The Iowa Department of Human Services would have to either create a new system or pay a third-party vendor for expanded identity and asset checks of applicants for public assistance under a bill that advanced Monday in the Iowa Senate.
Sen. Jason Schultz, R-Schleswig, said Senate Study Bill 1125 was aimed at improving efficiency. “All we’re doing is trying to make the asset verification, the identification verification, their location, try to make sure that that can be done efficiently as possible and as accurately as possible,” Schultz said.
Advocates for the bill included a national non-profit advocacy firm, Opportunity Solutions Project, which has also lobbied against Medicaid expansion around the country.
Scott Centorino, a visiting fellow with Opportunity Solutions, told lawmakers at a subcommittee meeting the state has a high rate of improper payments in its public assistance programs. “This is a real problem for Iowa. The improper payment rate in Iowa is almost 12-and-a-half percent. And that about five points higher than the national average. And it’s actually higher than every single neighboring state around Iowa,” he said.
Opponents of the bill argued it would increase the burden on needy people, including people with mental illnesses or disabilities and those with limited English proficiency, to comply with more eligibility requirements.
Sen. Liz Mathis, D-Hiawatha, opposed the bill. She said her community saw an enormous increase in the need for food assistance because of a natural disaster, the August derecho storm, coming on top of the COVID-19 pandemic.
“And we saw a number of people who had never been on food assistance, ask for food assistance, and that’s when it works the most,” Mathis said. “It was a lot of paperwork, we had long lines, DHS came out and they did a yeoman’s job in helping people get food. … And I can’t imagine the obstacles that a third party verification system would cause to something like that.”
Sen. Zach Whiting, R-Spirit Lake, voted to advance the bill. In a statement written by Whiting and read by Schultz, Whiting cited “significant fraud” in Iowa’s program.
Schultz, however, argued that relatively few people would lose benefits due to the expanded eligibility checks. He said the third-party vendor would not be able to kick anyone off benefits but instead would allow DHS to focus their attention on a relatively small percentage of people whose eligibility check raised questions.
“I believe that 85 to 90 percent of recipients would slide through this system, probably without providing documentation or supporting documents simply because these eligibility checks could do that for them. And it would actually make their experience easier,” Schultz said. “And then focus all of the energy only on the 10 to 15 percent who have a flag come up. Most of those will probably be moved through into the system as well.”
A representative from DHS told a Senate subcommittee that some provisions of the bill run counter to federal rules and might duplicate ongoing projects. Janee Harvey, administrator of the Division of Adult, Children and Family Services at DHS, said Iowa has already volunteered for early adoption of a federal program to institute the National Accuracy Clearinghouse. The database will be required for all states by the end of 2021 to be used for eligibility checks for the Supplemental Nutrition Assistance Program (SNAP).
The department is also exploring a pilot project with Equifax, a private credit reporting agency, that would provide free access to its software system for a year, Harvey said. That project would provide the state with “robust data” that would help the state determine the return on investment of using Equifax’s product, she said.
Harvey noted that DHS had a previous contract beginning in 2015 with a private vendor for an income verification system. The money allocated to the six-year contract was spent after four years, she said.
“While the income verification products are more sophisticated today and have access to more data sources than they did five years ago, legislators should be aware that the cost of this contract was not offset by a savings achieved through the promise of income verification services,” Harvey said.
Senate Republicans have tried for several years to advance similar legislation. Last year, the nonpartisan Legislative Services Agency found the proposal, which included quarterly checks on eligibility, would cost an estimated $24 million a year when the program was fully implemented, mainly due to a large increase in administrative staff and investigators in DHS and the Department of Inspections and Appeals