Iowans receiving public assistance benefits would face new "asset tests" and regular checks to determine their eligibility under a bill that passed the Senate Wednesday — a move that a nonpartisan state agency predicts will remove thousands of Iowans from the programs.
Senate File 494 would change eligibility requirements for a family to receive food and health care assistance from the state, and would create regular checks to check whether recipients still qualify for the program.
The Iowa Senate voted 34-16 to pass the bill Wednesday, with every Republican in favor and every Democrat opposed.
Republicans say the changes will reduce errors and lead to lower costs for the state.
"Whether it’s a federal program or state program, these are tax dollars being issued to individuals erroneously," said Sen. Jeff Edler, R-State Center. "We have a responsibility as elected officials to ensure that tax dollars are being responsibly allocated."
Democrats said the legislation would create unnecessary barriers for low-income Iowans to access assistance programs.
“Too many Iowans are hungry, rural and urban alike. This bill will make it harder for them to apply," said Sen. Janice Weiner, D-Iowa City. "Fraud is negligible. We like to say that Iowa feeds the world. Shouldn’t that start right here at home, with our own people?"
What does the public assistance bill do?
The wide-ranging bill would require state agencies that deliver benefits, such as the Department of Health and Human Services and Iowa Workforce Development, to check new sources of information to determine if Iowans are eligible.
The bill would require Medicaid recipients in Iowa to cooperate with child support services as a condition of receiving benefits through the program.
Any Iowa households with liquid assets of more than $15,000 would not be allowed to receive Supplemental Nutrition Assistance Program, or SNAP, benefits. The limit would not count the value of a home, the household's first car and up to $10,000 of the value of a second household car.
How many Iowans receive SNAP benefits?
An average of 287,000 received SNAP benefits each month in fiscal year 2022, according to an analysis of the bill from the nonpartisan Legislative Services Agency.
Iowans statewide received an average $60.4 million in SNAP benefits each month in fiscal year 2022. Those benefits are paid entirely by the federal government.
Iowa splits the cost of administering SNAP with the federal government and the state spent $2.2 million on SNAP administration in fiscal year 2022.
Through agency policy, Iowa currently offers SNAP benefits to households making less than 160% of the federal poverty level. The bill would codify that amount into law.
The federal government requires SNAP benefits to be offered to those making at least 130% of the federal poverty level.
How many Iowans would lose their benefits?
The Legislative Services Agency estimates that, beginning in fiscal year 2026, about 1% of Iowans will have their benefits canceled "due to discrepancies."
That means about 8,000 Medicaid recipients and 2,800 SNAP recipients would be kicked out of the programs.
The Legislative Services Agency estimated 600 people would be removed from the Children's Health Insurance Program (CHIP) and 100 would be removed from the Family Investment Program.
How much would it cost for the state to run these new asset tests?
The bill is expected to cost the state an additional $17.2 million over its first three years, according to the nonpartisan analysis.
Much of that cost is because of the need for the state to hire an estimated 231 positions at Iowa's Health and Human Services Department and one position at Iowa Workforce Development.
The new requirements will need an updated IT system, which would have a one-time cost of about $20.3 million, of which $11.6 million would come from the state.
If the state hires a private company to run eligibility checks on public assistance recipients, the analysis estimates that would cost $7 million in fiscal year 2027, of which $3.3 million would be state funds.
The analysis assumes a contract with a private company would cost $500,000 annually with a 10% contingency payment based on total savings.
How much money would the state save on benefits?
After the first three years of the new requirements, the bill is expected to decrease state costs by $7.8 million per year, the analysis states.
Including federal dollars, the bill would decrease taxpayer spending by $41.3 million in its fourth year, according to the analysis.
Sen. Sarah Trone Garriott, D-Waukee, said just because the state isn't spending money on those benefits doesn't mean those families don't need the assistance.
"The bulk of savings is due to Medicaid disenrollment. This is not an indication that these Iowans don’t need help," Trone Garriott said. "These are still struggling people who are very poor, and they will have their benefits canceled because of discrepancies, or won’t be able to qualify because of new standards.”
Senate bill does not include restrictions on pop and candy
The Iowa House has a similar bill to require asset tests and work requirements for the recipients of some public assistance programs.
Iowa would need a federal waiver from the U.S. Department of Agriculture to implement such a requirement, and the department has not granted such waivers to other states.
A Des Moines Register/Mediacom Iowa Poll found that a majority of Iowans, 57%, approve of a ban on using SNAP funds to buy candy and pop, while 40% are opposed and 4% are not sure.
Stephen Gruber-Miller covers the Iowa Statehouse and politics for the Register. He can be reached by email at email@example.com or by phone at 515-284-8169. Follow him on Twitter at @sgrubermiller.
This article originally appeared on Des Moines Register: Iowa Senate passes bill to add asset test to public assistance eligibility