#means testing

This ties in nicely with an old (ongoing) post/philosophy of mine that I have discussed here numerous times: “Means Testing is a conservative canard; a disingenuous red herring”:

Verifying a workers’ income for government health insurance, and Equifax’s capture of that function, is just one illustrative component of the Rube Goldberg machine that comprises America’s rigorously means-tested safety net and its vulnerability to corporate capture. Complex eligibility rules and administrative hurdles to determine who deserves coverage and who does not are fractured across government agencies and jurisdictions. Many research studies, magazine spreads, and books have documented how this complexity keeps millions of eligible people from accessing billions of dollars in benefits they are entitled to – the unemployed are locked out of their unemployment insurance, the uninsured are never enrolled in their health coverage, and the hungry are denied food assistance. Vice President Harris’ announcement of “a student loan debt forgiveness program for Pell Grant recipients who start a business that operates for three years in disadvantaged communities” is perhaps the best recent caricature of how increasingly complex eligibility rules have failed to deliver for millions of Americans. And this labyrinth of eligibility rules doesn’t just fail the intended beneficiaries – the administrative complexity they create presents an enormous opportunity for profit by government contractors. After the COVID-19 Public Health Emergency was ended by Congress in 2023, I led a government team at the United States Digital Service to help fix state Medicaid systems that had fallen into crisis. As we rushed to put out fires in Red and Blue states alike we encountered the same problem – entrenched government contractors like Deloitte had charged millions to build error–prone systems that state governments had no capacity to fix. Billing by the hour, growing the complexity and incomprehensibility of these systems proved profitable. Changes that my team could make in minutes were quoted as requiring hundreds of billable hours. When we discovered that nearly 500,000 children had lost their health coverage improperly because of software errors, many system contractors were painfully slow to reinstate coverage for those children and fix the errors.

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Again, new work requirements for Medicaid highlight the profits to be made from adding complexity to the safety net. Since Georgia implemented work requirements in 2020, they have spent twice as much on Deloitte consultants and administrative costs as on healthcare for people. As the other 55 states and territories are now forced to join Georgia and implement new work requirements, millions will lose their healthcare and Deloitte will cash in.

Abdallah Fayyad at Vox:

In an ideal world, everyone who qualifies for an aid program ought to receive its benefits. But the reality is that this is often not the case. Before the pandemic, for example, nearly one-fifth of Americans who qualified for food stamps didn’t receive them. In fact, millions of Americans who are eligible for existing social welfare programs don’t receive all of the benefits they are entitled to.

[...] Means testing a given social program can have good intentions: Target spending toward the people who need it most. After all, if middle- or high-income people who can afford their groceries or rent get federal assistance in paying for those things, then wouldn’t there be less money to go around for the people who actually need it? The answer isn’t so straightforward.

How means testing can sabotage policy goals

Implementing strict eligibility requirements can be extremely tedious and have unintended consequences. For starters, let’s look at one of the main reasons lawmakers advocate for means testing: saving taxpayers’ money. But that’s not always what happens. “Though they’re usually framed as ways of curbing government spending, means-tested benefits are often more expensive to provide, on average, than universal benefits, simply because of the administrative support needed to vet and process applicants,” my colleague Li Zhou wrote in 2021. More than that, means testing reduces how effective antipoverty programs can be because a lot of people miss out on benefits. As Zhou points out, figuring out who qualifies for welfare takes a lot of work, both from the government and potential recipients who have to fill out onerous applications. The paperwork can be daunting and can discourage people from applying. It can also result in errors or delays that would easily be avoided if a program is universal.

There’s also the fact that creating an income threshold creates incentives for people to avoid advancing in their careers or take a higher-paying job. One woman I interviewed a few years ago, for example, told me that after she started a job as a medical assistant and lost access to benefits like food stamps, it became harder to make ends meet for her and her daughter. When lawmakers aggressively means test programs, people like her are often left behind, making it harder to transition out of poverty.

As a result, means testing can seriously limit a welfare program’s potential. According to a report by the Urban Institute, for example, the United States can reduce poverty by more than 30 percent just by ensuring that everyone who is eligible for an existing program receives its benefits. One way to do that is for lawmakers to make more welfare programs universal instead of means-tested.

Why universal programs are a better choice

There sometimes is an aversion to universal programs because they’re viewed as unnecessarily expensive. But universal programs are often the better choice because of one very simple fact: They are generally much easier and less expensive to administer. Two examples of this are some of the most popular social programs in the country: Social Security and Medicare. Universal programs might also create less division among taxpayers as to how their money ought to be spent. A lot of opposition to welfare programs comes from the fact that some people simply don’t want to pay for programs they don’t directly benefit from, so eliminating that as a factor can create more support for a given program. In 2023, following a handful of other states, Minnesota implemented a universal school meal program where all students get free meals. This was in response to the problems that arise when means testing goes too far. Across the country, students in public school pay for their meals depending on their family’s income. But this system has stigmatized students who get a free meal. According to one study, 42 percent of eligible families reported that their kids are less likely to eat their school meal because of the stigma around it.

Listen: any Presidential candidate who demonstrates 60 days of taking a stand against arms sales to Israel while not spreading easily debunked propaganda about October 7th is eligible for my vote!

A good example is the self inflicted anxiety about rich people benefiting passively from free public transit. I've seen policy makers go "we don't want our richer citizens getting free fare." Rich people don't take the fucking bus. That's been cited as an issue before, that people who drive don't take the bus, so it doesn't cut down on carbon emissions to fund it. But we use taxes to make those people's highways and parking garages, we spend millions on scooters and rented bikes and subsidizing rideshare, we divert bus routes to places only college students and office workers go and away from the poorest neighborhoods, who often don't even have a stop near them.

And some of the biggest employers and schools and colleges ALREADY OFFER free fare to students and employees. They get sweetheart deals where they pay a bulk amount for non-means tested free public transit. It means the largest demographic of receivers of free fare aren't destitute citizens, but abused workers and college kids from out of town, who leave as soon as they can't get around the city for free anymore. It means your school or workplace can hold that over your head, which they regularly do.