families whose principal earner is unemployed and who are not receiving cash assistance because the State is one of those permitted (under the Family Support Act of 1988) to set a time limit on AFDC coverage for such families. Optional.--States are permitted, but not required, to provide coverage to additional AFDC-related groups. The most important of these are the ``Ribicoff children,'' whose income and resources are within AFDC standards but who do not meet the definition of ``dependent child.'' States may cover these children up to a maximum age of 18, 19, 20, or 21, at the State's option, and may limit coverage to reasonable subgroups, such as children in privately subsidized foster care, or those who live in certain institutional settings. States may also furnish Medicaid to persons who would receive AFDC if the State's AFDC program were as broad as permitted under Federal law. Non-AFDC pregnant women and children Beginning in 1986, Congress has extended Medicaid to groups of pregnant women and children who are defined in terms of family income and resources, rather than in terms of their ties to the AFDC program. Mandatory.--States are required to cover pregnant women and children under age 6 with family incomes below 133 percent of the Federal poverty income guidelines. (The State may impose a resource standard that is no more restrictive than that for SSI, in the case of pregnant women, or AFDC, in the case of children.) Coverage for pregnant women is limited to services related to the pregnancy or complications of the pregnancy; children receive full Medicaid coverage. Since July 1, 1991, States have been required to cover all children who are under age 19, who were born after September 30, 1983, and whose family income is below 100 percent of the Federal poverty level. (Coverage of such children through age 7 has been optional since OBRA 1987.) The 1983 start date means that coverage of 18-year-olds will take effect during fiscal year 2002. Optional.--States are permitted, but not required, to cover pregnant women and infants under one year old with incomes below a State-established maximum that is above 133 percent of the poverty level but no more than 185 percent. As of July 1993, 34 States had made use of this option; 25 had set their income limits at the maximum of 185 percent. AGED AND DISABLED PERSONS SSI-related groups Mandatory.--States are generally required to cover recipients of SSI. However, States may use more restrictive eligibility standards for Medicaid than those for SSI if they were using those standards on January 1, 1972 (before the implementation of SSI). States that have chosen to apply at least one more restrictive standard are known as ``section 209(b)'' States, after the section of the Social Security Amendments of 1972 (Public Law 92-603) that established the option. These States may vary in their definition of disability, or in their standards related to income or resources. There are 12 section 209(b) States: Connecticut Minnesota North Dakota Hawaii Missouri Ohio Illinois New Hampshire Oklahoma Indiana North Carolina Virginia States using more restrictive income standards must allow applicants to deduct medical expenses from income (not including SSI or State supplemental payments, SSP) in determining eligibility. This process is known as ``spenddown.'' For example, if an applicant has a monthly income of $400 (not including any SSI or SSP) and the State's maximum allowable income is $350, the applicant would be required to incur $50 in medical expenses before qualifying for Medicaid. As will be discussed below, the spenddown process is also used in establishing medically needy eligibility. States must continue Medicaid coverage for several defined groups of individuals who have lost SSI or SSP eligibility. The ``qualified severely impaired'' are disabled persons who have returned to work and have lost eligibility as a result of employment earnings, but still have the condition that originally rendered them disabled and meet all non-disability criteria for SSI except income. Medicaid must be continued if such an individual needs continued medical assistance to continue employment and the individual's earnings are insufficient to provide the equivalent of SSI, Medicaid, and attendant care benefits the individual would qualify for in the absence of earnings. States must also continue Medicaid coverage for persons who were once eligible for both SSI and Social Security payments and who lose SSI because of a cost of living adjustment (COLA) in their Social Security benefits. Similar Medicaid continuations have been provided for certain other persons who lose SSI as a result of eligibility for or increases in Social Security or veterans' benefits. Finally, States must continue Medicaid for certain SSI-related groups who received benefits in 1973, including ``essential persons'' (persons who care for a disabled individual). Optional.--States are permitted to provide Medicaid to individuals who are not receiving SSI but are receiving State- only supplementary cash payments. Qualified Medicare beneficiaries and related groups Mandatory.--Effective January 1, 1991, States must provide limited Medicaid coverage for ``qualified Medicare beneficiaries'' (QMBs). These are aged and disabled persons who are receiving Medicare, whose income is below 100 percent of the Federal poverty level, and whose resources do not exceed twice the allowable amount under SSI. States must pay Medicare part B premiums (and, if applicable, part A premiums) for QMBs, along with required Medicare coinsurance and deductible amounts. Effective January 1, 1993, all States must pay part B premiums (but not part A premiums or part A or B coinsurance and deductibles) for beneficiaries who would be QMBs except that their incomes are between 100 percent and 110 percent of the poverty level; the upper limit rises to 120 percent on January 1, 1995. States are also required to pay part A premiums, but no other expenses, for ``qualified disabled and working individuals.'' These are persons who formerly received Social Security disability benefits and hence Medicare, have lost eligibility for both programs, but are permitted under Medicare law to continue to receive Medicare in return for payment of the part A premium. Medicaid must pay this premium on behalf of such individuals who have incomes below 200 percent of poverty and resources no greater than twice the SSI standard. Optional.--States are permitted to provide full Medicaid benefits, rather than just Medicare premiums and cost-sharing, to QMBs who meet a State-established income standard that is no higher than 100 percent of the Federal poverty level. Institutionalized persons and related groups (all optional) States may provide Medicaid to certain otherwise ineligible groups of persons who are in nursing facilities or other institutions, or who would require institutional care if they were not receiving alternative services at home or in the community. States may establish a special income standard for institutionalized persons, not to exceed 300 percent of the maximum SSI benefits payable to a person who is living at home and has no other resources. States may also provide Medicaid to persons who would qualify for SSI but for the fact that they are in an institution. A State may obtain a waiver under section 2176 of OBRA 1981 to provide home and community-based services to a defined group of individuals who would otherwise require institutional care. Persons served under such a waiver may receive Medicaid coverage if they would be eligible if in an institution. Such individuals may also be covered in a State that terminates its waiver program in order to take advantage of a new, no-waiver home and community-based services option created by OBRA 1990. A State may also provide Medicaid to several other classes of persons who need the level of care provided by an institution and would be eligible if they were in an institution. These include children who are being cared for at home, persons of any age who are ventilator-dependent, and persons receiving hospice benefits in lieu of institutional services. THE MEDICALLY NEEDY (ALL OPTIONAL) Forty-one States and other jurisdictions provide Medicaid to at least some groups of ``medically needy'' persons. These are persons who meet the nonfinancial standards for inclusion in one of the groups covered under Medicaid, but who do not meet the applicable income or resource requirements for categorically needy eligibility. The State may establish higher income or resource standards for the medically needy. In addition, individuals may spend down to the medically needy standard by incurring medical expenses, in the same way that SSI recipients in section 209(b) States may spend down to Medicaid eligibility. For the medically needy, spenddown may involve the reduction of assets, as well as of income. The State may set its separate medically needy income standard for a family of a given size at any level up to 133\1/ 3\ percent of the maximum payment for a similar family under the State's AFDC program. States may limit the groups of individuals who may receive medically needy coverage. If the State provides any medically needy program, however, it must include all children under 18 who would qualify under one of the mandatory categorically needy groups, and all pregnant women who would qualify under either a mandatory or optional group, if their income or resources were lower. As of October 1, 1993, the following States covered some groups of the medically needy: American Samoa Maryland Pennsylvania Arkansas Massachusetts Puerto Rico California Michigan Rhode Island Connecticut Minnesota Tennessee District of Columbia Montana Texas Florida Nebraska Utah Georgia New Hampshire Vermont Hawaii New Jersey Virgin Islands Illinois New York Virginia Iowa North Carolina Washington Kansas North Dakota West Virginia Kentucky Northern Mariana Islands Wisconsin Louisiana Oklahoma Maine Oregon MEDICAID AND THE POOR In 1992, Medicaid covered 11.2 percent of the total U.S. population (excluding institutionalized persons) and 47 percent of those with incomes below the Federal poverty level. Because categorical eligibility requirements for children are less restrictive than those for adults, poor children are much more likely to receive coverage. Table 18-12 shows Medicaid eligibility by age and income status in 1992, as reported in the March 1993 Current Population Survey (CPS) conducted by the Census Bureau. Note that persons shown as receiving Medicaid may have had other health coverage as well. Nearly all the elderly, for example, have Medicare and/or private coverage. Children under age 6 with family incomes below poverty are most likely to be covered. Coverage rates drop steadily with age and income until age 65. TABLE 18-12.--MEDICAID COVERAGE BY AGE AND INCOME STATUS, 1992 [All numbers are in thousands] ------------------------------------------------------------------------ Percent Age Medicaid Total with Medicaid ------------------------------------------------------------------------ Poor: 0 to 5....................... 4,458 6,046 73.7 6 to 18...................... 5,419 9,220 58.8 19 to 44..................... 4,988 13,201 37.8 45 to 64..................... 1,349 4,431 30.4 65 and over.................. 1,205 3,983 30.2 -------------------------------------- Total...................... 17,419 36,880 47.2 ====================================== Family income between 100 and 133 percent of poverty: 0 to 5....................... 726 1,693 42.9 6 to 18...................... 865 3,246 26.6 19 to 44..................... 968 5,708 17.0 45 to 64..................... 412 2,176 18.9 65 and over.................. 564 3,004 18.8 -------------------------------------- Total...................... 3,534 15,827 22.3 ====================================== Family income between 133 percent and 185 percent of poverty: 0 to 5....................... 737 2,690 27.4 6 to 18...................... 706 5,251 13.4 19 to 44..................... 891 9,847 9.0 45 to 64..................... 293 3,619 8.1 65 and over.................. 426 4,644 9.2 -------------------------------------- Total...................... 3,053 26,051 11.7 ====================================== Family income greater than 185 percent of poverty: 0 to 5....................... 888 13,079 6.8 6 to 18...................... 966 28,879 3.3 19 to 44..................... 1,363 74,489 1.8 45 to 64..................... 468 39,524 1.2 65 and over.................. 720 19,240 3.7 -------------------------------------- Total...................... 4,405 175,211 2.5 ====================================== All individuals: 0 to 5....................... 6,809 23,508 29.0 6 to 18...................... 7,956 46,596 17.1 19 to 44..................... 8,210 103,245 8.0 45 to 64..................... 2,522 49,750 5.1 65 and over.................. 2,914 30,870 9.4 -------------------------------------- Total...................... 28,411 253,969 11.2 ------------------------------------------------------------------------ Source: Current Population Survey (CPS), Annual March Income Supplement. Table prepared by CRS. The table excludes persons in institutions and approximately 300,000 children under age 15 whose income was not reported. The Medicaid counts are lower than those reported by HCFA, because some beneficiaries fail to report their coverage on the CPS. Some may also underreport their income. In addition, the income used to determine poverty status in this table includes cash welfare, while Medicaid eligibility is based on income prior to the receipt of welfare benefits. SERVICES States are required to offer the following services to categorically needy recipients under their Medicaid programs: inpatient and outpatient hospital services; laboratory and X- ray services; nursing facility (NF) services for those over age 21; home health services for those entitled to NF care; early and periodic screening, diagnosis, and treatment (EPSDT) for those under age 21; family planning services and supplies; physicians' services, and nurse-midwife services. OBRA 1989 required States to provide ambulatory services offered by federally qualified health centers, effective April 1, 1990, and services furnished by certified family or pediatric nurse practitioners, effective July 1, 1990. States may also provide additional medical services such as drugs, eyeglasses, inpatient psychiatric care for individuals under age 21 or over 65 (see table 25). OBRA 1990 added two new optional services: home and community-based services for the functionally disabled elderly and community supported living arrangement services for the developmentally disabled. Total expenditures under these services are capped. States are permitted to establish limitations on the amount of care provided under a service category (such as limiting the number of days of covered hospital care or number of physicians' visits). Certain services to children may not be limited. Federal law establishes the following requirements for coverage of the medically needy: (1) if a State provides medically needy coverage to any group it must provide ambulatory services to children and prenatal and delivery services for pregnant women; (2) if a State provides institutional services for any medically needy group it must also provide ambulatory services for this population group; and (3) if the State provides medically needy coverage for persons in intermediate care facilities for the mentally retarded (ICF/ MRs) or institutions for mental diseases, it must offer to all groups covered in its medically needy program the same mix of institutional and noninstitutional services as required under prior law (that is, either all of the mandatory services or alternatively the care and services listed in 7 of the 25 paragraphs in the law defining covered services). FINANCING The Federal Government helps States share in the cost of Medicaid services by means of a variable matching formula which is adjusted annually. The matching rate, which is inversely related to a State's per capita income, can range from 50 percent to 83 percent though currently the highest rate is 78.85 percent. Federal matching for the territories is set at 50 percent with a maximum dollar limit placed on the amount each territory can receive. The Federal share of administrative costs is 50 percent for all States except for certain items where the authorized rate is higher. REIMBURSEMENT POLICY States establish their own service reimbursement policies within general Federal guidelines. OBRA 1989 codified the regulatory requirement that payments must be sufficient to enlist enough providers so that covered services will be available to Medicaid beneficiaries at least to the extent they are available to the general population in a geographic area. Beginning April 1, 1990, States are required to submit to the Secretary their payment rates for pediatric and obstetrical services along with additional data that will assist the Secretary in evaluating the State's compliance with this requirement. Until 1980, States were required to follow Medicare rules in paying for institutional services. The Boren amendment, enacted with respect to nursing homes in 1980 and extended to hospitals in 1981, authorized States to establish their own payment systems, as long as rates were reasonable and adequate to meet the costs of efficiently and economically operated facilities. Rates for hospitals must also be sufficient to assure reasonable access to inpatient services of adequate quality. A Supreme Court ruling in 1990, Wilder v. Virginia Hospital Association, affirmed that hospitals have the right under this rule to seek Federal court review of State reimbursement levels. Suits alleging inadequate hospital and nursing home payment have been filed in a number of States. In addition to meeting general adequacy tests, State hospital reimbursement systems must provide for additional payments to facilities serving a disproportionate share of low- income patients. Unlike the comparable Medicare payments, Medicaid payments must follow a formula that considers a hospital's charity patients as well as its Medicaid caseload. OBRA 1990 established new rules for Medicaid reimbursement of prescription drugs. The law denies Federal matching funds for drugs manufactured by a firm that has not agreed to provide rebates. Under amendments made by the Veterans Health Care Act of 1992, a manufacturer is not deemed to have a rebate agreement unless the manufacturer has entered into a master agreement with the Secretary of Veterans Affairs. Rebate amounts vary depending on the nature of the drug. The minimum rebate is 11 percent of the average price. OBRA 1990 established a 4-year moratorium on reductions in most payment rates for pharmacists. Practitioners and providers are required to accept payments under the program as payment in full for covered services except where nominal cost-sharing charges may be required. States may generally impose such charges with certain exceptions. They are precluded from imposing such charges on services for children under 18, services related to pregnancy, family planning or emergency services, HMO services for the categorically needy, and services provided to NF inpatients who are required to spend all of their income for medical care except for a personal needs allowance. ADMINISTRATION Medicaid is a State-administered program. At the Federal level, the Health Care Financing Administration (HCFA) of the Department of Health and Human Services is responsible for overseeing State operations. Federal law requires that a single State agency be charged with administration of the Medicaid program. Generally, that agency is either the State welfare agency, the State health agency, or the umbrella human resources agency. The single State agency may contract with other State entities to conduct some program functions. Further, States may process claims for reimbursement themselves or contract with fiscal agents or health insuring agencies to process these claims. RECENT LEGISLATIVE CHANGES The following is a summary of the major Medicaid changes enacted as part of the Omnibus Budget Reconciliation Act of 1990 (OBRA 1990), Public Law 101-508: 1. Reimbursement for prescribed drugs.--The law requires manufacturers of prescription drugs to provide rebates to State Medicaid programs. States will be required to cover all the drugs manufactured by a firm entering into a rebate agreement. The minimum rebate is 10 percent of the average manufacturer price for the product. Beginning in 1993, States are required to have prospective (i.e., point-of-sale) and retrospective drug utilization review (DUR) programs, to assure that prescriptions are appropriate and medically necessary. Until the end of 1993, enhanced Federal matching payments are provided for State administrative costs related to the rebate and DUR programs. The law establishes a 4-year moratorium on reductions in most payment rates for pharmacists. 2. Required payment of premiums and cost-sharing for enrollment under group health plans where cost-effective.-- Effective January 1, 1991, the law requires States to pay premiums for group health plans for which Medicaid beneficiaries are eligible, when it is cost-effective to do so. Guidelines for determining cost-effectiveness are to be issued by the Secretary. States will pay any cost-sharing required by a plan and continue to furnish any Medicaid benefits not covered under the plan. Providers under group health plans will be required to accept plan payment as payment in full for Medicaid enrollees. 3. Protection of low-income Medicare beneficiaries.--The law accelerates phase-in of the requirement that States pay Medicare premiums and cost-sharing for QMBs, Medicare beneficiaries with incomes below 100 percent of the Federal poverty level; for all but 5 States, the requirement was effective January 1, 1991. All States must pay part B premiums (but not part A premiums or cost-sharing) for beneficiaries with incomes below 110 percent of the poverty level in 1993 and below 120 percent in 1995. 4. Child health provisions.--Effective July 1, 1991, all States are required to cover children under age 19 who were born after September 30, 1983, and whose family income is below 100 percent of the Federal poverty level. States are required to accept Medicaid applications for mothers and children at locations other than welfare offices, and are required to continue benefits for pregnant women until 2 months after the end of the pregnancy, and for infants through the first year of life. States are required to make additional payments for outlier cases and are prohibited from imposing durational limits on coverage for patients who are under age 1 in any hospital or under age 6 in a disproportionate share hospital. 5. Home and community-based care as optional service.--The law permits States to provide home and community-based services to functionally disabled Medicaid beneficiaries aged 65 or over, effective the later of July 1, 1991, or 30 days after the publication of interim rules. States will be permitted to limit eligibility for the services without waivers and thus to provide the services without meeting cost-effectiveness tests. Federal matching payments cannot exceed 50 percent of what it would have cost to provide Medicare nursing facility care to the same group of beneficiaries. Total Federal expenditures will be limited to $580 million over the period fiscal years 1991 to 1995. 6. Community supported living arrangements.--The law permits between two and eight States to provide community supported living arrangement services to developmentally disabled individuals who live with their families or in small community residential settings, effective the later of July 1, 1991, or 30 days after the publication of interim rules. Services will include personal assistance, training and habilitation, and other services needed to help with activities of daily living. Total Federal expenditures will be limited to $100 million over the period fiscal years 1991 to 1995. 