The voices of Urban Institute's researchers and staff
December 14, 2016

How to fix the safety net when it causes instability in families’ lives

December 15, 2016

Over the next two weeks, Urban scholars are reflecting on how different aspects of children’s lives affect family instability and their healthy development. This team of scholars recently released a report laying out insights from an exploration of what research is needed to stabilize the lives of children and families. This work is part of Urban’s Kids in Context Initiative.

The public safety net plays a vital role in cushioning children when their families fall on hard times, but can it also inadvertently contribute to family instability?

The bad news is that, yes, the safety net can sometimes play a destabilizing role. The good news is that we can tighten the knots on the safety net and prevent this instability.

Public supports such as unemployment and disability insurance, cash and nutrition assistance, Medicaid and child assistance help stabilize family resources when parents lose work or when family earnings are too low to fully support child development and well-being. 

But those same programs can cause instability in families’ lives when breakdowns in benefit renewal procedures cause families to temporarily lose benefits. Between 13 and 39 percent of renewal notices for child care and nutrition assistance result in a case closing and then reopening within three months, according to data from Idaho and Rhode Island. These surprisingly high rates of program churn echo findings from an earlier six-state study, which found that between 17 and 28 percent of nutrition assistance cases had at least one temporary gap in benefits in a year, with most off the program for a month or less.

A family might not know their benefits are cut off until they swipe their Electronic Benefits Transfer card at the grocery store or present their Medicaid card to the drug store and the purchase is denied. To regain benefits, families often need to complete a new application, a costly process for both families and agencies.

State agencies can reduce family instability by improving renewal processes:

  1. Make renewal processes more client friendly. Some states are streamlining renewal forms and prepopulating them with known information (e.g., client contact information) so that they are easier for clients to complete. Other states allow clients to complete renewals online, over the phone, or via e-mail. These options are required for Medicaid under the Affordable Care Act and are good practice for other safety net programs.  
  2. Use electronic data already on file to automatically renew eligibility for benefits, so no direct client action is necessary. The number of Medicaid renewals that closed for procedural reasons dropped dramatically in Idaho after implementation of the Affordable Care Act and the use of electronic data, including Supplemental Nutrition Assistance Program records, to automatically renew eligibility. There were so few procedural closures in 2014–15 that the churn rate dropped to near zero.  
  3. Lengthen the certification period to reduce the number of renewal risk points faced each year. In Rhode Island, the proportion of child care assistance families who were sent renewal forms dropped from 800 to 500 per month after the state lengthened maximum certification periods from 6 to 12 months. Because of this drop, the number of cases churned dropped from 5.3 to 3.1 percent of the average monthly caseload, a 43 percent reduction between 2012 and 2015.

The Affordable Care Act emphasizes simplified, data-driven policies and procedures for renewing Medicaid, and the Child Care and Development Block Grant Act of 2014 requires states to implement 12-month certification periods for child care assistance. Despite this legislation and the successes some states have experienced, many states continue with their traditional and burdensome renewal procedures. 

How can we motivate states to tackle high rates of safety net program churn? The success of neighboring states may motivate some. The threat of being out of compliance with federal mandates may motivate others. But perhaps the biggest motivation is the growing evidence of the negative effects of instability on children and families.

The safety net’s goal is to cushion families from job loss, income shocks, and other sources of instability. It would be a sad irony if safety net policies, particularly renewal procedures, end up adding additional instability to the already challenging circumstances facing many families with children.

Sophia DeLoatche hugs her brother Charlie, 12, after he arrives home from school in Falls Church, VA, October 21, 2015. Charlie has Down syndrome and a host of other medical complications that require round-the-clock care. Some families have been on a waiting list for years in Virginia for Medicaid vouchers that would finance various aspects of health care. Photo by Evelyn Hockstein/For The Washington Post via Getty Images

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