Federal Report: 40 Percent Qualify for Need-Tested Benefits

Terry Jeffrey
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Posted: Jan 27, 2016 12:01 AM
Federal Report: 40 Percent Qualify for Need-Tested Benefits

As of December 2012, the total population of the United States -- including members of the Armed Forces stationed overseas -- equaled 315,255,012, according to the Census Bureau's estimate.

At some time during 2012, according to a study the Congressional Research Service published last month, approximately 134,800,000 people qualified for one or more of "nine major need-tested benefit programs" and approximately 106,000,000 actually received benefits from at least one of them.

That means about 42.7 percent of the U.S population was eligible for one or more of these government benefit programs at some time during 2012 and about 33.6 percent actually received a benefit.

The CRS Report -- "Need-Tested Benefits: Estimated Eligibility and Benefit Receipt by Families and Individuals" -- looked at eligibility and receipt of benefits from: the Supplemental Nutrition Assistance Program (commonly known as food stamps), the refundable Earned Income Tax Credit, the refundable Additional Child Tax Credit, Supplemental Security Income, housing assistance, WIC (Women, Infants and Children), Temporary Assistance for Needy Families, the Child Care and Development Fund and the Low-Income Home Energy Assistance Program.

Importantly, the study looked at Medicaid separately and did not factor Medicaid into its overall estimates of how many people were eligible for and how many people actually received need-tested benefits during the year.

The report presented its first key finding in response to this question: "How many people are eligible for need-tested benefits, and how many actually receive them?"

"In 2012," CRS said, "the total number of people who were estimated as eligible for at least one of the need-tested programs examined in this report was 135 million, residing in 58 million families, or more than 4 in 10 persons among the nation's non-institutionalized population. In that same year, the total number of people who were estimated to have actually received at least one of these need-tested benefits totaled 106 million, residing in 42 million families. Many families that are eligible for benefits do not receive them, although the rate at which eligible families actually receive benefits varies by program. In 2012, an estimated 70 percent of eligible persons received SNAP benefits; however, an estimated 28 percent of eligible persons received TANF, and an estimated 17 percent of eligible children received child care subsidies from the CCDF."

In Figure 1 of its report, CRS specifies that 134.8 million people were estimated to be eligible for at least one of the nine programs in question and in Figure 2 it specifies that 106.0 million were estimated to actually have received benefits from one or more of them during the year.

"An estimated 106 million persons (1 in 3 persons in the population) actually received benefits from one of these programs in 2012," says the report's summary.

The CRS made its estimates using Census Bureau survey data and a microsimulation model aptly called the Transfer Income Model.

"While the federal government supports a number of need-tested benefit programs, uniform data on eligibility, participation, and benefits across programs are generally available only from household surveys," said the report. "However, respondents from those surveys tend to under-report receipt of need-tested assistance. Thus, this report combines information from a Census household survey with estimates from a microsimulation model, the third version of the Transfer Income Model (TRIM3). The need-tested benefit programs examined in this report are limited to nine cash or in-kind transfer programs and tax provisions for which eligibility, benefit receipt, and benefit amounts are estimated by TRIM3."

Why was Medicaid not factored into its main conclusions and numbers? A section of the report titled "The Special Case of Medicaid" provided an explanation.

"Medicaid is not included in the central analysis of this report. Rather, it is discussed separately (in Appendix B) for several reasons," said the report. "TRIM3 did not include estimates of Medicaid enrollment and the value of benefits for 2012. This report focuses on receipt of need-tested benefits in 2012. However, the Affordable Care Act (ACA) made substantial changes to Medicaid eligibility, which became effective in 2014. Thus, the picture of Medicaid today and in future years might be significantly different from that of 2012."

Obamacare, in fact, increased eligibility for Medicaid. Thus, it is reasonable to conclude, it is a force that will tend to drive up the number of people eligible for and receiving "need-tested" government benefits.

Four years ago -- before full implementation of Obamacare -- welfare programs had already established a widespread culture of dependency in this country. The question now: When will it become irreversible?