7. Payments for COBRA continuation coverage.--The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA, Public Law 99-272) provides that employees or dependents leaving an employee health insurance group in a firm with 20 or more employees must be offered an opportunity to continue buying insurance through the group for 18 to 36 months (depending on the reason for leaving the group). OBRA 1990 permits State Medicaid programs to pay for COBRA continuation coverage, when it is cost effective to do so, effective January 1, 1991. States may pay premiums for individuals with incomes below 100 percent of poverty and resources less than twice the SSI limit who are eligible for continuation coverage under a group health plan offered by an employer with 75 or more employees. 8. Miscellaneous.--The law establishes demonstration projects in three to four States to test the effect of providing Medicaid to families with incomes below 150 percent of the Federal poverty level that do not meet categorical eligibility requirements, and projects in two States to provide Medicaid coverage for early intervention services for HIV- infected individuals who do not meet disability criteria. The law also includes new measures to ensure the quality of physician services under Medicaid, technical corrections in nursing home reform provisions, and numerous other technical and miscellaneous amendments. The following is a summary of the major changes enacted in the Medicaid Voluntary Contribution and Provider-Specific Tax Amendments of 1991, Public Law 102-234. 1. Voluntary contributions and provider-specific taxes.-- The law caps Federal matching payments for State Medicaid spending that is financed with revenues from provider donations or taxes. Generally effective January 1, 1992, before the Federal share is computed, a State's expenditures for Medicaid are reduced by revenues received by a State or local government from provider-related donations, and health care related taxes that are not broad based. Broad based taxes are those that are uniformly imposed on all providers in a class, or all business in a class furnished by the providers. States with non-broad based taxes in effect or approved as of November 22, 1991, are permitted to continue them temporarily, but the taxes may not be increased. States with voluntary contribution programs in effect or reported as of September 30, 1991, for States' fiscal year 1992, may continue them temporarily but may not increase them. During fiscal year 1993-95, Federal matching funds for revenue from voluntary contributions, provider specific taxes, and broad based taxes will be limited to the greater of 25 percent of the State share of Medicaid expenditures or the amount of donations and taxes collected in the State in fiscal year 1992. Federal matching funds are allowable for certain donations. These are bona fide provider donations that are not related to Medicaid payments to the provider, and donations in the form of payment for outstationing Medicaid eligibility workers. Beginning in fiscal year 1993, the latter type of donations will be limited to 10 percent of a State's Medicaid administrative costs. 2. Payments for disproportionate share hospitals.--The law places an aggregate national cap of 12 percent of Medicaid expenditures on payment adjustments for disproportionate share hospitals (DSH). Beginning with fiscal year 1993, a national DSH payment limit is projected, and each State receives a DSH allotment for the fiscal year; Federal matching payments will be denied for DSH payments that exceed a State's annual allotment. For the part of fiscal year 1992 beginning on or after January 1, 1992, Federal matching payments will be made only for DSH adjustments paid in accordance with a State plan in effect or submitted by September 30, 1991, or November 26, 1991, if the State has used specific criteria to designate a hospital as DSH. Higher payments are permitted if necessary to meet the minimum adjustments required by Medicaid law. Two 1991 acts concern enrollment in two health maintenance organizations. The law specifies that no more than 75 percent of the enrollees of an HMO may be Medicaid or Medicare beneficiaries. Public Law 102-276 authorized a waiver of this requirement for the Dayton Area Health Plan. Public Law 102-317 authorized a similar waiver for the Tennessee Primary Care Network. The following is a summary of major Medicaid changes enacted in the Veterans Health Care Act of 1992, Public Law 102-585, pertaining to Medicaid reimbursement policies for prescription drugs. 1. Calculation of best price.--The law excludes certain prices from calculation of best price (the lowest price available from a manufacturer) for Medicaid drug rebates. The law excludes the prices charged to the Indian Health Service, the Department of Veterans Affairs, veterans' State homes, the Department of Defense, the Public Health Service and certain private and nonprofit hospitals, as well as any prices charged under the Federal Supply Schedule of the General Services Administration or under State pharmaceutical assistance programs. 2. Rebate amounts.--The law changes the minimum basic rebates for brand name drugs to 15.7 percent of the average manufacturer price (AMP) in calendar year 1993, 15.4 percent of the AMP in 1994, 15.2 percent of the AMP in 1995, and 15.1 percent of the AMP thereafter. In each calendar year, the basic rebate is the greater of the percentage stated, or the difference between the AMP and the best price. The following is a summary of major Medicaid changes enacted in the Omnibus Budget Reconciliation Act of 1993 (OBRA 93), Public Law 103-66. 1. Medicaid Fraud Control Units.--The law changed the State option to a requirement that each State operate a Medicaid fraud and abuse control unit unless the State demonstrates that effective operation of a unit would not be cost-effective and that, in the absence of a unit, beneficiaries will be protected from abuse and neglect. 2. Prescription drug formularies.--States have been prohibited from using drug formularies (lists of covered and excluded drug products) and from imposing restrictions on new drug products for 6 months after a drug is approved by the Food and Drug Administration. Effective October 1, 1993, OBRA 93 allows States to use formularies to cover only the State's designated drug(s) in a class of therapeutic alternatives and impose certain requirements on prescriptions for new drugs. 3. Asset and trust provisions.--Some individuals must spend their assets down to a State-established level before Medicaid pays for nursing facility and other medical care. To try to ensure that these persons apply their assets to the cost of their care and do not give them away in order to gain Medicaid eligibility sooner than they otherwise would, Medicaid prohibits persons from transferring assets for less than fair market value. OBRA 93 amends Medicaid law to close ``loopholes'' that allow individuals to shelter or divest assets in order to become eligible for Medicaid-covered long-term care. States are required to provide for a delay in Medicaid eligibility for institutionalized persons or their spouses who dispose of assets for less than fair market value. A transfer that occurred during the 36-month period prior to an application for coverage would trigger a period of ineligibility beginning with the month the assets were transferred. Under the OBRA 93 amendments, the period of ineligibility is determined by comparing the cost of care and the fair market value of the assets transferred. The law requires that States seek recovery of Medicaid expenditures from the estate of a deceased beneficiary who received certain Medicaid benefits. Amounts paid by Medicaid for nursing facility services, home and community-based care, and related hospital and prescription drug services must be recovered from the estates of individuals who were over age 55 when such services were received. OBRA 93 provides for exemptions to these asset transfer and recovery provisions if application of the law would result in ``undue hardship'' according to criteria established by the Secretary. 4. Child support enforcement.--A child who is covered by Medicaid may also be covered by private health insurance that is carried by a noncustodial parent. To improve medical support for children, Medicaid law is amended to mandate that States have laws in effect to require the cooperation of employers and insurers in obtaining parental coverage. 5. Disproportionate share hospitals (DSH).--OBRA 93 law prohibits States from designating a hospital as a DSH unless Medicaid beneficiaries account for at least 1 percent of the hospital's impatient days. In addition, the law requires that DSH payments to a State or locally owned or operated facility cannot exceed the costs the facility incurs in furnishing inpatient or outpatient service to Medicaid beneficiaries or uninsured patients. For this purpose, a facility's cost is net of payments received from Medicaid (other than DSH payments) and from uninsured individuals. 6. Physician referral.--OBRA 93 limits Medicaid payments for designated health services (including clinical laboratory, physical and occupational therapy, radiology, or other diagnostic services, home health and other services) if such services are furnished upon referral from a physician who has a specified financial relationship with the provider furnishing the service. 7. Childhood immunization.--OBRA 93 established a new entitlement program under which States are entitled to receive vaccines purchased by the Federal government for federally eligible children up to age 18. Providers registered in a State's immunization program are entitled to receive free vaccines for children covered under the new law. Children eligible to receive federally-purchased vaccines are Medicaid- eligible, American Indian or Alaska Native, children whose health insurance does not cover the cost of vaccines, and children who receive immunization at federally qualified health centers or rural health clinics. 8. Tuberculosis-related services.--OBRA 93 permits States to provide Medicaid coverage for outpatient tuberculosis- related services to tuberculosis-infected individuals who meet the income and resource limits that apply to disabled persons. PROGRAM DATA Under current law, Federal Medicaid outlays are projected to reach $96.2 billion in fiscal year 1995, a 12 percent increase over the $85.8 billion projected for fiscal year 1994. Medicaid program data are presented in the following tables 18- 13 to 18-24. TABLE 18-13.--HISTORY OF MEDICAID PROGRAM COSTS ---------------------------------------------------------------------------------------------------------------- Total Federal State -------------------------------------------------------------------------------------- Fiscal year Dollars (in Percent Dollars (in Percent Dollars (in Percent millions) increase millions) increase millions) increase ---------------------------------------------------------------------------------------------------------------- 1966\1\.................. 1,658 ........... 789 ........... 869 ........... 1967\1\.................. 2,368 42.8 1,209 53.2 1,159 33.4 1968\1\.................. 3,686 55.7 1,837 51.9 1,849 59.5 1969\1\.................. 4,166 13.0 2,276 23.9 1,890 2.2 1970\1\.................. 4,852 16.5 2,617 15.0 2,235 18.3 1971..................... 6,176 27.3 3,374 28.9 2,802 25.4 1972\2\.................. 8,434 36.6 4,361 29.3 4,074 45.4 1973..................... 9,111 8.0 4,998 14.6 4,113 1.0 1974..................... 10,229 12.3 5,833 16.7 4,396 6.9 1975..................... 12,637 23.5 7,060 21.0 5,578 26.9 1976..................... 14,644 15.9 8,312 17.7 6,332 13.5 TQ\3\.................... 4,106 NA 2,354 NA 1,752 NA 1977..................... 17,103 \4\16.8 9,713 \4\16.9 7,389 \4\16.7 1978..................... 18,949 10.8 10,680 10.0 8,269 11.9 1979..................... 21,755 14.8 12,267 14.9 9,489 14.8 1980..................... 25,781 18.5 14,550 18.6 11,231 18.4 1981..................... 30,377 17.8 17,074 17.3 13,303 18.4 1982..................... 32,446 6.8 17,514 2.6 14,931 12.2 1983..................... 34,956 7.7 18,985 8.4 15,971 7.0 1984..................... 37,569 7.5 20,061 5.7 17,508 9.6 1985\5\.................. 40,917 8.9 \6\22,655 12.9 \6\18,262 4.3 1986..................... 44,851 9.6 24,995 10.3 19,856 8.7 1987..................... 49,344 10.0 27,435 9.8 21,909 10.3 1988..................... 54,116 9.7 30,462 11.0 23,654 8.0 1989..................... 61,246 13.2 34,604 13.6 26,642 12.6 1990..................... 72,492 18.4 41,103 18.8 31,389 17.8 1991..................... 91,519 26.2 52,532 27.8 38,987 24.2 1992..................... 118,166 29.1 67,827 29.1 50,339 29.1 1993..................... 132,010 11.7 75,774 11.7 56,236 11.7 1994 (current law estimate)............... 152,371 15.4 87,156 15.0 65,215 16.0 1995 (current law estimate)............... 168,806 10.8 96,388 10.6 72,418 11.0 ---------------------------------------------------------------------------------------------------------------- \1\Includes related programs which are not separately identified, though for each successive year a larger portion of the total represents Medicaid expenditures. As of Jan. 1, 1970, Federal matching was only available under Medicaid. \2\Intermediate care facilities (ICFs) transferred from the cash assistance programs to Medicaid effective January 1, 1972. Data for prior periods do not include these costs. \3\Transitional quarter (beginning of Federal fiscal year moved from July 1 to Oct. 1). \4\Represents increase over fiscal year 1976, i.e., five calendar quarters. \5\Includes transfer of function of State fraud control units to Medicaid from Office of Inspector General. \6\Temporary reductions in Federal payments authorized for fiscal years 1982-84 were discontinued in fiscal year 1985. Note: Totals may not add due to rounding. Source: ``Budget of the U.S. Government'' fiscal years 1969-95, and Health Care Financing Administration, Division of Budget. TABLE 18-14.--UNDUPLICATED NUMBER OF MEDICAID RECIPIENTS BY ELIGIBILITY CATEGORY, FISCAL YEARS 1972-92 [Number in thousands] ---------------------------------------------------------------------------------------------------------------- Adults in Permanent Dependent families Fiscal year Total Aged 65 or Blindness and total children with Other Title over disability under age dependent XIX 21 children ---------------------------------------------------------------------------------------------------------------- 1972.................. 17,606 3,318 108 1,625 7,841 3,137 1,576 1973.................. 19,622 3,496 101 1,804 8,659 4,066 1,495 1974.................. 21,462 3,732 135 2,222 9,478 4,392 1,502 1975.................. 22,007 3,615 109 2,355 9,598 4,529 1,800 1976.................. 22,815 3,612 97 2,572 9,924 4,774 1,836 1977\1\............... 22,832 3,636 92 2,710 9,651 4,785 1,959 1978.................. 21,965 3,376 82 2,636 9,376 4,643 1,852 1979.................. 21,520 3,364 79 2,674 9,106 4,570 1,727 1980\2\............... 21,605 3,440 92 2,819 9,333 4,877 1,499 1981\2\............... 21,980 3,367 86 2,993 9,581 5,187 1,364 1982\2\............... 21,603 3,240 84 2,806 9,563 5,356 1,434 1983\2\............... 21,554 3,371 77 2,844 9,535 5,592 1,129 1984\2\............... 21,607 3,238 79 2,834 9,684 5,600 1,187 1985\2\............... 21,814 3,061 80 2,937 9,757 5,518 1,214 1986\2\............... 22,515 3,140 82 3,100 10,029 5,647 1,362 1987\2\............... 23,109 3,224 85 3,296 10,168 5,599 1,418 1988\2\............... 22,907 3,159 86 3,401 10,037 5,503 1,343 1989\2\............... 23,511 3,132 95 3,496 10,318 5,717 1,175 1990.................. 25,255 3,202 83 3,635 11,220 6,010 1,105 1991.................. 28,280 3,359 85 3,983 13,415 6,778 658 1992.................. 30,926 3,742 84 4,378 15,104 6,954 664 ---------------------------------------------------------------------------------------------------------------- \1\Fiscal Year 1977 began in October 1976 and was the first year of the new Federal fiscal cycle. Before 1977, the fiscal year began in July. \2\Beginning in fiscal year 1980, recipients' categories do not add to the unduplicated total due to the small number of recipients that are in more than one category during the year. Source: HCFA, BDMS, OPS, Division of Medicaid Statistics, Fiscal Years 1972-91, Office of the Actuary, Fiscal years 1993 and beyond. December 22, 1993. TABLE 18-15.--MEDICAID RECIPIENTS BY BASIS OF ELIGIBILITY BY STATE: FISCAL YEAR 1992 ---------------------------------------------------------------------------------------------------------------- Total AFDC AFDC Other State recipients\1\ Aged Blind Disabled children adults Title XIX ---------------------------------------------------------------------------------------------------------------- Alabama................. 466,918 69,882 1,586 100,187 198,418 91,022 4,574 Alaska.................. 57,540 3,388 81 4,633 32,479 16,959 0 Arizona................. 402,212 23,258 693 43,696 236,155 98,410 0 Arkansas................ 320,875 51,489 1,289 67,511 97,549 70,969 32,068 California.............. 4,485,743 491,686 24,306 609,612 2,008,346 1,256,752 60,350 Colorado................ 258,690 30,621 157 34,254 125,026 65,065 3,567 Connecticut............. 316,278 55,102 281 37,836 146,719 76,340 0 Delaware................ 60,696 5,358 105 8,461 31,687, 13,558 1,325 District of Columbia.... 108,514 11,541 5 16,731 55,304 24,812 121 Florida................. 1,537,926 186,180 3,403 204,373 811,973 294,157 37,840 Georgia................. 863,670 99,625 4,722 139,095 412,087 198,838 1,112 Hawaii.................. 99,666 13,817 15 10,239 47,368 26,111 0 Idaho................... 86,924 8,783 52 12,480 44,224 20,758 627 Illinois................ 1,313,140 105,955 1,359 213,951 669,474 303,931 18,470 Indiana................. 506,829 52,433 1,172 70,558 252,765 127,264 0 Iowa.................... 278,828 38,333 619 39,000 116,983 68,277 14,868 Kansas.................. 226,991 25,268 115 27,057, 108,272 53,397 0 Kentucky................ 583,089 61,052 1,924 113,316 257,105 136,641 1,882 Louisiana............... 702,264 96,403 1,797 111,025 345,662 147,377 0 Maine................... 162,441 22,332 207 27,281 69,082 37,367 5,567 Maryland................ 377,075 49,749 306 61,045 182,487 77,702 5,786 Massachusetts........... 686,235 105,314 10,362 122,202 295,507 152,849 0 Michigan................ 1,129,023 84,998 2,212 167,448 565,350 309,015 0 Minnesota............... 406,491 57,801 461 41,697 195,047 99,891 11,594 Mississippi............. 486,861 65,989 1,634 92,784 321,010 3,973 1,471 Missouri................ 554,477 78,916 1,127 76,338 258,573 137,413 2 Montana................. 60,186 8,115 76 12,618 20,690 3,434 13,740 Nebraska................ 150,791 19,939 223 17,612 67,553 31,793 13,671 Nevada.................. 77,525 9,091 415 9,998 36,551 18,840 1,584 New Hampshire........... 71,179 13,882 486 9,442 33,815 13,224 0 New Jersey.............. 697,083 78,663 1,200 107,949 327,381 175,240 0 New Mexico.............. 211,805 14,106 560 25,446 128,312 43,381 0 New York................ 2,557,701 339,784 3,732 370,858 1,141,711 516,124 185,492 North Carolina.......... 785,043 120,599 1,047 91,385 368,882 203,130 0 North Dakota............ 57,068 10,713 28 7,067 24,213 12,488 2,189 Ohio.................... 1,442,289 152,083 957 162,159 777,458 345,594 4,038 Oklahoma................ 360,039 55,955 670 42,863 178,902 80,951 698 Oregon.................. 295,320 29,138 1,190 34,906 150,943 79,143 0 Pennsylvania............ 1,174,779 136,293 942 195,284 562,049 237,670 41,807 Rhode Island............ 213,388 39,660 521 40,936 87,193 43,452 1,629 South Carolina.......... 431,083 72,339 1,812 67,685 198,972 90,212 63 South Dakota............ 64,230 9,751 149 10,045 31,097 13,188 0 Tennessee............... 785,231 93,455 2,574 156,723 367,193 153,950 11,336 Texas................... 2,024,554 265,254 3,921 189,471 1,100,136 465,772 0 Utah.................... 137,264 8,814 117 14,305 72,860 39,726 24 Vermont................. 77,502 10,643 94 10,546 34,342 21,058 455 Virginia................ 515,064 78,411 1,146 76,752 244,340 114,415 0 Washington.............. 568,673 50,639 365 81,049 232,246 156,546 46,259 West Virginia........... 308,034 31,609 272 49,168 131,024 93,117 2,844 Wisconsin............... 440,136 66,845 1,189 87,560 161,587 78,107 40,657 Wyoming................. 42,401 3,086 8 3,890 23,523 11,023 570 Puerto Rico............. 885,405 127,011 469 48,779 709,146 0 0 Virgin Islands.......... 13,221 1,143 6 889 7,265 3,403 515 --------------------------------------------------------------------------------------- United States..... 30,027,764 3,614,140 83,684 4,328,527 14,387,625 6,950,426 568,280 All jurisdictions. 30,926,390 3,742,294 84,159 4,378,195 15,104,036 6,953,829 568,795 ---------------------------------------------------------------------------------------------------------------- \1\Total recipients include unknowns which are not reflected in this table. Source: HCFA, BDMS, Office of Programs Systems, data from Division of Medicaid Statistics December 22, 1993. TABLE 18-16.--MEDICAID EXPENDITURES BY BASIS OF ELIGIBILITY BY STATE: FISCAL YEAR 1992 [In millions of dollars] -------------------------------------------------------------------------------------------------------------------------------------------------------- Aged, blind and AFDC disabled children State Total Aged Blind Disabled AFDC AFDC Other as a as a expenditures\2\ children adults title XIX percent percent of total of total exp. exp. -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama....................................... 1,056 352 4 392 148 149 9 70.9 14.0 Alaska........................................ 187 37 (\1\) 48 53 48 0 46.0 28.5 Arizona....................................... 209 13 1 63 96 35 0 37.3 45.8 Arkansas...................................... 885 266 6 367 87 85 74 72.2 9.9 California.................................... 8,692 2,251 96 2,983 1,309 1,860 129 61.3 15.1 Colorado...................................... 814 233 4 303 129 128 17 66.4 15.9 Connecticut................................... 1,663 797 4 570 163 129 0 82.4 9.8 Delaware...................................... 219 62 1 96 32 25 3 72.3 14.7 District of Columbia.......................... 499 140 (\1\) 212 92 54 (\1\) 70.7 18.4 Florida....................................... 3,518 1,074 14 1,160 756 457 57 63.9 21.5 Georgia....................................... 2,149 538 28 735 356 471 1 60.6 16.6 Hawaii........................................ 270 112 (\1\) 64 44 48 0 65.4 16.3 Idaho......................................... 275 72 (\1\) 118 42 41 1 69.3 15.4 Illinois...................................... 4,070 872 9 1,995 651 486 56 70.7 16.0 Indiana....................................... 2,225 557 9 930 401 322 0 67.2 18.0 Iowa.......................................... 855 238 2 332 119 133 29 67.0 13.9 Kansas........................................ 620 187 (\1\) 225 100 86 0 66.6 16.2 Kentucky...................................... 1,543 361 8 609 279 279 1 63.3 18.1 Louisiana..................................... 2,479 532 10 972 533 433 0 61.0 21.5 Maine......................................... 642 240 1 235 76 76 13 74.1 11.8 Maryland...................................... 1,612 445 2 644 276 193 52 67.7 17.1 Massachusetts................................. 3,248 1,256 88 1,224 372 308 0 79.1 11.5 Michigan...................................... 2,802 652 10 1,232 459 449 0 67.6 16.4 Minnesota..................................... 1,750 713 6 631 196 183 21 77.1 11.2 Mississippi................................... 881 264 5 317 289 2 4 66.5 32.8 Missouri...................................... 1,350 472 5 461 234 175 (\1\) 69.4 17.3 Montana....................................... 