Texas’ Convoluted Argument Against Asset Limit Reform

In Texas, the Affordable Care Act’s upcoming elimination of the Medicaid asset limit is causing a stir among certain state officials, who claim that doing away with the asset evaluation “could increase costs and decrease efficiency in processing Medicaid applications.”

 Wait, what?

As we’ve written many times before, eliminating asset limits has actually been found to significantly increase administrative efficiency, without corresponding increases in caseload. Evaluating assets is a “time-consuming and error-prone”process that detracts from the time overburdened caseworkers have to spend on job search assistance and other important aspects of case management. This is why Texas is one of only ten states that have maintained an asset test for SNAP (and one of only three to maintain a limit for children’s Medicaid). But don’t take my word for it; states themselves have reported a range of efficiency gains from asset limit reforms across programs:

• In Colorado, the Department of Human Services forecasted that eliminating the TANF asset limit would save up to 90 minutes per new case in the first 45 days
• Oklahoma, one of the first states to eliminate its Medicaid asset limit, benefited from over $1 million in administrative savings and saw the time required for its average eligibility determination drop from 45 days to 5 days
• In response to our survey last year, SNAP and TANF administrators from across the country reported that asset test reform simplified the application process for both agency staff and applicants

Yet it’s also true that aligning policies across programs can increase efficiency and streamline application processes, which is at the heart of Texas’ claim. Eliminating the asset test in Medicaid, they allege, would reduce efficiency by requiring caseworkers to separately evaluate eligibility for Medicaid from eligibility for SNAP and TANF, which both have asset tests in place.

But here’s the thing: while Texas’ existing policies may all require asset testing, they’re hardly consistent. The most “generous” limit is for SNAP, which allows families to have up to $5000 in savings and one vehicle worth up to $15,000. For Medicaid, the limit is $2000, while families applying for TANF are restricted to a mere $1000; this is the lowest limit in the country. For TANF, the value of vehicles worth over $4650 is counted toward the limit, while Medicaid permits one vehicle per disabled household member.

For the sake of readability, I’m leaving out a lot of the details here about what specifically counts as an “asset” for each program – but that illustrates the point. Asset limits are often arbitrary, complicated and can be confusing for both applicants and eligibility workers, which can lead to payment errors. As one administrator from Ohio explained in an interview, “from radiation exposure compensation to Agent Orange settlements, to Japanese ancestry permanent resident survivors’ benefits…there’s just so many different exclusions [to the SNAP asset limit]…so accuracy for that is hard.”

So here’s an idea: instead of splitting up the screening processes for Medicaid and SNAP and TANF, perhaps Texas should use the ACA expansion as an opportunity to modernize all its asset limit policies at once, joining the ranks of Maryland, Illinois, Alabama, Louisiana and Ohio. What’s more, there’s funding available specifically to help states align their eligibility evaluations across programs and upgrade their technology. Our friends at CLASP have a great set of resources about how states can take advantage of this moment to integrate their systems and increase efficiency.

Looking for more info on asset limits? You’ve come to the right place – check out our new website, policy statement, SNAP issue brief, and policy paper for more on how these policies affect benefit access and administration.