217 77 (\1\) 95 17 5 15 79.6 7.9 Nebraska...................................... 468 168 2 153 63 50 33 69.0 13.4 Nevada........................................ 282 64 3 100 49 52 7 59.4 17.4 New Hampshire................................. 340 167 7 112 33 20 0 84.2 9.8 New Jersey.................................... 2,802 912 8 1,163 311 400 0 74.3 11.1 New Mexico.................................... 478 93 4 160 148 73 0 53.8 30.9 New York...................................... 15,281 6,214 102 5,710 1,766 1,207 283 78.7 11.6 North Carolina................................ 2,083 647 9 673 414 341 0 63.8 19.9 North Dakota.................................. 253 99 (\1\) 98 30 22 2 78.2 11.9 Ohio.......................................... 4,308 1,535 4 1,374 853 541 1 67.6 19.8 Oklahoma...................................... 1,004 288 2 299 272 141 1 58.7 27.1 Oregon........................................ 748 201 20 288 137 103 0 68.0 18.3 Pennsylvania.................................. 3,547 1,368 3 1,265 513 345 54 74.3 14.5 Rhode Island.................................. 774 283 3 346 72 64 6 81.6 9.3 South Carolina................................ 1,151 329 6 414 218 184 (\1\) 65.0 19.0 South Dakota.................................. 231 85 1 90 34 20 0 76.3 14.9 Tennessee..................................... 1,735 441 7 646 354 255 32 63.1 20.4 Texas......................................... 4,407 1,402 16 1,228 976 785 0 60.0 22.1 Utah.......................................... 365 64 1 139 72 88 (\1\) 55.8 19.6 Vermont....................................... 222 75 (\1\) 93 22 30 1 75.6 10.1 Virginia...................................... 1,511 486 6 525 273 222 0 67.3 18.0 Washington.................................... 1,347 420 2 423 184 286 32 62.7 13.6 West Virginia................................. 795 200 1 276 111 175 32 60.0 13.9 Wisconsin..................................... 1,677 663 8 693 124 102 62 81.4 7.4 Wyoming....................................... 114 34 (\1\) 33 26 21 1 58.1 22.6 Puerto Rico................................... 158 23 (\1\) 9 127 0 0 19.9 80.1 Virgin Islands................................ 5 1 (\1\) 1 2 1 (\1\) 35.2 34.6 United States........................... 90,651 29,054 530 33,316 14,363 12,184 1,032 69.4 15.8 All jurisdictions....................... 90,814 29,078 530 33,326 14,491 12,185 1,032 69.3 16.0 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\Denotes expenditures of less than $500,000. \2\Total expenditures include unknowns which are not reflected in this table. Source: HCFA, BDMS, Office of Programs Systems, data from Division of Medicaid Statistics, December 22, 1993. TABLE 18-17.--TOTAL AND PER CAPITA MEDICAID PAYMENTS FOR CATEGORICALLY NEEDY AND MEDICALLY NEEDY, PRELIMINARY ESTIMATES, FISCAL YEARS 1975, 1981 AND 1992 -------------------------------------------------------------------------------------------------------------------------------------------------------- 1975 1981 1992 Percent change ------------------------------------------------------------------------------------------ 1975-92 Total Percent Total Percent Total Percent ------------------ amount of Per amount of Per amount of Per Total Per (millions) total capita (millions) total capita (millions) total capita spending capita -------------------------------------------------------------------------------------------------------------------------------------------------------- Categorically needy: Receiving cash payments................ $7,188 58.7 $431 $14,534 53.4 $861 $41,742 46.0 $2,238 $480.7 $419.3 Aged............................... 1,341 11.0 555 2,480 9.1 1,270 5,795 6.4 3,778 332.1 580.7 Blind.............................. 61 .5 717 109 .4 1,527 334 0.4 4,669 447.5 551.2 Disabled........................... 2,042 16.7 1,094 5,616 20.6 2,490 19,863 21.9 6,097 872.7 457.3 AFDC children...................... 1,850 15.1 222 3,002 11.0 361 8,376 9.2 891 352.8 301.4 Adults in AFDC families............ 1,895 15.5 478 3,328 12.2 769 7,374 8.1 1,682 289.1 251.9 Not receiving cash payments............ 1,753 14.3 1,261 4,736 17.4 2,641 16,064 17.7 4,243 816.4 236.5 Aged............................... 1,275 10.4 2,331 3,143 11.6 5,273 7,085 7.8 11,658 455.7 400.1 Blind.............................. 12 .1 1,094 19 .1 2,785 80 0.1 15,310 566.7 1,299.5 Disabled........................... 353 2.9 1,854 1,214 4.5 5,146 5,065 5.6 11,913 1,334.8 542.6 AFDC children...................... 61 .5 152 153 .6 302 1,764 1.9 1,156 791.8 660.5 Adults in AFDC families............ 27 .2 144 87 .3 298 1,428 1.6 1,606 5,188.9 1,015.3 Other title XIX.................... 25 .2 463 120 .4 734 643 0.7 1,927 2,472.0 316.2 ------------------------------------------------------------------------------------------------------------ Total, categorically needy....... 8,941 73.0 495 19,270 70.8 1,032 57,807 63.7 2,577 546.5 420.6 ============================================================================================================ Medically needy: Aged................................... 1,742 14.2 2,672 4,303 15.8 5,260 8,927 9.8 11,724 412.5 338.8 Blind.................................. 20 .2 1,472 27 .1 3,132 71 0.1 21,865 255.0 940.0 Disabled............................... 657 5.4 2,202 2,471 9.1 4,924 5,243 5.8 13,876 698.0 530.2 AFDC children.......................... 274 2.2 324 353 1.3 460 1,592 1.8 943 481.0 191.0 Adults in AFDC families................ 140 1.1 368 348 1.3 613 1,265 1.4 1,930 803.6 424.5 Other title XIX........................ 467 3.8 267 433 1.6 360 268 0.3 1,844 -42.6 590.6 ------------------------------------------------------------------------------------------------------------ Total, medically needy............... 3,301 27.0 838 7,935 29.2 2,145 17,367 19.1 4,782 426.1 470.6 ============================================================================================================ Grand total.......................... 12,242 100.0 556 27,205 100.0 1,216 90,814 100.0 2,936 641.8 428.1 -------------------------------------------------------------------------------------------------------------------------------------------------------- Note: Totals may not add due to rounding. Fiscal year 1975 ends in June; fiscal years 1981 and 1988 end in September. Total includes other coverage groups and unknowns. Other categories not shown in the total for 1991 are: Other coverage pre-88, $6,799; coverage from 88, $4,070; and mass unknown, $220. Source: HCFA, BDMS, OPS. Division of Medicaid Statistics, December 22, 1993. TABLE 18-18.--MEDICAID RECIPIENTS AND PAYMENTS BY BASIS OF ELIGIBILITY, FISCAL YEAR 1992 ---------------------------------------------------------------------------------------------------------------- Percent Recipients Percent Amount (in of (in of Per capita millions) total thousands) total payments ---------------------------------------------------------------------------------------------------------------- Age 65 and over........................................ 29,077.6 32.0 3,742.3 12.1 7,770.0 Blind.................................................. 530.0 0.6 84.2 0.3 6,297.7 Disabled............................................... 33,325.8 36.7 4,378.2 14.2 7,611.8 Dependent children under age 21........................ 14,491.0 16.0 15,104.0 48.8 959.4 Adults in families with dependent children............. 12,185.2 13.4 6,953.8 22.5 1,752.3 Other title XIX........................................ 1,031.9 1.1 568.8 1.8 1,814.3 -------------------------------------------------------- Total............................................ 90,813.5 100.0 30,926.4 100.0 2,936.4 ---------------------------------------------------------------------------------------------------------------- Note: Recipients and payments totals include unknowns which are not shown in this table. Source: HCFA, BDMS, Office of Programs Systems. Data from Division of Medicaid Statistics, December 22, 1993. TABLE 18-19.--MEDICAID PAYMENTS AND PER CAPITA PAYMENTS BY BASIS OF ELIGIBILITY, FISCAL YEARS 1975, 1981, AND 1984-92 [Amounts in millions of dollars] -------------------------------------------------------------------------------------------------------------------------------------------------------- Percent 1975 1981 1984 1985 1986 1987 1988 1989 1990 1991 1992 change, 1975-92 -------------------------------------------------------------------------------------------------------------------------------------------------------- In Nominal Dollars Payments: Age 65 and over....................... 4,358 9,926 12,815 14,096 15,097 16,037 17,135 18,558 21,508 25,453 29,078 567.3 Blind................................. 93 154 219 249 277 309 344 409 434 475 530 47.6 Disabled.............................. 3,052 9,301 11,758 13,203 14,635 16,507 18,250 20,476 23,969 27,798 33,326 991.8 Dependent children under age 21....... 2,186 3,508 3,979 4,414 5,135 5,508 5,848 6,892 9,100 11,690 14,491 562.9 Adults in families with dependent children............................. 2,062 3,763 4,420 4,746 4,880 5,592 5,883 6,897 8,590 10,439 12,185 491.0 Other title XIX....................... 492 552 700 798 980 1,078 1,198 1,137 1,051 973 1,032 109.9 ------------------------------------------------------------------------------------------------------------- Total............................... 12,242 27,204 33,891 37,508 41,005 45,050 48,710 54,500 64,859 77,048 90,814 641.8 Per capita payment: Age 65 and over....................... 1,205 2,948 3,957 4,605 4,808 4,975 5,425 5,926 6,717 7,577 7,770 544.6 Blind................................. 850 1,784 2,766 3,104 3,401 3,644 4,005 4,319 5,212 5,572 6,298 641.0 Disabled.............................. 1,296 3,108 4,149 4,496 4,721 5,008 5,366 5,858 6,595 6,979 7,612 487.3 Dependent children under age 21....... 228 366 411 452 512 542 583 668 811 871 959 321.2 Adults in families with dependent children............................. 455 725 789 860 864 999 1,069 1,206 1,429 1,540 1,752 248.9 Other title XIX....................... 273 405 590 658 719 761 891 967 1,062 1,732 1,814 564.2 Total, per capita payment........... 556 1,238 1,569 1,719 1,821 1,949 2,126 2,318 2,568 2,725 2,936 427.9 ============================================================================================================= In Constant 1992 Dollars Payments: Age 65 and over....................... 11,723 15,584 17,300 18,466 19,173 19,886 20,391 21,156 23,229 26,217 29,078 148.0 Blind................................. 250 242 296 326 352 383 409 466 469 489 530 112.0 Disabled.............................. 8,210 14,603 15,873 17,296 18,586 20,469 21,718 23,343 25,887 28,632 33,326 305.9 Dependent children under age 21....... 5,880 5,508 5,372 5,782 6,521 6,830 6,959 7,857 9,828 12,041 14,491 146.4 Adults in families with dependent children............................. 5,547 5,908 5,967 6,217 6,198 6,934 7,001 7,863 9,277 10,752 12,185 119.7 Other title XIX....................... 1,323 867 945 1,045 1,245 1,337 1,426 1,296 1,135 1,002 1,032 -22.0 ------------------------------------------------------------------------------------------------------------- Total\1\............................ 32,931 42,710 45,753 49,135 52,076 55,862 57,965 62,130 70,048 79,359 90,814 175.8 Per capita payment: Age 65 and over....................... 3,241 4,628 5,342 6,033 6,106 6,169 6,456 6,756 7,254 7,804 7,770 139.7 Blind................................. 2,287 2,801 3,734 4,066 4,319 4,519 4,766 4,924 5,629 5,739 6,298 173.4 Disabled.............................. 3,486 4,880 5,601 5,890 5,996 6,210 6,386 6,678 7,123 7,188 7,612 118.4 Dependent children under age 21....... 613 575 555 592 650 672 694 762 876 897 959 56.4 Adults in families with dependent children............................. 1,224 1,338 1,065 1,127 1,097 1,239 1,272 1,375 1,543 1,586 1,752 43.1 Other title XIX....................... 734 636 797 862 913 944 1,060 1,102 1,147 1,784 1,814 147.1 ------------------------------------------------------------------------------------------------------------- Total, per capita payment........... 1,496 1,944 2,118 2,252 2,313 2,417 2,530 2,643 2,773 2,807 2,936 96.3 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\Data exclude unknowns. Note: Total may not add due to rounding. Fiscal year 1975 ends in June; all other fiscal years end in September. Nominal dollars converted to constant dollars using CPI-U price index. Total expenditures includes other coverage groups and unknowns for fiscal year 1992. Source: HCFA, BDMS, OPS, Division of Medicaid Statistics, December, 1993, and Congressional Research Service. TABLE 18-20.--MEDICAID PAYMENTS BY SERVICE CATEGORY, FISCAL YEARS 1975, 1981, 1990-92 [Amounts in millions of constant 1990 dollars] ---------------------------------------------------------------------------------------------------------------- 1975 1981 1990 1992 Average -------------------------------------------------------------------------------- annual percent Amount Percent Amount Percent Amount Percent Amount Percent change of total 1975-92 ---------------------------------------------------------------------------------------------------------------- Inpatient hospital.... $9,396 30.9 $11,693 29.7 $18,388 28.4 $23,743 28.3 5.6 General........... 8,389 27.6 10,423 26.4 16,674 25.7 21,715 25.9 5.8 Mental............ 1,007 3.3 1,271 3.2 1,714 2.6 2,029 2.4 4.2 Skilled nursing facilities........... \1\6,052 19.9 5,846 14.8 8,026 12.4 21,752 25.9 7.8 Intermediate care facilities........... 5,632 18.5 10,870 27.6 17,021 26.2 (\1\) (\1\) (\1\) Intermediate care facilities for the mentally retarded......... 945 3.1 4,341 11.0 7,354 11.3 7,853 9.4 2.0 Other............. 4,687 15.4 6,530 16.6 9,667 14.9 (\1\) ........ (\1\) Physician............. 3,046 10.0 3,044 7.7 4,018 6.2 5,638 6.7 3.7 Dental................ 843 2.8 787 2.0 593 0.9 786 0.9 -0.4 Other practitioner.... 316 1.0 330 0.8 372 0.6 497 0.6 2.7 Outpatient hospital... 927 3.0 2,041 5.2 3,324 5.1 4,877 5.8 10.3 Clinic................ 967 3.2 540 1.4 1,688 2.6 2,604 3.1 6.0 Lab and X-ray......... 313 1.0 213 0.5 721 1.1 956 1.1 6.8 Home health........... 174 0.6 620 1.6 3,404 5.2 4,514 5.4 21.1 Prescribed drugs...... 2,026 6.7 2,224 5.6 4,420 6.8 6,250 7.4 6.9 Family planning....... 167 0.5 201 0.5 265 0.4 462 0.6 6.2 Early and periodic screening\2\......... (\2\) 0.0 97 0.2 198 0.3 478 0.6 (\1\) Rural health clinic\2\ (\2\) 0.0 6 0.0 34 0.1 125 0.1 (\1\) Other................. 579 1.9 897 2.3 2,385 3.7 3,317 4.0 10.8 ----------------------------------------------------------------------------------------- Total........... 30,440 100.0 39,414 100.0 64,859 100.0 83,904 100 6.1 ---------------------------------------------------------------------------------------------------------------- \1\Prior to fiscal year 1991, there were two categories of Medicaid nursing home care: skilled nursing facilities or intermediate nursing facilities. \2\1975 data not available. Note: Totals may not add due to rounding. Fiscal year 1975 ends in June; all other fiscal years end in September. Spending amounts put in constant dollars using the Consumer Price Index (CPI-U). Data exclude unknowns. Source: HCFA, BDMS, Office of Programs Systems. Data from Division of Medicaid Statistics. December 22, 1993. TABLE 18-21.--MEDICAID RECIPIENTS BY SERVICE CATEGORY, FOR FISCAL YEARS 1975, 1981, 1989-92 [In thousands] ---------------------------------------------------------------------------------------------------------------- Fiscal year-- ----------------------------------------------------- 1975 1981 1989 1990 1991 1992 ---------------------------------------------------------------------------------------------------------------- Inpatient hospital: General............................................... 3,432 3,703 4,171 4,593 5,137 5,768 Mental................................................ 67 90 90 92 5,072 77 Nursing facilities\1\..................................... 1,312 1,385 1,452 1,461 1,499 1,573 Intermediate care facilities for the mentally retarded.... 69 151 148 147 146 151 Physician................................................. 15,198 14,403 15,686 17,078 19,321 21,627 Dental.................................................... 3,944 5,173 4,214 4,552 5,209 5,700 Other practitioner........................................ 2,673 3,582 3,555 3,873 4,282 4,711 Outpatient hospital....................................... 7,437 10,018 11,344 12,370 14,137 15,120 Clinic.................................................... 1,086 1,755 2,391 2,804 3,511 4,115 Laboratory & X ray........................................ 4,738 3,822 7,759 8,959 10,505 11,804 Home health............................................... 343 402 609 719 813 925 Prescribed drugs.......................................... 14,155 14,256 15,916 17,294 19,602 22,030 Family planning........................................... 1,217 1,473 1,564 1,752 2,185 2,550 Early and periodic screening.............................. (\2\) 1,969 2,524 2,952 3,957 4,982 Rural health clinics...................................... (\2\) 81 166 224 405 743 Other..................................................... 2,911 2,344 4,583 5,126 5,957 6,702 ----------------------------------------------------- Unduplicated total.................................. 22,007 21,980 23,511 25,255 28,280 30,926 ---------------------------------------------------------------------------------------------------------------- \1\Prior to fiscal year 1991, there were 2 categories of Medicaid nursing home care: skilled nursing facilities or intermediate nursing facilities. \2\1975 data not available. Source: HCFA, BDMS, Office of Programs Systems, Division of Medicaid Statistics, December 1993. TABLE 18-22.--MEDICAID MEDICAL VENDOR PAYMENTS BY BASIS OF ELIGIBILITY AND TYPE OF SERVICE: FISCAL YEAR 1992 ---------------------------------------------------------------------------------------------------------------- AFDC Type of service Aged Blind Disabled -------------------------- Other title Total Children Adults XIX ---------------------------------------------------------------------------------------------------------------- [In millions of dollars] Inpatient hospital services............ 1,869.9 86.1 8,927.4 6,554.6 5,480.8 466.1 23,384.9 Mental hospital services for the aged................ 908.5 .4 57.2 2.5 1.9 2.5 973.0 SNF/ICF mental health services for the aged................ 114.4 .0 5.1 0 0 0 119.5 Inpatient psychiatric services, age <22... .3 .4 344.9 617.4 11.4 126.9 1,101.3 Intermediate care facility for the mentally retarded... 519.6 130.9 7,837.9 37.6 14.2 4.7 8,545.0 Nursing facility services............ 19,596.5 107.5 3,762.0 15.1 45.7 8.3 23,535.0 Physician's services. 399.6 24.1 1,485.0 1,946.9 2,138.9 94.1 6,088.5 Dental services...... 52.0 1.6 133.2 417.0 225.3 21.8 850.8 Other practitioners' services............ 66.1 2.6 199.3 136.7 126.0 7.1 537.8 Outpatient hospital services............ 310.8 19.4 1,600.9 1,736.1 1,521.3 84.4 5,272.8 Clinic services...... 174.1 18.0 1,555.6 572.5 414.8 79.0 2,814.0 Home health services. 2,249.6 55.1 2,383.7 121.4 55.5 19.6 4,885.0 Family planning services............ 1.1 .5 25.8 57.3 408.5 6.6 499.7 Lab and x ray services............ 53.1 4.0 310.6 221.6 432.0 11.3 1,032.7 Prescribed drugs..... 2,190.9 48.9 2,873.7 806.3 805.2 37.0 6,762.0 Early and periodic screening........... .1 .3 36.2 449.1 16.8 13.5 516.0 Rural health clinic services............ 4.4 .3 20.1 61.0 46.8 1.8 134.4 Other care........... 565.8 30.1 1,764.8 737.5 440.0 47.0 3,585.1 Unknown.............. .9 0 2.7 .4 .1 0 4.1 ------------------------------------------------------------------------------------------ Total.......... 29,077.6 530.0 33,325.8 14,491.0 12,185.2 1,031.9 90,641.6 [In percent] Inpatient hospital services............ 6.4 16.2 26.8 45.2 45.0 45.2 25.8 Mental hospital services for the aged................ 3.1 .1 .2 0 0 .2 1.1 SNF/ICF mental health services for the aged................ .4 0 0 0 0 0 .1 Inpatient psychiatric services, age <22... 0 .1 1.0 4.3 .1 12.3 1.2 Intermediate care facility for the mentally retarded... 1.8 24.7 23.5 .3 .1 .5 9.4 Nursing facility services............ 67.4 20.3 11.3 .1 .4 .8 26.0 Physician's services. 1.4 4.5 4.5 13.4 17.6 9.1 6.7 Dental services...... .2 .3 .4 2.9 1.8 2.1 .9 Other practitioners' services............ .2 .5 .6 .9 1.0 .7 .6 Outpatient hospital services............ 1.1 3.7 4.8 12.0 12.5 8.2 5.8 Clinic services...... .6 3.4 4.7 4.0 3.4 7.7 3.1 Home health services. 7.7 10.4 7.2 .8 .5 1.9 5.4 Family planning services............ 0 .1 .1 .4 3.4 .6 .6 Lab and x ray services............ .2 .8 .9 1.5 3.5 1.1 1.1 Prescribed drugs..... 7.5 9.2 8.6 5.6 6.6 3.6 7.5 Early and periodic screening........... 0 .1 .1 3.1 .1 1.3 .6 Rural health clinic services............ 0 .1 .1 .4 .4 .2 .1 Other care........... 1.9 5.7 5.3 5.1 3.6 4.6 4.0 Unknown.............. 0 0 0 0 0 0 0 ------------------------------------------------------------------------------------------ Total.......... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 ---------------------------------------------------------------------------------------------------------------- Source: HCFA, BDMS, Office of Programs Systems. Data from Division of Medicaid Statistics, December 22, 1993. TABLE 18-23.--AVERAGE EXPENDITURE PER RECIPIENT BY BASIS OF ELIGIBILITY BY STATE: FISCAL YEAR 1992 ---------------------------------------------------------------------------------------------------------------- Other State Total Aged Blind Disabled AFDC AFDC title Children Adults XIX ---------------------------------------------------------------------------------------------------------------- United States.............................. $3,019 $8,039 $6,332 $7,697 $998 $1,753 $1,816 ---------------------------------------------------------------- All jurisdictions.......................... 2,936 7,770 6,298 7,612 959 1,752 1,814 ---------------------------------------------------------------- Alabama........................................ 2,262 5,042 2,785 3,915 746 1,636 1,966 Alaska......................................... 3,248 10,934 6,068 10,467 1,640 2,806 0 Arizona........................................ 520 579 1,870 1,446 406 359 0 Arkansas....................................... 2,758 5,163 4,653 5,430 896 1,192 2,320 California..................................... 1,938 4,579 3,959 4,894 652 1,480 2,137 Colorado....................................... 3,145 7,618 25,435 8,845 1,033 1,961 4,691 Connecticut.................................... 5,258 14,458 14,836 15,070 1,111 1,691 0 Delaware....................................... 3,611 11,515 5,914 11,369 1,014 1,842 2,170 District of Columbia........................... 4,595 12,171 5,493 12,658 1,658 2,187 2,603 Florida........................................ 2,288 5,770 4,133 5,676 932 1,553 1,495 Georgia........................................ 2,488 5,405 6,019 5,283 865 2,369 1,106 Hawaii......................................... 2,706 8,115 2,701 6,282 929 1,831 0 Idaho.......................................... 3,159 8,154 6,587 9,481 955 1,979 1,534 Illinois....................................... 3,099 8,233 6,983 9,327 972 1,599 3,045 Indiana........................................ 4,390 10,627 7,635 13,181 1,585 2,531 0 Iowa........................................... 3,065 6,206 3,972 8,522 1,015 1,952 1,981 Kansas......................................... 2,730 7,410 4,076 8,322 928 1,619 0 Kentucky....................................... 2,647 5,908 4,139 5,374 1,085 2,039 582 Louisiana...................................... 3,530 5,514 5,470 8,755 1,541 2,937 0 Maine.......................................... 3,950 10,751 3,918 8,604 1,094 2,044 2,420 Maryland....................................... 4,276 8,942 7,577 10,553 1,512 2,484 9,015 Massachusetts.................................. 4,733 11,925 8,495 10,015 1,259 2,015 0 Michigan....................................... 2,482 7,674 4,345 7,359 811 1,454 0 Minnesota...................................... 4,306 12,339 12,384 15,130 1,007 1,829 1,839 Mississippi.................................... 1,809 4,005 2,870 3,416 899 575 2,754 Missouri....................................... 2,435 5,975 4,149 6,043 906 1,276 333 Montana........................................ 3,599 9,500 3,507 7,543 832 1,564 1,118 Nebraska....................................... 3,103 8,421 7,586 8,710 926 1,560 2,397 Nevada......................................... 3,635 7,035 7,971 10,018 1,343 2,753 4,447 New Hampshire.................................. 4,779 12,040 14,507 11,883 986 1,501 0 New Jersey..................................... 4,019 11,592 6,471 10,776 950 2,281 0 New Mexico..................................... 2,259 6,622 6,847 6,301 1,153 1,682 0 New York....................................... 5,975 18,288 27,316 15,396 1,547 2,338 1,525 North Carolina................................. 2,654 5,368 8,314 7,359 1,121 1,679 0 North Dakota................................... 4,430 9,275 6,169 13,891 1,238 1,765 1,095 Ohio........................................... 2,987 10,090 3,815 8,474 1,098 1,564 340 Oklahoma....................................... 2,788 5,156 3,095 6,976 1,521 1,747 1,022 Oregon......................................... 2,532 6,906 16,468 8,237 905 1,298 0 Pennsylvania................................... 3,019 10,038 3,435 6,477 912 1,451 1,295 Rhode Island................................... 3,628 7,128 5,864 8,458 825 1,480 3,572 South Carolina................................. 2,670 4,549 3,235 6,112 1,097 2,039 2,419 South Dakota................................... 3,597 8,755 3,517 9,006 1,109 1,530 0 Tennessee...................................... 2,210 4,723 2,831 4,121 964 1,655 2,818 Texas.......................................... 2,177 5,284 4,193 6,481 887 1,685 0 Utah........................................... 2,662 7,318 7,532 9,694 985 2,206 4,962 Vermont........................................ 2,863 7,013 4,580 8,792 653 1,428 2,420 Virginia....................................... 2,934 6,204 4,869 6,841 1,116 1,936 0 Washington..................................... 2,368 8,301 4,784 5,214 791 1,825 689 West Virginia.................................. 2,580 6,312 4,433 5,618 844 1,880 11,274 Wisconsin...................................... 3,811 9,922 7,143 7,915 768 1,301 1,533 Wyoming........................................ 2,685 10,894 2,418 8,357 1,093 1,875 1,512 Puerto Rico.................................... 178 178 177 178 178 0 0 Virgin Islands................................. 372 611 86 1,161 234 388 314 ---------------------------------------------------------------------------------------------------------------- Source: HCFA, BDMS, Office Program Systems, Data from Division of Medicaid Statistics, December 22, 1993. TABLE 18-24.--OPTIONAL MEDICAID SERVICES AND NUMBER OF STATES\1\ OFFERING EACH SERVICE AS OF OCTOBER, 1993 ------------------------------------------------------------------------ States States offering offering service to Service service to both Total categorically categorically needy only and medically needy ------------------------------------------------------------------------ Podiatrists' services.......... 14 33 47 Optometrists' services......... 16 35 51 Chiropractors' services........ 7 20 27 Psychologists' services........ 8 23 31 Medical social workers' services...................... 2 5 7 Nurse Anesthetists' services... 11 16 27 Private duty nursing........... 7 20 27 Clinic services................ 17 37 54 Dental services................ 16 34 50 Physical therapy............... 15 30 45 Occupational therapy........... 12 25 37 Speech, hearing and language disorder...................... 16 27 43 Prescribed drugs............... 17 39 56 Dentures....................... 11 30 41 Prosthetic devices............. 18 37 55 Eyeglasses..................... 16 33 49 Diagnostic services............ 9 24 33 Screening services............. 8 23 31 Preventive services............ 7 23 30 Rehabilitative services........ 14 37 51 Services for age 65 or older in mental institution: A. Inpatient hospital services.................. 16 24 40 B. SNF services............ 13 20 33 C. ICF/MR services......... 22 28 50 Inpatient psychiatric services for under age 21.............. 13 28 41 Christian Science nurses....... 3 2 5 Christian Science sanitoria.... 6 9 15 SNF for under age 21........... 23 29 52 Emergency hospital services.... 14 30 44 Personal care services......... 10 22 32 Transportation services........ 16 39 55 Case management services....... 12 33 45 Hospice services............... 10 25 35 Respiratory care services...... 5 11 16 ------------------------------------------------------------------------ \1\Includes the territories. Thus the maximum number is 53. Source: Health Care Financing Administration, Office of Prepaid Health Care, Medicaid Bureau, Office of Intergovernmental Affairs. FEDERAL HOUSING ASSISTANCE\19\ A number of Federal programs administered by the Department of Housing and Urban Development (HUD) and the Farmers Home Administration (FmHA) address the housing needs of lower-income households. Housing assistance has never been provided as an entitlement to all households that qualify for aid. Instead, each year the Congress has appropriated funds for a number of new commitments. Because these commitments generally run from 5 to 50 years, the appropriation is actually spent gradually, over many years. These additional commitments have expanded the pool of available aid, thus increasing the total number of households that can be served. They have also contributed to growth in Federal outlays in the past and have committed the Government to continuing expenditures for many years to come. --------------------------------------------------------------------------- \19\This discussion draws directly from a CBO Study entitled ``Current Housing Problems and Possible Federal Responses,'' December 1988. For this report, CBO has updated all figures with 5 additional years of data. --------------------------------------------------------------------------- This section describes recent trends in the number and mix of new commitments, as well as trends in expenditures. TRENDS IN FEDERAL HOUSING ASSISTANCE The Federal Government has traditionally provided housing aid directly to lower-income households in the form of rental subsidies and mortgage-interest subsidies. Recent legislation, the 1990 Cranston-Gonzalez National Affordable Housing Act (hereafter referred to as the 1990 Housing Act), authorized a new, indirect approach in the form of housing block grants to State and local governments, which may use these funds for various housing assistance activities specified in the law. Over the past decade, both the number of households receiving aid and total federal expenditures have increased each year, but the growth in assisted households has slowed during the 1980s. Types of housing assistance A number of different housing assistance programs have evolved in response to changing housing policy objectives. The primary purpose of housing assistance has always been to improve housing quality and to reduce housing costs for lower- income households. Other goals have included promoting residential construction, expanding housing opportunities for disadvantaged groups and groups with special housing needs, promoting neighborhood preservation and revitalization, increasing homeownership, and, most recently, empowering the poor to become self-sufficient. New housing programs have been developed over time because of shifting priorities among these objectives--as housing- related problems changed--and because of the relatively high federal costs associated with some approaches. Other programs have become inactive in that the Congress stopped appropriating funds for new assistance commitments through them. Because housing programs traditionally have involved multiyear contractual obligations, however, these so-called inactive programs continue to play an important role today by serving a large number of households through commitments for which funds were appropriated some time ago. Traditional rental assistance.--Most Federal housing aid is now targeted to very-low-income renters through the rental assistance programs administered by HUD and the FmHA.\20\ Rental assistance is provided through two basic approaches: (1) project-based aid, which is typically tied to projects specifically produced for lower-income households through new construction or substantial rehabilitation; and (2) household- based subsidies, which permit renters to choose standard housing units in the existing private housing stock. Some funding is also provided each year to modernize units built with federal aid. --------------------------------------------------------------------------- \20\For more detailed description of the various types of programs, see Congressional Research Service, HUD Housing Assistance Programs: Their Current Status, 93-222E (February, 1993); and Congressional Research Service, Housing Assistance in the United States, 91-872E (December 1991). --------------------------------------------------------------------------- Rental assistance programs generally reduce tenants' rent payments to a fixed percentage--currently 30 percent--of their income after certain deductions, with the Government paying the remaining portion of the contract rents. Almost all project-based aid is provided through production-oriented programs, which include the public housing program, the section 8 new construction and substantial rehabilitation program, and the section 236 mortgage-interest- subsidy program--all administered by HUD--and the section 515 mortgage-interest-subsidy program administered by the FmHA.\21\ New commitments are being funded through three of the four--the public housing program, a modified version of the section 8 new construction program for elderly and disabled families only, and the section 515 program. Some assistance has also been funded annually under two small HUD programs authorized in 1983--the rental housing development grants (HoDAG) and the rental rehabilitation block grant programs.\22\ These programs distributed funds through a national competition and by formula, respectively, to units of local government that meet eligibility criteria established by statute. --------------------------------------------------------------------------- \21\A small number of renters continue to receive project-based subsidies through the now inactive section 221(d)(3) below-market interest rate (BMIR) and rent supplement programs. \22\The Housing and Community Development Act of 1987 terminated the HoDAG program at the end of fiscal year 1989, and the 1990 Housing Act repealed the rental rehabilitation block grant program at the end of fiscal year 1991. --------------------------------------------------------------------------- Some project-based aid is also provided through several components of HUD's section 8 existing-housing program, which tie subsidies to specific units in the existing-housing stock, many of which have received other forms of aid or mortgage insurance through HUD. These components--all of which are currently active--include the section 8 loan management set- aside (LMSA) and property disposition (PD) components, which are designed to improve cash flows in selected financially troubled projects that are or were insured by the Federal Housing Administration (FHA); the section 8 conversion assistance component, which subsidizes units that were previously aided through other programs; and the section 8 moderate rehabilitation program, which provides subsidies tied to units that are brought up to standard by the owner.\23\ --------------------------------------------------------------------------- \23\The 1990 Housing Act repealed the section 8 moderate rehabilitation program at the end of fiscal year 1991, except for single-room occupancy units for the homeless. --------------------------------------------------------------------------- Household-based subsidies are provided through two other components of the section 8 existing-housing program--section 8 rental certificates and vouchers. These programs, both of which are currently active, tie aid to households, who choose standard units in the private housing stock. Certificate holders generally must occupy units whose rents at initial occupancy are within guidelines--the so-called fair market rents (FMRs)--established by HUD. Voucher recipients, however, are allowed to occupy units with rents above the HUD guidelines, provided that they pay the difference. Traditional homeowners' assistance.--Each year, the Federal Government also assists some lower- and moderate-income households in becoming homeowners by making long-term commitments to reduce their mortgage interest.\24\ Most of this aid has been provided through the section 502 program administered by the FmHA, which supplies direct mortgage loans at low interest rates roughly equal to the long-term Government borrowing rates or provides guarantees for private loans whose interest rates may not exceed those set by the Department of Veterans Affairs. Many homebuyers, however, receive much deeper subsidies through the interest-credit component of this program, which reduces their effective interest rate to as low as 1 percent. A number of homebuyers have received aid through the section 235 program administered by HUD, which provides interest subsidies for mortgages financed by private lenders. New commitments are now being made only through the section 502 program, but a small number of homeowners continue to receive aid from prior commitments made under the section 235 program.\25\ Both programs generally reduce mortgage payments, property taxes, and insurance costs to a fixed percentage of income, ranging from 20 percent for the FmHA program to 28 percent for the latest commitments made under the HUD program. Households with relatively low incomes generally would have to pay larger shares, however, since mortgage payments must cover a minimum interest rate--currently 1 percent and 4 percent for the FmHA and HUD programs, respectively. Starting in 1991, however, the FmHA may allow some very-low-income households, to defer up to 25 percent of their monthly payments, subject to later repayment. --------------------------------------------------------------------------- \24\In addition, a small number of very-low-income homeowners receive grants or loans each year from the FmHA for housing repairs. \25\The Housing and Community Development Act of 1987 terminated the section 235 program at the end of fiscal year 1989. --------------------------------------------------------------------------- New directions in housing assistance.--The 1990 Housing Act, enacted in November 1990, authorizes several new housing assistance approaches. The major initiatives of the 1990 act are: the HOME investment partnerships block grant program, the homeownership and opportunity for people everywhere (HOPE) program, and the national homeownership trust demonstration. For 1994, funds were appropriated for both the HOME and HOPE programs but not for the homeownership trust demonstration. The HOME investment partnerships program is designed to increase the supply of housing affordable to low-income families through the provision of Federal grants to State and local governments. Funds may be used for tenant-based rental assistance or for acquisition, rehabilitation or, in limited circumstances, construction of both rental and ownership housing. Participating jurisdiction must provide matching contributions for HOME funds--25 percent for funds used for rental assistance or rehabilitation, including substantial rehabilitation; and 30 percent for funds used for new construction. The multifaceted homeownership and opportunity for people everywhere (HOPE) program is designed to increase homeownership opportunities among low-income households, to combine traditional housing assistance programs for certain homeless people with supportive services, and to preserve certain federally assisted rental housing units for low-income use. To increase ownership opportunities, HOPE grants are provided to private nonprofits, cooperatives, public agencies, and instrumentalities to enable low-income households to become owners of units in public and Indian housing and other multifamily or single-family properties that are owned or whose mortgages are held by various Federal agencies, State or local governments, or by the Resolution Trust Corporation. To address the needs of homeless individuals with mental illness, substance abuse problems, or AIDS, the shelter plus care component of HOPE provides funds for section 8-like rental assistance, to be combined with supportive services funded at the State or local level. Finally, to address the potential loss of low-income rental housing projects whose owners are eligible to terminate the low-income use through prepaying their mortgages, HOPE provides funds for incentives to owners not to prepay; to assist residents or other qualified organizations in purchasing the projects; and for vouchers to assist tenants adversely affected by prepayment. The national homeownership trust demonstration is designed to lower the cost of ownership for moderate-income, first-time homebuyers by establishing a trust fund to help buy down the maximum mortgage interest rate on eligible properties to 6 percent. An eligible property would be a single-family residence or cooperative unit for which the mortgage amount does not exceed the limits established for FHA insurance. Trends in commitments for housing assistance Although the Federal Government has been subsidizing the shelter costs of lower-income households since 1937, more than half of all currently outstanding commitments were funded over the past 18 years. Between 1977 and 1994, about 2.7 million net new commitments were funded to aid lower-income renters. Another 1.0 million new commitments were provided in the form of mortgage assistance to lower- and moderate-income homebuyers. Between 1977 and 1983, the number of net new rental commitments funded each year declined steadily, however, from 375,000 to 78,000. Trends have been somewhat erratic since 1983. Over the 18-year period, commitments for new homebuyers generally decreased, ranging from a high of 140,000 in 1980 to a low of less than 24,000 in 1991 (see table 18-25). TABLE 18-25.--NET NEW COMMITMENTS FOR RENTERS AND NEW COMMITMENTS FOR HOMEBUYERS, 1977-94 ---------------------------------------------------------------------------------------------------------------- Net new commitments for renters ---------------------------------------- New Fiscal year New commitments Existing construction Total for housing homebuyers ---------------------------------------------------------------------------------------------------------------- 1977....................................................... 127,581 247,667 375,248 112,234 1978....................................................... 126,472 214,503 340,975 112,214 1979....................................................... 102,669 231,156 333,825 107,871 1980....................................................... 58,402 155,001 213,403 140,564 1981....................................................... 83,520 94,914 178,434 74,636 1982....................................................... 37,818 48,157 85,975 66,711 1983....................................................... 54,071 23,861 77,932 54,550 1984....................................................... 78,648 36,719 115,367 44,409 1985....................................................... 85,741 42,667 128,408 45,387 1986....................................................... 85,476 34,375 119,851 25,479 1987....................................................... 72,788 37,247 110,035 24,132 1988....................................................... 65,295 36,456 101,751 26,200 1989....................................................... 68,858 30,049 98,907 25,264 1990....................................................... 61,309 23,491 84,800 24,968 1991....................................................... 55,900 28,478 84,378 23,879 1992\1\.................................................... 62,595 38,324 100,919 25,690 1993\1\.................................................... 50,593 34,065 84,658 30,982 1994 (estimate)\1\......................................... 64,791 35,861 100,652 42,230 ---------------------------------------------------------------------------------------------------------------- \1\Figures are not adjusted for units for which funds were deobligated because data were unavailable. Note: Net new commitments for renters represent net additions to the available pool of rental aid and are defined as the total number of commitments for which new funds are appropriated in any year. To avoid double- counting, these numbers are adjusted for the number of commitments for which such funds are deobligated or canceled that year (except where noted otherwise); the number of commitments for units converted from one type of assistance to another; in the FmHA Section 515 program, the number of units that receive more than one subsidy; starting in 1985, the number of commitments specifically designed to replace those lost because private owners of assisted housing opt out of the programs or because public housing units are demolished; and, starting in 1989, the number of commitments for units whose section 8 contracts expire. New commitments for homebuyers are defined as the total number of new loans that the FmHA or HUD makes or subsidizes each year. This measure of program activity is meant to indicate how many new homebuyers can be helped each year and is therefore not adjusted to account for homeowners who leave the programs in any year because of mortgage repayments, prepayments, or foreclosures. Thus, it does not represent net additions to the total number of assisted homeowners and therefore cannot be added to net new commitments for renters. Source: Congressional Budget Office based on data provided by the Department of Housing and Urban Development and the Farmers Home Administration. The production-oriented approach in rental programs has been sharply curtailed in recent years in favor of the less costly section 8 existing-housing and voucher programs. Between 1977 and 1982, commitments through programs for new construction and substantial rehabilitation ranged annually from 53 percent to 73 percent of the total; since then, however, they have ranged between 28 percent and 40 percent of all additional rental commitments. The total number of households receiving assistance has increased substantially, from 3.2 million at the beginning of fiscal year 1977 to an estimated 5.8 million at the beginning of fiscal year 1994--an increase of more than 80 percent (see table 27). This increase results largely from net new commitments over the past 18 years, but also from commitments made before 1977 that have been processed during this period. The number of households receiving rental subsidies increased from 2.1 million to 5.0 million. The number of homeowners receiving assistance in a given year rose from less than 1.1 million in 1977 to over 1.2 million in 1983, but then declined steadily to less than 0.8 million by 1994. The latter pattern reflects commitments for newly assisted households being more than offset by loan repayments, prepayments, and foreclosures among previously assisted households, and by sales of 141,000 loans by the FmHA to provide investors. (Although these 141,000 families continued to benefit from these loans, even after the transfer to the private sector, data are not readily available on the attrition of these loans between 1988 and 1994). Thus, the proportion of all assisted households that receives homeownership assistance has declined from 34 percent at the beginning of 1977 to 13 percent at the beginning of 1994. Among rental assistance programs, the shift away from production- oriented programs toward existing housing is reflected in the increasing proportion of renters receiving aid through the latter approach, from 13 percent at the beginning of fiscal year 1977 to 40 percent at the beginning of 1994, with the proportion of renters receiving household-based subsidies increasing from 8 percent to 28 percent. TABLE 18-26.--TOTAL HOUSEHOLDS RECEIVING ASSISTANCE BY TYPE OF SUBSIDY, 1977-94 [Households in thousands] ---------------------------------------------------------------------------------------------------------------- Assisted renters ------------------------------------------------------ Total Existing housing Total assisted assisted ------------------------------ New Total homeowners\1\ homeowners Household Project construction assisted and based based Subtotal renters renters\1\ ---------------------------------------------------------------------------------------------------------------- Beginning of fiscal year: 1977..................... 162 105 268 1,825 2,092 1,071 3,164 1978..................... 297 126 423 1,977 2,400 1,082 3,482 1979..................... 427 175 602 2,052 2,654 1,095 3,749 1980..................... 521 185 707 2,189 2,895 1,112 4,007 1981..................... 599 221 820 2,379 3,012 1,127 4,139 1982..................... 651 194 844 2,559 3,210 1,201 4,411 1983..................... 691 265 955 2,702 3,443 1,226 4,668 1984..................... 728 357 1,086 2,836 3,700 1,219 4,920 1985..................... 749 431 1,180 2,931 3,887 1,193 5,080 1986..................... 797 456 1,253 2,986 3,998 1,176 5,174 1987..................... 893 473 1,366 3,047 4,175 1,126 5,301 1988..................... 956 490 1,446 3,085 4,296 918 5,213 1989..................... 1,025 509 1,534 3,117 4,402 892 5,295 1990..................... 1,090 527 1,616 3,141 4,515 875 5,390 1991..................... 1,137 540 1,678 3,180 4,613 853 5,465 1992..................... 1,166 554 1,721 3,204 4,680 826 5,506 1993..................... 1,326 574 1,900 3,196 4,851 774 5,625 1994..................... 1,392 593 1,985 3,213 5,008 751 5,759 ---------------------------------------------------------------------------------------------------------------- \1\Starting 1988, figures reflect a one-time decrease of 141,000 in the number of assisted homeowners because of asset sales by the FmHA to private investors. Note: Figures for total assisted renters have been adjusted since 1980 to avoid double-counting households receiving more than one subsidy. Source: Congressional Budget Office based on data provided by the Department of Housing and Urban Development and the Farmers Home Administration. BUDGET AUTHORITY AND OUTLAYS FOR HOUSING ASSISTANCE Funding for most additional commitments for housing assistance is provided each year through appropriations of long-term budget authority for subsidies to households and through appropriations of budget authority for grants, direct loans and loan guarantees to public housing agencies, homebuyers, and developers of rental housing. Annual appropriations of new budget authority for housing assistance have been cut dramatically during the 1980s. These cuts reflect four underlying factors: the previously mentioned reduction in the number of newly assisted households; the shift toward cheaper existing-housing assistance; a systematic reduction in the average term of new commitments from more than 24 years in 1977 to about 8 years in 1994; and the changes in the method for financing the construction and modernization of public housing (since 1987) and the construction of housing for the elderly and the disabled (since 1991).\26\ For HUD's programs alone, appropriations of budget authority declined (in 1994 dollars) from a high of $71.5 billion in 1978 to a low of $10.7 billion in 1989 (see table 18-27). The increased levels of budget authority since 1990 reflect for a large part the cost of renewing expiring section 8 contracts. Similarly, new lending authority for FmHA's direct loan and loan guarantee programs decreased (in 1994 dollars) from a high of $7.7 billion in 1979 to a low of $2.1 billion in 1991, increasing somewhat to $3.2 billion in 1994. --------------------------------------------------------------------------- \26\Before 1987, new commitments for the construction and modernization of public housing were financed over periods ranging from 20 to 40 years, with the appropriations for budget authority reflecting both the principal and interest payments for this debt. Starting in 1987, these activities are financed with up-front grants, which reduces their budget authority requirements by between 51 percent and 67 percent. Similarly, prior to 1991, housing for the elderly and the disabled was financed by direct federal loans for the construction, coupled with 20-year-section 8 rental assistance, which helped repay the direct loan. Starting in 1991, the loans have been replaced by grants, which has reduced the amount of budget authority required for annual rental assistance. TABLE 18-27.--NET BUDGET AUTHORITY APPROPRIATED FOR HOUSING AID ADMINISTERED BY HUD, 1977-94 [In millions of current and 1994 dollars] ------------------------------------------------------------------------ Net budget authority ------------------------------- Fiscal year Current dollars 1994 dollars ------------------------------------------------------------------------ 1977.................................... 28,579 67,622 1978.................................... 32,169 71,496 1979.................................... 25,123 51,274 1980.................................... 27,435 50,385 1981.................................... 26,022 43,429 1982.................................... 14,766 23,028 1983.................................... 10,001 14,934 1984.................................... 11,425 16,369 1985.................................... 11,071 15,298 1986.................................... 10,032 13,526 1987.................................... 8,979 11,768 1988.................................... 8,592 10,815 1989.................................... \1\8,879 10,668 1990.................................... \1\10,557 12,084 1991.................................... \1\19,239 20,962 1992.................................... \1\18,855 19,944 1993.................................... \1\20,236 20,773 1994 (estimate)......................... \1\19,371 19,371 ------------------------------------------------------------------------ \1\Includes $99 million, $1,164 million, $8,814 million, $7,585 million, $6,926 million, and $5,278 million for renewing expiring section 8 contracts in 1989, 1990, 1991, 1992, 1993, and 1994 respectively. Note: All figures are net of funding rescissions, exclude reappropriations of funds, but include supplemental appropriations. Totals include funds appropriated for public housing operating subsidies, and, starting in 1992, for HOME and HOPE grants. Excludes budget authority for HUD's section 202 loan fund and for programs administered by the Farmers Home Administration. Source: Congressional Budget Office, based on data provided by the Department of Housing and Urban Development. TABLE 18-28.--OUTLAYS FOR HOUSING AID ADMINISTERED BY HUD, 1977-94 [In millions of current and 1994 dollars] ------------------------------------------------------------------------ Outlays ------------------------- Fiscal year Current 1994 dollars dollars ------------------------------------------------------------------------ 1977.......................................... 2,928 6,924 1978.......................................... 3,592 7,981 1979.......................................... 4,189 8,550 1980.......................................... 5,364 9,852 1981.......................................... 6,733 11,233 1982.......................................... 7,846 12,238 1983.......................................... 9,419 14.065 1984.......................................... 11,000 15,750 1985.......................................... 25,064 34,630 1986.......................................... 12,179 16,420 1987.......................................... 12,509 16,390 1988.......................................... 13,684 17,223 1989.......................................... 14,466 17,381 1990.......................................... 15,690 17,960 1991.......................................... 16,897 18,411 1992.......................................... 18,242 19,200 1993.......................................... 20,487 21,030 1994 (estimate)............................... 21,816 21,810 ------------------------------------------------------------------------ Note: The bulge in outlays in 1985 is caused by a change in the method of financing public housing, which generated close to $14 billion in one-time expenditures. This amount paid off--all at once--the capital cost of public housing construction and modernization activities undertaken between 1974 and 1985, which otherwise would have been paid off over periods of up to 40 years. Because of this one-time expenditure, however, future outlays for public housing will be lower than they would have been otherwise. Source: Congressional Budget Office based on data provided by the Department of Housing and Urban Development. On the other hand, with the continuing increase in the number of households served, total outlays (expenditures on behalf of all households actually receiving aid in a given year) for all of HUD's housing assistance programs combined have risen steadily (in 1994 dollars), from $6.9 billion in fiscal year 1977 to an estimated $21.8 billion in fiscal year 1994, an increase of 215 percent (see table 18-28). Moreover, despite measures to contain costs, and the increase in household contributions from 25 percent to 30 percent of adjusted income, average Federal outlays per unit for all programs combined have generally continued to rise in real terms, from around $2,750 in 1977 to an estimated $4,540 in 1994--an increase of 65 percent (see table 18-29).\27\ --------------------------------------------------------------------------- \27\The change in the method for financing the construction and modernization of public housing caused a large one-time expenditure in 1985, when most of the outstanding debt incurred since 1974 for construction and modernization was paid off (see table 29). Without that bulge in expenditures, average outlays per unit in 1985 would have been about $3,950 in 1994 dollars. --------------------------------------------------------------------------- Several factors have contributed to this growth. First, rents in assisted housing have probably risen faster than the income of assisted households, causing subsidies to rise faster than the inflation index used here--the revised Consumer Price Index, for all urban consumers (CPI-U-X1).\28\ Second, the number of households that occupy units completed under the section 8 new construction program has risen. These recently constructed units require larger subsidies compared with the older units that were built some time ago under the mortgage- interest subsidy programs and the public housing program. Third, the share of households receiving less costly homeownership assistance has decreased. Fourth, housing aid is being targeted toward a poorer segment of the population, requiring larger subsidies per assisted household. --------------------------------------------------------------------------- \28\For example, between 1980 and 1990, the CPI-U-X1 increased 59 percent. Over the same period, median household income of renters and the Consumer Price Index for residential rents increased by 70 percent and 71 percent, respectively, but the maximum rents allowed for section 8 existing-housing rental certificates--the so-called fair market rents--rose 85 percent. TABLE 18-29.--PER UNIT OUTLAYS FOR HOUSING AID ADMINISTERED BY HUD, 1977-94 [In current and 1994 dollars] ------------------------------------------------------------------------ Per unit outlays ------------------------- Fiscal year Current 1994 dollars dollars ------------------------------------------------------------------------ 1977.......................................... 1,160 2,750 1978.......................................... 1,310 2,910 1979.......................................... 1,430 2,910 1980.......................................... 1,750 3,210 1981.......................................... 2,100 3,510 1982.......................................... 2,310 3,600 1983.......................................... 2,600 3,890 1984.......................................... 2,900 4,150 1985.......................................... 6,420 8,870 1986.......................................... 3,040 4,090 1987.......................................... 3,040 3,980 1988.......................................... 3,270 4,110 1989.......................................... 3,390 4,070 1990.......................................... 3,610 4,130 1991.......................................... 3,830 4,180 1992.......................................... 4,060 4,300 1993.......................................... 4,450 4,570 1994 (estimate)............................... 4,540 4,540 ------------------------------------------------------------------------ Note: The peak in outlays per unit in 1985 of $8,870 is attributable to the bulge in 1985 expenditures associated with the change in the method for financing public housing. Without this change, outlays per unit would have amounted to around $3,950 in 1994 dollars. Source: Congressional Budget Office based on data provided by the Department of Housing and Urban Development. SCHOOL LUNCH AND BREAKFAST PROGRAMS The National School Lunch Program (NSLP) and the School Breakfast Program (SBP) provide Federal cash and commodity support to participating public and private schools and nonprofit residential institutions that serve meals to children. Each program has a three-tiered reimbursement system that allows children from households with incomes at or below 130 percent of the poverty line to receive free meals, permits children with incomes between 130 percent and 185 percent of poverty to receive meals at a reduced price, and provides a small subsidy for the meals of children who do not apply for, or whose family income does not qualify them for free or reduced price meals.\29\ Children in AFDC or food stamp families are automatically eligible to receive free breakfast and lunch. An estimated 56 percent of households receiving AFDC also receive free or reduced-price meals.\30\ --------------------------------------------------------------------------- \29\For example, in the 1993-94 school year, the NSLP schools receive Federal cash subsidies of $1.73, $1.33, and $0.17, respectively, for each free, reduced-price, or ``full-price'' lunch served to children from these three income categories. An additional 14 cents worth of commodity assistance is mandated for all lunches. The corresponding levels of Federal subsidies in the SBP are $0.96, $0.66, and $0.19. Additional subsidies are available for ``severe need'' schools, and ``bonus'' commodity assistance is also offered if Federal commodity stocks are available. \30\Other programs that provide nutritional assistance to children include the Child Care Food Program, the Summer Food Service Program, and the Special Milk Program. --------------------------------------------------------------------------- The NSLP provides subsidized lunches to children in most schools. During fiscal year 1993, the average daily participation was 24.8 million students. More than 4.1 billion meals were served at a total Federal program cost of $4.7 billion (see table 18-30). In fiscal year 1993, 93,000 elementary and secondary schools participated in the NSLP. Nearly 44 million children were enrolled in these schools, and 58 percent of these students participated in the program. Just over half of the meals subsidized by the NSLP go to children from lower income families although nearly 90 percent of Federal funding is used for these children's lunches. In fiscal year 1993, 47 percent of the children receiving NSLP lunches received free lunches, 7 percent received reduced-price lunches, and the remaining 46 percent paid full price for their meals. The SBP serves far fewer students than does the NSLP. In fiscal year 1993, the program had an average daily participation of 5.4 million students, with total Federal program costs of $868 million (see table 18-31). The program operated in 55,000 schools, or just over half of the schools participating in the school lunch program. Nearly 27 million children were enrolled in these schools, of whom 20 percent participated in the program. The SBP also differs from the NSLP in that most of the schools that offer the program are in low- income areas, and the children who participate in the program are predominantly from low- and moderate-income families. In fiscal year 1993, 88 percent of the SBP participants received free or reduced-price breakfasts. TABLE 18-30.--THE NATIONAL SCHOOL LUNCH PROGRAM: PARTICIPATION AND FEDERAL COSTS, FISCAL YEARS 1977-93 [Dollars in millions] ---------------------------------------------------------------------------------------------------------------- Participation 9 month average (in millions)\1\ Federal ------------------------------------------ costs in Fiscal year Full- Federal constant Free Reduced- price Total\3\ costs\4\ 1993 meals price meals\2\ dollars meals ---------------------------------------------------------------------------------------------------------------- 1977............................................. 10.5 1.3 14.5 26.3 $2,111.1 $5,066.6 1978............................................. 10.3 1.5 14.9 26.7 2,293.6 5,160.6 1979............................................. 10.0 1.7 15.3 27.0 2,659.0 5,424.4 1980............................................. 10.0 1.9 14.7 26.6 3,044.9 5,450.4 1981............................................. 10.6 1.9 13.3 25.8 2,959.5 4,764.8 1982............................................. 9.8 1.6 11.5 22.9 2,611.5 3,917.3 1983............................................. 10.3 1.5 11.2 23.0 2,828.6 3,101.5 1984............................................. 10.3 1.5 11.5 23.3 2,948.2 4,098.0 1985............................................. 9.9 1.6 12.1 23.6 3,034.4 4,096.4 1986............................................. 10.0 1.6 12.2 23.8 3,160.2 4,139.9 1987............................................. 10.0 1.6 12.4 24.0 3,245.6 4,154.4 1988............................................. 9.8 1.6 12.8 24.2 3,383.7 4,162.0 1989............................................. 9.7 1.6 12.7 24.2 3,479.4 4,070.0 1990............................................. 9.9 1.6 12.8 24.1 3,676.4 4,117.6 1991............................................. 10.3 1.8 12.1 24.2 4,072.9 4,317.3 1992............................................. 11.1 1.7 11.7 24.5 4,474.5 4,608.7 1993............................................. 11.8 1.7 11.3 24.8 4,663.8 4,663.8 ---------------------------------------------------------------------------------------------------------------- \1\In order to reflect participation for the actual school year (September through May), these estimates are based on 9 month averages of October through May, plus September, rather than averages of the 12 months of the fiscal year (October through September). \2\The Federal Government provides a small subsidy for these meals. \3\Details may not sum to total because of rounding. \4\Includes cash payments and entitlement commodities and cash in lieu of commodities; does not include value of bonus commodities. Note: Constant dollars were calculated using the fiscal year CPI-U. Sources: U.S. Department of Agriculture, Food and Nutrition Service, ``Annual Historical Review of FNS Programs: Fiscal Year 1988, ``Food Program Update fiscal year 1990 (January 1991), and ``Review of FNS Food Assistance Program Activity, fiscal year 1991 (December 1991), and fiscal year 1992 (December 1992). For fiscal year 1993, ``Program Information Report'' (January 1994). TABLE 18-31.--THE SCHOOL BREAKFAST PROGRAM: PARTICIPATION AND FEDERAL COSTS, FISCAL YEARS 1977-93 [Dollars in millions] ---------------------------------------------------------------------------------------------------------------- Participation 9 month average (in millions)\1\ Federal ------------------------------------------ costs in Fiscal year Full- Federal constant Free Reduced- price Total\3\ costs\4\ 1993 meals price meals\2\ dollars meals ---------------------------------------------------------------------------------------------------------------- 1977............................................. 2.0 0.1 0.4 2.5 $148.6 $356.6 1978............................................. 2.2 .2 .4 2.8 181.2 407.7 1979............................................. 2.6 .2 .5 3.3 231.0 471.2 1980............................................. 2.8 .2 .6 3.6 287.8 515.2 1981............................................. 3.0 .2 .5 3.8 331.7 534.0 1982............................................. 2.8 .2 .4 3.3 317.3 476.0 1983............................................. 2.9 .1 .3 3.4 343.8 498.5 1984............................................. 2.9 .1 .4 3.4 364.0 506.0 1985............................................. 2.9 .2 .4 3.4 379.3 512.1 1986............................................. 2.9 .2 .4 3.5 406.3 532.3 1987............................................. 3.0 .2 .4 3.7 446.8 571.9 1988............................................. 3.0 .2 .5 3.7 482.0 592.9 1989............................................. 3.1 .2 .5 3.8 507.0 593.2 1990............................................. 3.3 .2 .5 4.0 589.1 659.8 1991............................................. 3.6 .2 .6 4.4 677.2 717.8 1992............................................. 4.0 .3 .6 4.9 782.6 806.1 1993............................................. 4.4 .3 .7 5.4 868.4 868.4 ---------------------------------------------------------------------------------------------------------------- \1\In order to reflect participation for the actual school year (September through May), these estimates are based on 9 month averages of October through May, plus September, rather than averages of the 12 months of the fiscal year (October through September). \2\The Federal Government provides a small subsidy for these meals. \3\Details may not sum to totals due to rounding. \4\Does not include the value of any USDA bonus commodities donated to the program for no charge. Note: Constant dollars were calculated using the fiscal year CPI-U. Sources: U.S. Department of Agriculture, Food and Nutrition Service: ``Annual Historical Review of FNS Programs, Fiscal Year 1988,'' ``Food Program Update, fiscal year 1990'' (January 1991), and ``Review of FNS Food Assistance Program Activity, fiscal year 1991'' (December 1991) and fiscal year 1992 (December 1992). For fiscal year 1993, ``Program Information Report'' (January 1994). THE SPECIAL SUPPLEMENTAL FOOD PROGRAM FOR WOMEN, INFANTS, AND CHILDREN (WIC) The Special Supplemental Food Program for Women, Infants, and Children (WIC) provides food assistance and nutritional screening to low-income pregnant and postpartum women and their infants, as well as to low-income children up to age 5. Participants in the program must have incomes at or below 185 percent of poverty, and must be nutritionally at risk. Under the Child Nutrition Act of 1966, nutritional risk is defined as detectable abnormal nutritional conditions; documented nutritionally-related medical conditions; health-impairing dietary deficiencies; or conditions that predispose people to inadequate nutrition or nutritionally related medical problems. Beneficiaries of the special supplemental food program for women, infants, and children (WIC) receive supplemental foods each month in the form of actual food items or, more commonly, vouchers for purchases of specific items in retail stores. The law requires that the WIC program provide foods containing protein, iron, calcium, vitamin A, and vitamin C. Among the items that may be included in a food package are milk, cheese, eggs, infant formula, cereals, and fruit or vegetable juices. U.S. Department of Agriculture (USDA) regulations require tailored food packages that provide specified types and amounts of food appropriate for six categories of participants: (1) infants from birth to 3 months, (2) infants from 4-12 months, (3) women and children with special dietary needs, (4) children from 1-5 years of age, (5) pregnant and nursing mothers, and (6) postpartum nonnursing mothers. In addition to food benefits, recipients also must receive nutrition education. The cost of providing WIC benefits varies widely depending on the recipient category, type of package and foods contained in it, as well as by regional differences in food and administrative costs. The USDA estimated that in fiscal year 1993 the national average monthly cost of a WIC food package was $29.82 per participant, and the average monthly per participant administrative cost was $9.77. Thus, the total average cost of serving each WIC participant in fiscal year 1993 was estimated at $39.59 per month or $475 annually. The WIC program has categorical, income, and nutritional risk requirements for eligibility. Only pregnant and postpartum women, infants, and children under age 5 may participate. Income eligibility is set by each State. Regulations permit States to use either the income cutoff level set for the reduced-price school lunch program (185 percent of the poverty income guideline, currently $26,548 for a family of four), or the income level that is used for free and reduced-price health care, as long as this is not higher than 185 percent of the poverty level. States are prohibited by regulation from using income criteria that are lower than 100 percent of the poverty level. Most States use 185 percent as the cut-off level for WIC income eligibility. South Dakota uses 175 percent statewide. WIC applicants also must show evidence of health or nutrition risk, medically verified by a health professional, in order to qualify for the program. WIC participants receive benefits for a specified period of time, and in some cases must be recertified during this time period to show continued need. Pregnant women may continue benefits throughout their pregnancy and for up to 6 months after childbirth without recertification. Nursing mothers are certified at 6-month intervals ending with their infant's first birthday. WIC, which is federally funded, but administered by State and local agencies, does not serve all who are eligible. In fiscal year 1993, Federal costs totaled $2.8 billion and the program served over 5.9 million women, infants, and children (see table 18-32). In July of 1987, the USDA released a report of the WIC eligibility study (``Estimation of Eligibility for the WIC Program'') which found that in 1984, an estimated 9.6 million persons were income-eligible for the WIC program, and 7.5 million of those were estimated to be at nutritional risk and, thus, fully eligible for the WIC program. In 1991, the Congressional Budget Office (CBO) updated and revised USDA reestimates to reflect more recent Census data on income and population growth. Using slightly higher assumptions of nutritional risk than the USDA, CBO estimated that a total of 8.5 million persons were eligible for WIC in fiscal year 1991. In that year, the program served some 4.8 million recipients, or 56 percent of those estimated to be eligible by CBO. Another USDA study released in February 1992 ``Study of WIC Participant and Program Characteristics, 1990,'' indicated that in 1990 nearly three-quarters (73 percent) of WIC participants had incomes at or below the poverty level. The CBO has projected that in fiscal year 1994 some 9.6 million mothers and children will be eligible for WIC, and that 7.6 million of them would apply for the program and receive benefits if sufficient funds were available to fully fund the program. TABLE 18-32.--THE SUPPLEMENTAL FOOD PROGRAM FOR WOMEN, INFANTS, AND CHILDREN (WIC): PARTICIPATION AND FEDERAL COSTS, FISCAL YEARS 1977-93 [Dollars in millions] ---------------------------------------------------------------------------------------------------------------- Participation (in thousands) Federal ----------------------------------------- costs in Fiscal year Federal constant Women Infants Children Total\1\ costs\2\ 1992 dollars ---------------------------------------------------------------------------------------------------------------- 1977.............................................. 165.0 213.0 471.0 848.0 $255.9 $597.1 1978.............................................. 240.0 308.0 633.0 1,181.0 379.6 827.5 1979.............................................. 312.0 389.0 782.0 1,483.0 525.4 1,039.6 1980.............................................. 411.0 507.0 995.0 1,913.0 724.7 1,261.9 1981.............................................. 446.0 585.0 1,088.0 2,119.0 874.4 1,370.1 1982.............................................. 478.0 623.0 1,088.0 2,189.0 948.2 1,384.5 1983.............................................. 542.0 730.0 1,265.0 2,537.0 1,123.1 1,583.5 1984.............................................. 657.0 825.0 1,563.0 3,045.0 1,386.3 1,876.7 1985.............................................. 665.0 874.0 1,600.0 3,138.0 1,488.9 1,945.6 1986.............................................. 712.0 945.0 1,655.0 3,312.0 1,580.5 2,014.3 1987.............................................. 751.0 1,019.0 1,660.0 3,429.0 1,663.6 2,061.7 1988.............................................. 815.0 1,095.0 1,683.0 3,593.0 1,802.4 2,145.9 1989.............................................. 951.8 1,259.6 1,907.0 4,118.4 1,929.4 2,192.2 1990.............................................. 1,035.0 1,412.5 2,069.4 4,516.9 2,125.9 2,301.0 1991.............................................. 1,120.1 1,558.8 2,213.8 4,892.6 2,301.1 2,370.9 1992.............................................. 1,221.5 1,684.1 2,505.2 5,410.8 2,566.5 2,566.5 1993.............................................. 1,364.9 1,741.9 2,813.4 5,920.3 2819.5 2,737.0 ---------------------------------------------------------------------------------------------------------------- \1\Details may not sum to totals due to rounding. \2\Includes funding for WIC studies, surveys, and pilot projects. Note: Constant dollars were calculated using the fiscal year CPI-U. Sources: U.S. Department of Agriculture, Food and Nutrition Service, ``Annual Historical Review of FNS Programs: Fiscal Year 1986,'' and U.S. Department of Agriculture, Food and Nutrition Service, ``Food Program Updates for Fiscal Year 1990'' (January 1991), and ``Food Program Update. A Review of FNS Food Assistance Program Activity. Fiscal Year 1993'' (December 1993). JOB TRAINING PARTNERSHIP ACT Title II of the Job Training Partnership Act of 1982 (JTPA) provides block grants to States to fund training and related services for economically disadvantaged youths and adults. Title II consists of three programs: the II-A adult training program, the II-B summer youth employment and training program, and the II-C youth training program. Prior to the 1992 amendments to JTPA, which became effective July 1, 1993--the beginning of program year 1993--Title II-A provided services to both adults and youth. (Since data for program year 1993 will not be available until sometime after June 30, 1994, the end of the program year, the title II-A data presented here are for both adults and youth.) The title II JTPA programs are administered by States and localities, which select participants and design projects within Federal guidelines. The programs are intended to increase participants' future employment and earnings and reduce their dependence on welfare. Services authorized under title II-A include institutional and on-the-job training, work experience, job search assistance, counseling, and other work-related assistance. In general, participants must be economically disadvantaged, which is defined as being a member of a family whose total income for the 6-month period prior to application (exclusive of unemployment compensation, child support payments, and welfare payments) does not exceed the higher of the poverty line or 70 percent of the Bureau of Labor Statistics' lower living standard. Members of families receiving Aid to Families With Dependent Children (AFDC) or other cash welfare payments and those eligible for food stamps are also defined as economically disadvantaged. As shown in table 18-33, of title II-A participants who terminated during program year 1992, 46 percent were white, 33 percent were black and 18 percent were Hispanic. Fifty percent were younger than 22. Of participants who terminated, 52 percent entered employment, and the average hourly wage for terminees who entered employment was $5.79. Since the program was implemented in 1983, about one-fifth of the participants terminating activities authorized by title II-A were AFDC recipients at the time that they enrolled--27 percent in program year 1991 (July 1991-June 1992). Among title II-A terminees who were AFDC recipients at the time of enrollment in program year 1991, women comprised 79 percent of the total, as compared with 47 percent of title II-A participants who did not receive AFDC. Among AFDC recipients, 34 percent were school dropouts, compared with 26 percent of those JTPA participants who were not AFDC recipients. AFDC recipients were more likely to be placed in classroom training (57 percent) than non-AFDC recipients (39 percent), and were less likely to participate in on-job-training (9 percent) than non-AFDC recipients (17 percent). The average entered employment rate in program year 1991 for AFDC recipients in JTPA was 39 percent, compared with an average entered employment rate of 54 percent for those JTPA participants who did not receive AFDC. The average hourly starting wage for AFDC recipients entering employment was $5.64, compared with $5.81 for non-AFDC recipients. TABLE 18-33.--CHARACTERISTICS OF JTPA TITLE II-A TERMINEES, SELECTED PROGRAM YEARS, 1988-92 ------------------------------------------------------------------------ Program Years Selected ------------------------------------------------- Characteristics 1988 1989 990 1991 1992 ------------------------------------------------------------------------ Total terminees....... 734,600 692,300 565,200 549,700 510,652 Sex: Male.............. 47 45 43 44 44 Female............ 53 55 57 56 56 Minority status: White (excluding Hispanic)........ 53 53 52 50 46 Black (excluding Hispanic)........ 31 32 33 34 33 Hispanic.......... 12 12 12 12 18 Other............. 3 3 4 4 4 Age at enrollment: Younger than 19... 25 25 25 28 (\2\) 19-21............. 16 15 16 15 (\2\) Adults, age 22-54. 54 55 54 52 49 55 and older...... 5 5 5 5 1 Economically disadvantaged........ 95 93 93 93 NA Receiving AFDC........ 21 22 24 27 27 Receiving public assistance (including AFDC)................ 42 43 46 50 30 U.C. claimant......... 4 4 5 6 7 Education status: School dropout.... 29 29 28 28 24 Student (HS or less)............ 17 18 19 21 27 High school graduate (or more)............ 53 53 53 51 49 Program activity: Classroom training, basic.. 11 11 14 \1\44 NA Classroom training, other.. 23 24 26 \1\44 NA On-the-job training......... 22 22 18 15 NA Job search assistance....... 15 17 16 15 NA Work experience... 8 7 7 6 NA Other services.... 21 18 19 20 NA Median length of stay (in days)............ 103.7 110.3 128.8 138.0 \3\27 Average entered employment rate...... 67 61 55 50 52 Average hourly wage at termination.......... $5.01 $5.29 $5.54 $5.78 $5.79 ------------------------------------------------------------------------ \1\Basic and other classroom training combined. \2\The Job Training Annual Status Report, used for 1992, differs in its methodology from the Job Training Quarterly Survey used for 1988 through 1991. In 1992, 50 percent of the terminees were age 21 or younger. \3\The 1992 data are in weeks rather than days. In 1992, the median length of stay was 27 weeks. Source: JTQS Special Paper No. 10, ``Review of JTPA Participant Characteristics and Program Outcomes Program Years 1984 through 1989.'' Department of Labor, October 1991; Job Training Quarterly Survey. ``JTPA Title II A and III Enrollments and Terminations During Program Year 1990,'' Department of Labor, January 1992, Job Training Quarterly Survey. ``JTPA Title II-A and III Enrollments and Terminations During Program Year 1991,'' Department of Labor, February 1993. Job Training Annual Status Report 1992, Department of Labor, February 1994. In fiscal year 1993, an estimated $1.7 billion is expected to be spent for JTPA II-A and II-C grants, providing training and other services to about 566,000 new enrollees. Data on participation (new enrollees) and budget authority for recent fiscal years are provided in table 18-34 below. Fiscal Year 1994 figures are estimates based on assumptions of continued spending. TABLE 18-34.--JOB TRAINING PROGRAMS\1\ FOR THE DISADVANTAGED: NEW ENROLLEES, FEDERAL APPROPRIATIONS AND OUTLAYS, FISCAL YEARS 1975-93 ---------------------------------------------------------------------------------------------------------------- Budget Budget authority Outlays in Fiscal year New authority Outlays in constant constant enrollees (millions) (millions) 1990 1990 dollars dollars ---------------------------------------------------------------------------------------------------------------- 1975........................................... 1,126,000 $1,580 $1,304 $3,755 $3,099 1976........................................... 1,250,000 1,580 1,697 3,515 3,775 1977........................................... 1,119,000 2,880 1,756 5,964 3,636 1978........................................... 965,000 1,880 2,378 3,658 4,627 1979........................................... 1,253,000 2,703 2,547 4,829 4,550 1980........................................... 1,208,000 3,205 3,236 5,154 5,203 1981........................................... 1,011,000 3,077 3,395 4,493 4,958 1982........................................... (\2\) 1,594 2,277 2,175 3,107 1983........................................... (\2\) 2,181 2,291 2,846 2,990 1984........................................... 716,200 1,886 1,333 2,361 1,669 1985........................................... 803,900 1,886 1,710 2,279 2,066 1986........................................... 1,003,900 1,783 1,911 2,101 2,252 1987........................................... 960,700 1,840 1,880 2,108 2,154 1988........................................... 873,600 1,810 1,902 1,991 2,092 1989........................................... 823,200 1,788 1,868 1,877 1,961 1990........................................... 630,000 1,745 1,803 1,745 1,803 1991........................................... \3\603,900 1,779 1,746 1,694 1,676 1992........................................... \3\602,300 1,774 1,767 1,637 1,632 1993\3\........................................ 566,000 1,692 1,747 (\2\) (\2\) 1994\3\........................................ 556,400 1,647 1,616 (\2\) (\2\) ---------------------------------------------------------------------------------------------------------------- \1\Figures shown in years 1975 through 1983 are for training activities under the Comprehensive Employment and Training Act (CETA); public service employment under CETA is not included. Figures shown in years 1984 through 1992 are for activities under title II-A of the Job Training Partnership Act. Fiscal year 1993 through 1994 reflect figures for titles II-A and of the amended Job Training Partnership Act. \2\Comparable figures are not available for these years. \3\Estimate. Source: Employment and Training Administration, Department of Labor (DOL), Employment and Training Reports of the President, Job Training Quarterly Survey data, budget briefing documents, conversation with DOL officials. Title II-B of JTPA authorizes a summer employment and training program for economically disadvantaged youngsters, aged 14-21. Services include a full range of remedial education, classroom and on-job-training, as well as work experience for which participants are paid minimum wage. The summer program is administered through the nationwide network of local service delivery areas. Approximately $849 million was appropriated for the summer of 1993 with an estimated 614,600 participants served. For the summer of 1994, $876.7 has been appropriated to date to serve an estimated 623,300 individuals. In the summer of 1993, 41 percent of title II-B enrollees were ages 14 and 15, and 59 percent were between the ages of 16 and 21. During that summer, 5 percent of enrollees were dropouts, while 86 percent were students and 8 percent were high school graduates. Black youth comprised 42 percent of summer enrollees, while 29 percent were white and 25 percent were Hispanic. Eight percent had limited English-speaking ability, and 15 percent of summer youth had disabilities. Table 18-35 presents a funding and participation history of the summer program. TABLE 18-35.--SUMMER YOUTH EMPLOYMENT PROGRAM: FEDERAL APPROPRIATIONS, OUTLAYS, AND PARTICIPATION LEVELS, FISCAL YEARS 1984-94\1\ [Dollars in millions] ---------------------------------------------------------------------------------------------------------------- Outlays Appropriations Outlays (1990 Participants dollars) ---------------------------------------------------------------------------------------------------------------- 1984.................................................... $824.5 $583.8 $730.7 767,600 1985.................................................... 724.5 776.3 938.0 785,000 1986.................................................... 636.0 746.1 879.2 634,400 1987.................................................... 750.0 722.7 828.1 722,900 1988.................................................... 718.1 707.1 777.7 604,500 1989.................................................... 709.4 697.4 732.1 632,700 1990.................................................... 699.8 699.5 699.5 538,000 1991.................................................... 682.9 697.8 663.0 \2\771,903 1992.................................................... \3\995.2 957.8 649.6 \2\614,600 1993.................................................... \4\1,024.9 914.9 (\5\) \2\623,300 1994.................................................... \6\888.3 990.8 (\5\) \2\623,200 ---------------------------------------------------------------------------------------------------------------- \1\Because JTPA is an advance-funded program, appropriations for the summer youth program in a particular fiscal year are generally spent the following summer. For example, fiscal year 1984 appropriations were spent during the summer of 1985. \2\Estimate. \3\Includes $500 million supplemental appropriation for summer 1992. The remaining $495.2 million is for summer 1993. \4\Includes $354.2 million for summer 1993 and $670.7 for summer 1994. \5\Not available. \6\Includes $206.0 million for summer 1994 and $682.3 million for summer 1995. Source: Employment and Training Administration, Department of Labor (DOL), appropriations justifications documents, telephone conversation with DOL officials. Job Corps, authorized by title IV-B of JTPA, serves economically disadvantaged youth, ages 14-24, who demonstrate both the need for, and the ability to benefit from, an intensive and wide range of services provided in a residential setting. The program is administered directly by the Federal Government through contractors and currently operates at 108 centers around the country. Services include basic education, vocational skill training, work experience, counseling, health care, and other supportive services. Labor Department data for program year 1992 (July 1, 1992- June 30, 1993) indicate that about 61 percent of Job Corps enrollees are male, 50 percent are black, 31 percent are white, and 13 percent are Hispanic. Eighty percent are high school dropouts, and 72 percent have never worked full-time. Forty-two percent of Job Corps enrollees come from families on public assistance. The average length of stay for Job Corps enrollees in program year 1991 was 7.8 months, and the Labor Department estimates that 54 percent of terminees entered employment after leaving the program, while another 11 percent either continued their education or entered another training program, for a total positive termination rate in 1991 of 65 percent. Table 18-36 provides a funding and participation history of Job Corps since 1982. The program was first authorized in the mid-1960's by the Economic Opportunity Act and has been authorized under JTPA since 1982. TABLE 18-36.--JOB CORPS: FEDERAL APPROPRIATIONS, OUTLAYS, AND PARTICIPATION, FISCAL YEARS 1982-94 [Dollars in millions] ---------------------------------------------------------------------------------------------------------------- Outlays Appropriations Outlays (1990 New dollars) enrollees ---------------------------------------------------------------------------------------------------------------- 1982..................................................... $589.6 $595.0 $811.8 53,581 1983..................................................... 618.0 563.3 735.1 60,465 1984..................................................... 599.2 580.6 726.7 57,386 1985..................................................... 617.0 593.0 716.5 63,020 1986..................................................... 612.5 594.5 700.6 64,964 1987..................................................... 656.4 630.6 722.6 65,150 1988..................................................... 716.1 688.5 757.3 68,068 1989..................................................... 741.8 689.5 723.8 62,550 1990..................................................... 802.6 739.6 739.6 61,453 1991..................................................... 867.5 769.4 769.0 62,205 1992..................................................... 919.5 834.1 789.1 \1\64,917 1993..................................................... 966.1 \1\936.4 N.A. \1\60,419 1994..................................................... 1,040.5 \1\1,000.0 N.A. \1\60,472 ---------------------------------------------------------------------------------------------------------------- \1\Estimate. Source: Department of Labor (DOL) budget documents, telephone conversation with D.O.L. officials. HEAD START Head Start began operating in 1965 under the general authority of the Economic Opportunity Act of 1964. Head Start provides a wide range of services to primarily low-income children, ages 0 to 5, and their families. Its goals are to improve the social competence, learning skills, and health and nutrition status of low-income children so that they can begin school on an equal basis with their more advantaged peers. The services provided include cognitive and language development, medical, dental, and mental health services (including screening and immunizations); and nutritional and social services. Parental involvement is extensive, through both volunteer participation and employment of parents as Head Start staff. Formal training and certification as child care workers is provided to some parents through the Child Development Associate program. Head Start's eligibility guidelines require that at least 90 percent of the children served come from families with incomes at or below the poverty line. At least 10 percent of the enrollment slots in each local program must be available for children with disabilities. In fiscal year 1993 713,903 children were served in Head Start programs, at a total Federal cost of $2.776 billion. Approximately 55 percent of Head Start children in families receiving AFDC benefits. Table 18-37 provides historical data on participation in and funding of the Head Start program, while table 18-38 provides characteristics of children enrolled in the program. TABLE 18-37.--HEAD START: PARTICIPATION AND FEDERAL FUNDING, FISCAL YEARS 1965-94 [Dollars in millions] ------------------------------------------------------------------------ Fiscal year Enrollment Appropriations ------------------------------------------------------------------------ 1965 (summer only)...................... 561,000 $96.4 1966.................................... 733,000 198.9 1967.................................... 681,400 349.2 1968.................................... 693,900 316.2 1969.................................... 663,600 333.9 1970.................................... 477,400 325.7 1971.................................... 397,500 360.0 1972.................................... 379,000 376.3 1973.................................... 379,000 400.7 1974.................................... 352,800 403.9 1975.................................... 349,000 403.9 1976.................................... 349,000 441.0 1977.................................... 333,000 475.0 1978.................................... 391,400 625.0 1979.................................... 387,500 680.0 1980.................................... 376,300 735.0 1981.................................... 387,300 818.7 1982.................................... 395,800 911.7 1983.................................... 414,950 912.0 1984.................................... 442,140 995.8 1985.................................... 452,080 1,075.0 1986.................................... 451,732 1,040.0 1987.................................... 446,523 1,130.5 1988.................................... 448,464 1,206.3 1989.................................... 450,970 1,235.0 1990.................................... 548,470 \1\1,552.0 1991.................................... 583,471 1,951.8 1992.................................... 621,078 2,201.8 1993.................................... 713,903 2,776.3 1994 (est.)............................. 750,000 3,326.0 ------------------------------------------------------------------------ \1\After sequestration. \2\Projected enrollment. LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM (LIHEAP) The predecessor to the Low-Income Home Energy Assistance Program (LIHEAP) was created by title III of the Crude Oil Windfall Profit Tax Act of 1980 (P.L. 96-223). The purpose of LIHEAP is to help low-income households meet their energy- related expenses. In fiscal year 1981, $1.85 billion was appropriated for the program. In 1981, title XXVI of the Omnibus Budget Reconciliation Act (OBRA) (Public Law 97-35), the Low-Income Home Energy Assistance Act of 1981, authorized the Secretary of Health and Human Services to make LIHEAP allotments to States for fiscal years 1982-84. The Act permitted States to provide three types of energy assistance. States can: (1) help eligible households pay their home heating or cooling bills, (2) use up to 15 percent of their LIHEAP allotment for low-cost weatherization, and (3) provide assistance to households during energy-related emergencies. TABLE 18-38.--CHARACTERISTICS OF CHILDREN ENROLLED IN HEAD START [In percent] ---------------------------------------------------------------------------------------------------------------- Age of children enrolled Enrollment by race ------------------------------------------------------------------------------ Fiscal year Disabled 5 and Under Native children older 4 3 3 American Hispanic Black White Asian ---------------------------------------------------------------------------------------------------------------- 1980............................. 11.9 21 55 24 0 4 19 42 34 1 1982............................. 12.0 17 55 26 2 4 20 42 33 1 1984............................. 11.9 16 56 26 2 4 20 42 33 1 1986............................. 12.2 15 58 25 2 4 21 40 32 3 1988............................. 12.7 11 63 23 3 4 22 39 32 3 1990............................. 13.5 8 64 25 3 4 22 38 33 3 1991............................. 13.1 7 63 27 3 4 22 38 33 3 1992............................. 13.4 7 63 27 3 4 23 37 33 3 1993............................. 13.0 6 64 27 3 4 24 36 33 3 ---------------------------------------------------------------------------------------------------------------- Source: Health and Human Services. The Human Services Reauthorization Act of 1984 (Public Law 98-558) amended the Low-Income Home Energy Assistance Act of 1981 and authorized appropriations for fiscal years 1985 and 1986. Appropriations for fiscal years 1982, 1983, and 1984 were $1.875, $1.975, and $2.075 billion, respectively. Public Law 98-619 appropriated $2.1 billion for fiscal year 1985. Public Law 99-178 appropriated $2.1 billion for fiscal year 1986.\31\ --------------------------------------------------------------------------- \31\The Balanced and Emergency Deficit Control Act of 1985, as reaffirmed by Public Law 99-366, required the cancellation of $90.3 million of fiscal year 1986 budget authority. --------------------------------------------------------------------------- The Human Services Reauthorization Act of 1986, Public Law 99-425, amended the Act and extended the appropriations authorization through fiscal year 1990. Authorized appropriations levels are: $2.050 billion for fiscal year 1987; $2.132 billion for fiscal year 1988; $2.218 billion for fiscal year 1989; and $2.307 billion for fiscal year 1990. The appropriations for fiscal years 1987, 1988, 1989 and 1990 were $1.825 billion, $1.532 billion, $1.383 billion, and $1.443 billion, respectively.\32\ --------------------------------------------------------------------------- \32\Funding for Federal administration is not included beginning with fiscal year 1988; these funds are now appropriated through a separate budget account. The fiscal year 1989 appropriation for allotments to States and territories (and training and technical assistance) was reduced from $1.4 billion to $1.383 billion (1.2 percent) under the terms of Public Law 100-436. --------------------------------------------------------------------------- The Augustus F. Hawkins Human Services Reauthorization Act of 1990, Public Law 101-501, amended the act and extended the appropriations authorization through fiscal year 1994. The National Institutes of Health Revitalization Act, Public Law 103-43, extended the appropriation authorization through fiscal year 1995. Major amendments in the 1990 Act included permission for grantees to request waivers to spend up to 25 percent of their allotment on weatherization activities, a reduction in the percentage of allotments that can be carried over from year to year, elimination of authority to transfer funds to other block grants (beginning in fiscal year 1994), provision for forward funding based on a July-June ``program year,'' and establishment of a new ``leveraging incentive'' grant award program. Under the leveraging incentive program grantees are to be rewarded for adding their own or other funds to the LIHEAP or finding other ways to stretch Federal dollars (e.g., purchasing fuel in bulk at discount rates); the program was authorized at $25 million for fiscal year 1992 and $50 million a year for fiscal years 1993, 1994, and 1995. Overall authorized appropriations levels were: $2.150 billion for fiscal year 1991; $2.230 billion for fiscal year 1992, and such sums as are necessary for fiscal years 1993, 1994, and 1995. The fiscal year 1991 appropriation was $1.610 billion, including a $195 million energy emergency ``contingency fund'' that was distributed to States in late January 1991 in response to large increases in home heating oil prices. For fiscal year 1992, $1.5 billion was appropriated, including $406 million that was not made available to grantees until September 30, 1992. In fiscal year 1993, $1.346 billion was appropriated, $682 million of which was not made available to grantees until September 30, 1993. The fiscal year 1993 appropriation included $1.437 billion in ``advance funding'' for the first three quarters of fiscal year 1994, October 1993/June 1994 (this represented the first step in the process of converting the LIHEAP from a fiscal year funding cycle to a ``program year'' cycle, under which grantees know their allocations before the heating season begins. An additional $600 million ``contingency fund'' is available in 1994 if requested by the Administration because of emergency needs. In February 1994 $300 million of this fund was released to 23 States hit by unusually harsh winter weather. LIHEAP received $1.475 billion in advance funding for program year 1995 (October 1994/June 1995) as part of the fiscal year 1994 Labor/HHS/Education Appropriation. The Human Services Reauthorization Act of 1994, Public Law 103-252, amended the act and extended appropriations authorization for LIHEAP and the leverage incentive program through fiscal year 1999. LIHEAP appropriations are authorized at $2.0 billion for fiscal years 1995 through 1999; authorized appropriation levels for the leveraging incentive program are $50 million for fiscal year 1996 and 1997 and such sums as may be necessary for fiscal years 1998 and 1999. Major amendments to the act include: a permanent authorization of $600 million in each of the fiscal years to meet additional home energy needs arising from a natural disaster or other emergency; allowing for the targeting of such emergency funds to individual States; permitting States to give priority to households with the highest home energy burden in relation to household income, emphasizing households with young children, elderly, or disabled members; and the establishment of the Residential Energy Assistance Challenge Option (R.E.A.Ch.), an incentive grant program designed to increase efficient energy use, minimize health and safety risks, and prevent hopelessness among low-income families with high energy burdens. Up to 25 percent of leveraging incentive monies may be used to fund R.E.A.Ch. demonstrations. ALLOTMENTS TO STATES\33\ The maximum amount of LIHEAP funds that a State can carry over to the next fiscal year is 10 percent. This provision applies to a State's allotment after adjustments have been made for tribal set aside. States must explain why funds are held over until the next fiscal year and what types of assistance the funds will provide. The amount carried over does not affect the State's subsequent fiscal year allocation. Amounts above 10 percent that are not spent by the State must be reallocated by the Secretary of Health and Human Services. Special allotment and set-aside rules apply to grants for Indian tribes and the territories. --------------------------------------------------------------------------- \33\As the result of court settlements of oil price overcharges under the Emergency Petroleum Allocation Act of 1973, substantial additional funding has been made available to States to supplement Federal LIHEAP appropriations; in fiscal year 1991, an estimated $109 million of these supplemental funds were used for the LIHEAP. --------------------------------------------------------------------------- Table 18-39 shows State allotments for 1981 and selected recent fiscal years, and table 18-40 illustrates the number of households receiving benefits from the single largest program component, heating assistance, average heating benefits and total dollars spent on heating assistance. ELIGIBILITY AND TYPES OF ASSISTANCE States have considerable discretion to determine eligibility criteria for LIHEAP and the types of energy assistance to be provided. At State option, LIHEAP payments can be made to households, based on categorical eligibility, where one or more persons are receiving: Supplemental Security Income, Aid to Families with Dependent Children, food stamps, or needs-tested veterans' benefits. States can also elect to make payments to households with incomes that are up to 150 percent of the Federal poverty income guidelines or 60 percent of the State's median income, whichever is greater. Individuals who are denied benefits are entitled to an administrative hearing. The term ``household'' is defined as any individual or group of individuals who are living together as one economic unit and for whom residential energy is customarily purchased in common, or who make undesignated payments for energy in the form of rent. States cannot establish an income eligibility ceiling that is below 110 percent of the poverty level, but may give priority to those households with the highest energy costs in relation to household income, taking into consideration the presence of very young children, frail elderly, or persons with disabilities. States also are prohibited from treating categorically eligible and income eligible households differently with respect to LIHEAP. However, Public Law 103-185 permits States to reduce benefits to tenants of federally assisted housing if it is determined that such a reduction is reasonably related to any utility allowance they may receive. LIHEAP benefits cannot be used to calculate income or resources, or affect other benefits, under Federal or State law, including public assistance programs. States are required to give assurances that the largest benefits go to those households that have the lowest income and highest energy costs relative to their income, taking into account family size. In addition, States are to conduct outreach activities aimed at making households with elderly or handicapped individuals aware that energy assistance is available. These outreach services may include: toll-free information hotlines, special application periods, transportation to LIHEAP application offices, and home visits. Section 607(a) of Public Law 98-558 directs the Department of Health and Human Services to collect annual data, including information on the number of LIHEAP households in which at least one household member is 60 years old or handicapped. States also have considerable discretion in the methods they have available to provide assistance to eligible households. Methods vary by State and program. A list of methods that are used includes cash payments, vendor payments, two-party checks, vouchers/coupons, and payments directly to landlords. When paying home energy suppliers directly, States are required to give assurances that suppliers will charge the eligible households the difference between the amount of the assistance and the actual cost of home energy. Also, States may use Federal funds to provide tax credits to energy suppliers who supply home energy to low-income households at reduced rates. PLANNING AND ADMINISTRATION States are required to submit an application for funds to the Secretary of Health and Human Services. As part of the annual application, the chief executive officer of the State is required to make several assurances related to eligibility requirements, anticipated use of funds, as well as to satisfy planning and administrative requirements. States are prohibited from using more than 10 percent of their total LIHEAP allotment for planning and administrative costs. States must provide for public participation and public hearings in the development of the State plan, including making it, and any substantial revisions, available for public inspection and allowing public comment on the plan. Public Law 98-558 requires States to engage an independent person or organization to prepare an audit at least once every 2 years. However, the Single Audit Act of 1984 (P.L. 98-502) supersedes this requirement in most instances, and requires grantees to conduct an annual audit of all Federal financial assistance received. The law also contains two other related provisions. First, the Comptroller General is directed to evaluate, at least once every 3 years, whether a State's LIHEAP expenditures are consistent with law. Second, the Department of Health and Human Services is to develop regulations to prevent waste, fraud, and abuse in LIHEAP. TABLE 18-39.--LOW-INCOME HOME ENERGY ASSISTANCE PROGRAM STATE ALLOTMENTS [In thousands of dollars] -------------------------------------------------------------------------------------------------------------------------------------------------------- Fiscal year-- States ------------------------------------------------------------------------------------------ \1\1981 1985 1990 1991 1992 1993 1994 -------------------------------------------------------------------------------------------------------------------------------------------------------- Alabama...................................................... 15,674 18,234 11,961 15,856 12,664 11,344 12,127 Alaska....................................................... 7,505 7,247 7,635 9,594 8,034 7,241 7,741 Arizona...................................................... 6,426 8,150 5,785 6,200 6,125 5,486 5,865 Arkansas..................................................... 11,960 13,973 9,127 11,069 9,663 8,656 9,253 California................................................... 84,088 97,894 64,168 68,764 67,940 60,855 65,056 Colorado..................................................... 29,319 33,299 22,373 23,419 23,688 21,218 22,683 Connecticut\2\............................................... 38,247 43,440 29,187 35,541 30,902 27,680 34,986 Delaware\2\.................................................. 5,077 5,931 3,874 5,471 4,102 3,674 4,214 District of Columbia......................................... 5,940 6,940 4,533 5,269 4,799 4,299 4,595 Florida...................................................... 25,921 28,970 18,926 21,731 20,039 17,950 19,188 Georgia...................................................... 19,609 22,910 14,964 17,439 15,844 14,191 15,171 Hawaii....................................................... 1,975 2,243 1,507 1,531 1,596 1,429 1,528 Idaho........................................................ 11,181 12,877 8,727 9,493 9,240 8,277 8,848 Illinois\2\.................................................. 105,862 123,679 80,784 85,711 85,533 76,614 93,921 Indiana\2\................................................... 47,431 55,371 36,577 41,069 38,727 34,689 39,408 Iowa\2\...................................................... 29,470 38,581 25,922 28,719 27,466 24,584 34,335 Kansas....................................................... 15,515 18,211 11,905 12,901 12,605 11,290 12,069 Kentucky\2\.................................................. 24,943 29,141 19,034 22,537 20,153 18,052 24,639 Louisiana.................................................... 16,024 18,867 12,228 13,203 12,947 11,597 12,398 Maine\2\..................................................... 27,513 27,914 18,908 23,550 20,020 17,932 27,275 Maryland\2\.................................................. 29,285 34,214 22,348 29,361 23,662 21,194 29,288 Massachusetts\2\............................................. 82,707 86,878 58,383 69,364 61,815 55,369 73,071 Michigan\2\.................................................. 111,598 113,951 76,697 86,099 81,206 72,738 126,605 Minnesota\2\................................................. 72,409 82,239 55,256 62,063 58,504 52,404 93,421 Mississippi.................................................. 13,930 15,683 10,255 12,391 10,858 9,725 10,397 Missouri..................................................... 37,885 48,026 32,268 35,779 34,165 30,603 32,715 Montana...................................................... 11,350 12,298 10,236 10,938 10,838 9,708 10,378 Nebraska..................................................... 13,799 19,032 12,820 13,851 13,573 12,158 12,997 Nevada....................................................... 3,560 4,151 2,717 3,214 2,877 2,577 2,754 New Hampshire\2\............................................. 14,481 16,447 11,051 13,648 11,700 10,480 14,352 New Jersey\2\................................................ 71,025 82,849 54,200 66,929 57,386 51,402 61,894 New Mexico................................................... 8,867 9,973 7,242 8,123 7,668 6,868 7,342 New York\2\.................................................. 231,907 263,291 176,970 214,983 187,373 167,835 240,880 North Carolina............................................... 34,561 40,378 26,374 35,612 27,924 25,013 26,739 North Dakota\2\.............................................. 7,995 14,612 11,120 12,503 11,773 10,546 19,376 Ohio\2\...................................................... 93,651 109,413 71,465 78,365 75,666 67,776 96,381 Oklahoma..................................................... 15,998 16,004 10,995 12,250 11,641 10,427 11,147 Oregon....................................................... 22,723 25,808 17,340 19,298 18,360 16,445 17,580 Pennsylvania\2\.............................................. 124,568 141,479 95,059 107,475 100,647 90,152 116,857 Rhode Island\2\.............................................. 12,594 14,220 9,610 11,572 10,175 9,114 11,471 South Carolina............................................... 13,822 14,544 9,500 12,451 10,058 9,009 9,631 South Dakota\2\.............................................. 10,241 11,434 9,031 10,691 9,562 8,565 11,150 Tennessee.................................................... 25,267 29,520 19,281 21,652 20,415 18,286 19,548 Texas........................................................ 41,261 48,206 31,487 36,455 33,337 29,861 31,922 Utah......................................................... 13,289 14,827 10,397 11,062 11,008 9,860 10,541 Vermont\2\................................................... 10,854 12,328 8,283 9,813 8,770 7,855 13,197 Virginia\2\.................................................. 39,019 41,677 27,222 36,051 28,822 25,817 28,277 Washington................................................... 33,104 40,896 28,522 31,495 30,199 27,050 28,917 West Virginia\2\............................................. 16,507 19,285 12,596 13,676 13,337 11,946 16,503 Wisconsin\2\................................................. 61,679 74,027 49,738 56,987 52,662 47,171 65,147 Wyoming...................................................... 3,561 6,195 4,163 4,605 4,407 3,948 4,220 ------------------------------------------------------------------------------------------ U.S. total................................................. 1,813,177 2,077,577 1,390,749 1,607,819 1,472,503 1,318,961 1,709,998 -------------------------------------------------------------------------------------------------------------------------------------------------------- \1\Includes reallocation of funds and crisis intervention funds. Source: Low Income Energy Assistance Program; Report to Congress for Fiscal Year 1981; U.S. Department of Health and Human Services. \2\Includes $300 million in LIHEAP contingency funds released in February 1994 to states hit by unusually harsh winter weather under the 1994 Emergency Supplemental Appropriations Act, Public Law 103-211. Note: Columns may not add due to rounding. The table includes payments to Indian tribal organizations and excludes funding for Federal Administrative costs, payments to commonwealths and territories, and ``leveraging'' incentive grants. Source: U.S. Department of Health and Human Services. TABLE 18-40.--HEATING ASSISTANCE BENEFITS, NUMBER OF HOUSEHOLDS ASSISTED, AND AVERAGE BENEFIT BY STATE [Fiscal year 1993] ------------------------------------------------------------------------ Estimated Estimated Heating number of average State assistance households benefit (in benefits\1\ assisted dollars) ------------------------------------------------------------------------ Total................. $954,484,219 5,403,664 NA ----------------------------------------------- Alabama................. 4,480,459 36,132 124 Alaska.................. 4,652,490 13,370 348 Arizona\2\.............. 3,906,462 26,941 145 Arkansas................ 5,265,738 53,536 98 California\2\........... 35,189,243 380,460 92 Colorado................ 23,358,952 70,811 330 Connecticut............. 29,104,137 73,052 475 Delaware................ 3,288,026 14,141 233 District of Columbia.... 3,308,603 15,081 219 Florida\2\.............. 10,403,596 111,867 93 Georgia................. 9,637,845 60,194 160 Hawaii\2\............... 1,002,076 6,300 200 Idaho................... 5,227,737 28,842 182 Illinois................ 54,888,350 234,512 245 Indiana................. 29,592,410 112,895 254 Iowa.................... 15,610,411 66,320 235 Kansas.................. 5,184,191 30,350 171 Kentucky................ 17,421,342 155,548 112 Louisiana............... 4,529,551 50,328 90 Maine................... 15,470,441 55,574 290 Maryland................ 21,662,246 89,461 242 Massachusetts........... 51,347,839 143,367 360 Michigan................ 67,600,000 362,000 187 Minnesota............... 39,362,933 109,367 360 Mississippi............. 5,992,297 40,220 149 Missouri................ 26,041,474 128,553 203 Montana................. 4,754,242 21,216 224 Nebraska................ 6,500,000 35,600 182 Nevada.................. 1,791,182 9,794 183 New Hampshire........... 9,751,5900 24,740 394 New Jersey.............. 49,908,052 165,000 283 New Mexico.............. 5,445,385 69,000 117 New York................ 103,270,642 922,059 112 North Carolina.......... 20,625,239 193,481 106 North Dakota............ 7,812,043 17,201 454 Ohio.................... 35,173,467 328,994 107 Oklahoma................ 7,359,553 75,750 96 Oregon.................. 12,529,063 58,730 201 Pennsylvania............ 51,561,008 311,009 166 Rhode Island............ 9,770,578 25,604 381 South Carolina.......... 7,428,422 83,311 90 South Dakota............ 6,935,609 19,016 319 Tennessee............... 12,778,314 63,829 200 Texas................... 6,927,484 75,000 92 Utah.................... 7,948,771 36,969 215 Vermont................. 6,379,014 15,800 402 Virginia................ 24,317,772 124,763 195 Washington.............. 14,335,672 64,330 216 West Virginia........... 6,217,484 53,599 116 Wisconsin............... 38,604,000 128,333 300 Wyoming................. 2,830,784 11,314 250 ------------------------------------------------------------------------ \1\State estimates of heating assistance obligations for fiscal year 1993 from the following available funds: fiscal year 1992 LIHEAP funds carried over for use in fiscal year 1993; ``oil overcharge'' funds made available by States for use in LIHEAP; Federal LIHEAP allotments (net of set-asides for Indian tribes); and any State or other funds made available for LIHEAP heating assistance. \2\Benefits for heating and cooling assistance combined. Source: U.S. Department of Health and Human Services, March 1994. Data compiled from telephone interviews with State offices conducted in September 1993. VETERANS' BENEFITS AND SERVICES The Department of Veterans Affairs (DVA) offers a wide range of benefits and services to eligible veterans, members of their families, and survivors of deceased veterans. The DVA programs include veterans compensation and veterans pensions-- the main cash-assistance entitlement programs--readjustment and rehabilitation benefits, education and job training programs, medical care services, and the housing and loan guaranty programs. Also, the DVA provides life insurance, burial benefits, and special counseling and outreach programs. In fiscal year 1993, Federal outlays for veterans' benefits and services were $35.7 billion. VETERANS' COMPENSATION AND VETERAN'S PENSIONS Service-connected compensation is paid to veterans who have incurred injuries or illnesses while in service. The amounts of the monthly payments are determined by disability ratings that are based on presumed average reductions in earnings capacities caused by the disabilities. Disability ratings generally range from 10 percent to 100 percent in 10-percent intervals; multiple injuries may result in combined-degree ratings, however, and some injuries are compensable at a zero-percent rating. Death compensation or dependency and indemnity compensation is paid to survivors of veterans who died as a result of service-connected causes. In 1993, about 2.2 million disabled veterans and 311,748 survivors received $13.4 billion in compensation payments. Veterans pensions are means-tested cash benefits paid to war veterans who have become permanently and totally disabled from non-service-connected causes, and to survivors of war veterans. Under the current or ``improved law'' program, benefits are based on family sizes, and the pensions provide a floor of income: for 1994, the basic benefit before subtracting other income sources is $10,240 for a veteran with one dependent ($7,818 for a veteran living alone). Somewhat less generous benefits are available to survivors; a surviving spouse with no children could receive two-thirds of the basic benefit amount given a single veteran. About 895,596 persons received $3.5 billion in veterans pension payments in 1993. READJUSTMENT, EDUCATION, AND TRAINING BENEFITS Several DVA programs support readjustment, education, and job training for veterans and military personnel who meet certain eligibility criteria. In 1992, the largest of these programs was the Montgomery GI bill (MGIB). The MGIB provides an entitlement to basic educational assistance to most persons who are, or have been, members of the Armed Forces or the Selected Reserve for specified periods of time after June 30, 1985. The purposes of the MGIB are to provide educational assistance to help in the readjustment to civilian life, to aid in recruitment and retention of qualified personnel in the Armed Forces, and to develop a more highly educated and productive work force. Under the MGIB, contributions are required, and veterans can receive a basic educational benefit of up to $400 per month for 36 months while in an educational program. There are also several employment and training programs for veterans, including transition assistance for service persons scheduled for separation from active duty and programs for veterans who have been unable to find employment following military service. Net outlays from the DVA account in 1993 for all education and training programs came to $826 million. MEDICAL PROGRAMS The DVA provides inpatient and outpatient medical and health-related services, and operates 172 hospital centers, 128 nursing homes, 37 domiciliaries, and 353 outpatient clinics. The DVA extends free priority care to service-connected disabled veterans, to veterans in special categories, and to needy nonservice-connected veterans--in 1994, those with incomes $23,896 or less if married with one dependent, plus $1,330 for each additional dependent, or $19,912 or less if single. Veterans eligible under these criteria are called ``mandatory care'' veterans, and they are entitled to hospital care. As facilities and other resources permit, the DVA provides care to non-service-connected veterans with incomes that exceed the mandatory care income limits. Medical care for these veterans requires copayments. DVA-operated nursing home care is augmented by DVA-supported care under contract in private community nursing homes and with per diem payments for veterans in State-run homes for veterans. The DVA operates a nationwide health system. In 1993, approximately 2.8 million different veterans were VA patients of which almost all received outpatient care and 500,000 received inpatient care. Construction and modernization of facilities, as well as medical research and training programs, are also funded through DVA appropriations. In 1993, DVA medical programs cost the Federal Government $14.8 billion (see table 43). TABLE 18-41.--EXPENDITURES FOR VETERANS BENEFITS AND SERVICES, FOR SELECTED FISCAL YEARS [In millions of dollars] ---------------------------------------------------------------------------------------------------------------- Other veterans Compensation Readjustment, Medical Housing benefits Fiscal year and education, programs\2\ loans\3\ and Total pensions\1\ job training services ---------------------------------------------------------------------------------------------------------------- 1975.................................. 7,860 4,593 3,665 24 458 16,599 1980.................................. 11,688 2,342 6,515 -23 665 21,185 1981.................................. 12,909 2,254 6,965 201 662 22,991 1982.................................. 13,710 1,947 7,517 102 682 23,958 1983.................................. 14,250 1,625 8,272 3 696 24,846 1984.................................. 14,400 1,359 8,861 244 751 25,614 1985.................................. 14,714 1,059 9,547 214 758 26,292 1986.................................. 15,031 526 9,872 114 813 26,356 1987.................................. 14,962 454 10,266 330 769 26,782 1988.................................. 15,963 454 10,842 1,292 877 29,428 1989.................................. 16,544 459 11,343 878 843 30,066 1990.................................. 15,241 278 12,134 517 943 29,112 1991.................................. 16,961 427 12,889 85 987 31,349 1992.................................. 17,296 783 14,091 901 1,067 34,138 1993.................................. 17,758 826 14,812 1,299 1,025 35,720 ---------------------------------------------------------------------------------------------------------------- \1\Primarily compensation and pension benefits. Includes small amounts for insurance and burial benefits. \2\Medical program expenditure data include outlays for direct medical services, medical research and training, and construction programs. \3\Numbers provided for expenditures under housing loans are not comparable to program expenditures in the other columns because they are revolving funds with loan outlays and repayments. Source: Department of Veterans Affairs. TABLE 18-42.--NUMBER OF RECIPIENTS OF VETERANS BENEFITS AND SERVICES, FOR SELECTED FISCAL YEARS [In thousands] ---------------------------------------------------------------------------------------------------------------- Readjustment, Fiscal year Compensation education, Medical Housing and pensions job training programs\1\ loans ---------------------------------------------------------------------------------------------------------------- 1975.................................................... 4,855 2,804 1,985 290 1980.................................................... 4,646 1,232 2,671 297 1981.................................................... 4,535 1,074 2,765 188 1982.................................................... 4,407 900 2,720 103 1983.................................................... 4,286 755 2,933 245 1984.................................................... 4,123 629 3,026 252 1985.................................................... 4,005 491 2,963 179 1986.................................................... 3,900 388 2,942 314 1987.................................................... 3,850 312 2,900 479 1988.................................................... 3,762 273 2,922 235 1989.................................................... 3,686 330 3,344 190 1990.................................................... 3,614 329 3,018 196 1991.................................................... 3,546 275 2,963 181 1992.................................................... 3,462 318 2,927 266 1993.................................................... 3,397 362 2,800 383 ---------------------------------------------------------------------------------------------------------------- \1\Reprints are the number of applicants during the year. Source: Department of Veterans Affairs. WORKERS' COMPENSATION\34\ Workers' compensation programs provide cash and medical benefits to persons with job-related disabilities and survivors' benefits to dependents of those whose death resulted from a work-related accident or illness. In 1991, workers' compensation laws protected approximately 93.6 million workers in 51 jurisdictions, including the District of Columbia. Although the laws vary from State to State, the underlying principle is that employers should assume the costs of occupational disabilities without regard to fault. Prior to the enactment of workers' compensation laws (the first of which was in 1908), a worker was only protected in cases where employer negligence could be proven as the cause of injury or death. By 1949, all States had enacted laws to cover workers and their dependents in any case of occupational disability or death. --------------------------------------------------------------------------- \34\Drawn from William J. Nelson, Jr., ``Workers' Compensation: Coverage, Benefits, and Costs, 1989,'' Social Security Bulletin, Spring 1992/Vol. 55, No. 3, pp. 51-56, and ``Workers' Compensation: Coverage, Benefits, and Costs, 1990-91,'' Social Security Bulletin, Fall 1993/ Vol. 56, No. 3, pp. 68-74. --------------------------------------------------------------------------- Workers' compensation benefits are paid by insurance companies, special State insurance funds, or by employers acting as self-insurers. State programs are administered by industrial commissions or special units within State departments of labor. The Federal programs (except for a part of the Black Lung benefit program) are administered by the U.S. Department of Labor. Three-fourths of all compensable claims for workers' compensation benefits and one-fourth of all such cash benefits paid involve a temporary total disability; i.e., an employee is unable to work at all while he or she is recovering from the injury, but is expected to recover fully. Most States will pay benefits for the duration of the disability as long as the condition continues to improve with medical treatment. If the temporary total disability becomes permanent, most State laws provide for weekly benefits either for life or as long as the disability lasts. If a worker becomes permanently disabled (less than 1 percent of all claims), he or she may be eligible for cash benefits under both workers' compensation and the Social Security Disability Insurance (DI) program. The 1965 Amendments to the Social Security Act stipulate a reduction in Social Security payments so that total benefits under both programs do not exceed the higher of 80 percent of a workers' former earnings or the total family benefit under Social Security before the offset. The remaining disability claims filed under workers' compensation involve permanent partial disabilities of either major or minor severity. Benefits are paid to cover the cost of the injury (including permanent loss of function and handicap) and to compensate for future reduction in earnings due to the disability. Coverage Coverage is compulsory for most private employers except in New Jersey, South Carolina and Texas. If employers reject coverage in these States, they lose the use of common-law defenses against suits by employees. Many State programs exempt employees of nonprofit, charitable, or religious institutions, as well as very small employers, domestic and agricultural employment, and casual labor. The coverage of State and local public employees differs widely from one State program to another. In 1991, the proportion of covered workers was 87 percent, the same as it was in 1990. Wages and salaries of covered workers (total covered payroll) totaled $2,300 billion, representing 84 percent of all civilian wage and salary payments in that year and a 2.2 percent increase over 1990. Benefits Benefit levels are established by State formulas and are usually calculated as a percentage of weekly earnings at the time of injury or death (generally 66\2/3\ percent). Each State (and Federal Government for Federal workers) sets a maximum benefit level, which is periodically adjusted. Most often, maximum benefits range between two-thirds and 100 percent of the State's average weekly wage. As of January 1993, the maximum weekly benefit varied from $236 in Mississippi, to $769 in Connecticut and $1,249 for Federal employees. Workers' compensation benefits are calculated as a proportion of gross pre-injury or death earnings (in most cases) and are not subject to income taxes. Approximately $42.2 billion was provided in 1991 by workers' compensation programs in total benefit payments, including medical care and hospitalization benefits. This represents an increase of 10.3 percent over 1990. Increases in wages, medical costs, and the number of workers have all contributed the rise in payments, as well as rising maximum benefit levels. Benefit levels also are affected by changes in the incidence and severity of occupational injuries and diseases. Bureau of Labor Statistics' survey data indicate that the rate of on-the-job injuries and illnesses per 100 full-time workers was 8.4 in 1991, down from 8.8 in 1990. However, the number of workdays lost per case was 22.2, the highest in more than 50 years of collecting data (some of this may be due to improved record keeping and monitoring). Although occupational disease claims currently account for only about 2 percent of workers' compensation claims, the amendment and interpretation of State laws that cover illnesses with long latency periods is expected to increase this ratio. In addition, medical advances and improved technology are leading to the identification of different types of disorders. For example, circulation trauma disorder, caused by constant repetitive motion, pressure or vibration, was deemed the cause of 48 percent of all occupational illnesses in 1987, nearly double the rate 5 years before. Types of payments Payments for medical and hospital care for work-related injuries and illnesses totalled more than $16.8 billion in 1991, about 40 percent of the $42.2 billion paid under all workers' compensation programs. Cash compensation payments accounted for the remaining 60 percent of total expenditures. Of the $25.3 billion in such payments, more than 92 percent was paid to disabled workers, with the remainder going to workers' survivors. Black Lung benefit payments totaled $1.4 billion in 1991, which is a 25 percent decrease from the peak year of 1980. As older beneficiaries of Black Lung payments die and fewer new claimants enter the program, the payment level will continue to decline. Types of insurers Generally, employers insure against their workers' compensation liability through commercial insurance companies. However, they also may self-insure by providing proof of financial ability to carry their own risk (normally, large employers), purchase their insurance through a State ``fund'' (essentially, a State-run insurance company), or buy insurance commercially through a State-established ``high-risk'' insurance pool. Nearly half the States have ``competitive'' State funds, and employers may buy private insurance, self- insure, or buy from the State fund. In 2 States, employers must insure through an ``exclusive'' State fund, and in 4 States employers must self-insure or buy insurance from their exclusive State fund. In 1991, about 58 percent of all benefits were paid by private insurers, 23 percent by State funds or federally supported funding (Federal workers and black lung benefits), and 19 percent by self-insurers. Employer costs The cost to employers to provide workers' compensation to employees was $55.2 billion in 1991, a 4 percent increase over the 1990 figure. These costs include the benefits paid, administration of the insurance operation, claims processing, rehabilitation costs, profits, taxes, and reserves for future benefits. The insurance premium paid by employers varies with the risk involved and the employer's industrial classification with regards to the hazards of a particular industry, which may at times be modified by experience rating. In 1991, the components of employer costs were as follows: --$35.7 billion paid to private carriers; --$10.8 billion paid to State funds and for Federal programs (the Federal employee program and that part of the Black Lung benefits program financed by employers); and --$8.7 billion in the cost of self-insurance (benefits paid by self-insurers plus estimated administrative expenses). Rising employer costs for workers' compensation now represent $590 for each worker protected by workers' compensation programs, compared with $296 in 1982. Employers' costs per $100 of covered payroll also have grown: in 1991, they averaged $2.40 per $100 of payroll, up from $1.75 in 1982. Program data Table 18-43 shows the estimated number of workers covered and the total annual payroll in covered employment for selected years between 1948 and 1991. Over that time period, the number of workers covered in an average month increased from 36.0 to 93.6 million, and the amount of total payroll in covered employment increased from $105 billion to $2,300 billion. Table 18-44 illustrates the benefit payment amounts under workers' compensation by type of benefit for years 1987, 1988, 1989, 1990, and 1991. In 1991, total benefits paid equaled $42,169 million, of which $40,778 was paid in regular benefits and $1,391 for the Black Lung benefit program. TABLE 18-43.--ESTIMATED NUMBER OF WORKERS COVERED IN AVERAGE MONTH AND TOTAL ANNUAL PAYROLL IN COVERED EMPLOYMENT, BY SELECTED YEARS, 1948-91\1\ ---------------------------------------------------------------------------------------------------------------- Workers covered in average Total payroll in covered month employment ---------------------------------------------------------- Percent of Percent of Year Number (in employed Amount (in civilian wage millions) wage and billions) and salary salary disbursements workers\2\ ---------------------------------------------------------------------------------------------------------------- 1948................................................. 36.0 77.0 $105 79.9 1953................................................. 40.7 80.0 154 81.5 1958................................................. 42.5 80.2 192 83.1 1963................................................. 47.3 80.5 254 83.7 1968................................................. 56.8 83.8 376 83.0 1973................................................. 66.3 86.3 578 84.2 1978................................................. 75.6 86.7 922 84.3 1983................................................. 78.0 85.6 1,382 84.6 1988................................................. 91.3 87.0 2,000 84.2 1990................................................. 95.1 87.0 2,250 84.0 1991................................................. 93.6 87.0 2,300 84.0 ---------------------------------------------------------------------------------------------------------------- \1\Before 1963, excludes Alaska and Hawaii. \2\Beginning 1968, excludes those under age 16 and includes certain workers previously classified as self- employed. Source: Social Security Bulletin, March 1991 and Fall 1993, Social Security Administration. TABLE 18-44.--ESTIMATED WORKERS' COMPENSATION BENEFIT PAYMENT AMOUNTS, BY TYPE OF BENEFIT, 1987-91 [In millions] ------------------------------------------------------------------------ Type of benefit 1987 1988 1989 1990 1991 ------------------------------------------------------------------------ Regular Program. $25,773 $29,234 $32,837 $36,804 $40,778 ------------------------------------------------- Medical and hospitalization...... 9,794 11,401 13,299 15,067 16,715 Compensation.......... 15,979 17,833 19,538 21,737 24,063 Disability........ 15,046 16,956 18,553 20,635 22,840 Survivor.......... 933 877 985 1,102 1,223 ================================================= Black Lung Program........ 1,545 1,499 1,479 1,434 1,391 ------------------------------------------------- Medical and hospitalization...... 118 117 125 120 117 Compensation.......... 1,426 1,381 1,354 1,314 1,274 Disability........ 698 657 618 577 533 Survivor.......... 729 725 736 737 741 ================================================= Total (Regular and Black Lung) 27,318 30,733 34,316 38,238 42,169 Medical and hospitalization...... 9,912 11,518 13,424 15,187 16,832 Compensation.......... 17,406 19,215 20,892 23,051 25,337 Disability........ 15,775 17,613 19,171 21,212 23,373 Survivor.......... 1,631 1,602 1,721 1,839 1,964 ------------------------------------------------------------------------ Source: Social Security Bulletin, March 1991 and Fall 1993, Social Security Administration.