ALC - Hospital, Medicaid, - Developmental Disabilities Study Subcommittee
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- October 4, 2026
Senator Jane English
Unverified
0:00
Good afternoon, everybody. Welcome to the committee meeting, and we have a full agenda today. First thing off the bat is we have Cody Waits, who is the Executive Director of the Arkansas Workforce Connections, and Eddie Thomas, who is the Director of the Office of Employment and Training. So we've all talked a lot recently about their efforts, the Department of Workforce Services efforts, and have submitted a waiver request to the Department of Labor,
and we're hopeful that that's going to happen. And so we kind of like to think about, so what happens after that if we're lucky enough to get it, which I think most of us
are feeling pretty 99% sure that it's going to happen. We just don't know exactly when. But then what kind of a plan are we looking for afterwards? So, gentlemen, if you would introduce yourselves. For the record. Sure. Cody Waits, Executive
Speaker 5
0:59
Director of Workforce Connections, Department of Commerce. Eddie Thomas, Department of Commerce, Director of Office of Employment and Training.
Senator Jane English
Unverified
1:05
And if you guys would just pull your microphones up close to you, that would be very
Speaker 8
1:12
helpful. Thank you. There you go. Go ahead. Yeah, thank you. Sorry, just literally got off a plane from D.C. meeting with the Department of Labor on some things in addition to the waiver package. But, you know, just as a recap, you know, we submitted nine waivers to the Department of Labor. Two of those were kind of governance structure focused with state board function as a local board and state board composition flexibility. Kind of one that was really focused on strategic initiatives and strategic
plans, state plans, one funding kind of waiver that talks about flexibility to move funds, infrastructure, flexibility to operate affiliate centers across the state, comprehensive kind of type model. And then we're kind of four programmatic waivers that we'd submitted as well. One is kind of like a last dollar in waiver where right now we have to be the last dollar in to pay for a lot of things. We'd like some flexibility around that as well. And then some other waivers around youth and things of that nature. There were some questions around the last time, and I think we presented and shared some information back to BLR.
Not sure if everybody's gotten that or not, but that was circulated. So, you know, right now from the last time we were here, there's really been no updates as it relates from DL. We have had some back and forth and some clarification on some just via email around different, you know, material things within the waiver package itself and how it was submitted. And so DOL will reach back out to us and we'll have some conversations back and forth with them. But again, we're supposed to be notified kind of of the status of our state plan by the end of this month. I think we submitted it on May 29th, something like that.
And so they have until August 29th to get back to us, at which point we'll either find out whether the waiver package was approved in full, whether some of the waivers were approved and some weren't approved. And then, obviously, the kind of the approval of the state's first combined Perkins-Weowa state plan, which is something we're very proud of doing. So happy to answer any questions. And then, again, you know, once the waiver package is either approved or denied, we would start to, you know, either start the transition process and start having those conversations and then what comes next. So happy to answer any questions.
Representative Mary Bentley
Unverified
3:12
Representative Bentley, thank you all for being here today. appreciate that and i know we saw recently that louisiana did get uh some of the waivers but some denied you know does that when you look at what was denied to them does that give you any thoughts that maybe some of those that might that we requested may not get granted as well or do we have some similar do we have some similar waiver requests that they had that were denied i guess it was my question we do we have similar waiver requests
Speaker 15
3:35
that were both approved i'm not exactly sure about the denial list i don't know if you've looked at their
Speaker 8
3:40
denial list so eddie can certainly speak to that um but you know there's some other states too that have had some approvals and
denials as well oklahoma is another one who submitted some similar type waiver packages that had some denials new mexico i think submitted some similar type waiver packages and had some denials as well but louisiana i think is the one that most closely aligns with what we've done and so the state board function as a local board is one that louisiana got approved that oklahoma did not um when we kind of look at how ours is structured um it's similarly more towards what what louisiana has versus oklahoma so eddie do you want to
Speaker 18
4:10
make any more comments on the yeah I think you're spot on, Director Waits. I think some of the comparison between our state and Louisiana,
we make sure that we really kind of spelled out and made it clear the implementation and transition plan. That's one of the things that DOL bragged on in terms of Louisiana. Oklahoma, on the opposite end of that, they had a pretty good structure, they had a pretty good plan, but they didn't have the specifics detail within their waiver request. And so those are some notes that we received and we did some analysis on other states that were also approved and denied, and we think we're more closely aligned with Louisiana. Well, we appreciate the great job you
Representative Mary Bentley
Unverified
4:41
guys are doing. So can you cast us just a little vision? I know you haven't got to prove yet, but cast us just a little vision, some things that you would like to see,
not specifically that, you know, but Eddie, cast us a little vision of what you'd like to see once these waivers
Speaker 18
4:55
are approved. Yeah, absolutely. I think one of the things that we talked about a whole lot within our state plan overall was being able to maximize the public investment dollars that are coming to Arkansas and how we utilize those. We also want to reduce administrative complexity. Within the current structure, we know with 10 local workforce development boards and all of the administrative costs and other things that are associated with that, we're not able to invest into direct participant services the way we need to.
And so above everything, we're doing this to make sure that individuals in Arkansas are having access to the support and resources they need for training and supportive services. And so that's the overall thing. And then in terms of kind of like policy and overall vision, we want to make sure that we're busting down, for the lack of better words, all of the silos and all the fragment implemented systems that are currently in place and streamlining them into one consolidated state board and i would just say and just to add on to that i think if you're looking kind of
Speaker 8
5:49
for a timeline of events maybe you know one of the things that we talked about was through the state
workforce development board putting together a transition committee so of those board members setting up a committee that would kind of help facilitate the transition as we start to implement kind of the waiver package and in the plan that would that would begin pretty much in september if the waiver package is approved and we get the response in time then you start to talk about you know state policy revisions so when the state workforce development board assumes roles of the local workforce development board they have to adopt some certain policies and things of that nature so you're talking about that I think our state board meeting is in October scheduled for
October so as the transition committee's meeting through September we have some policies and some decisions that have to be made on in October and then you have to kind of get trained all the board members have to get trained on some of the new roles that they're going to assume legislation to follow in the session to clarify some different things in Arkansas state law and then when you start to think about the actual you know functional role that the state board would play as the local board and the state staff taking over some of those case management responsibilities at a statewide level in local offices we would have to start recruiting and hiring for those positions
that we would need and so that's going to be you know from you know at the end of this month through july of next year great so i
Representative Mary Bentley
Unverified
7:04
uh senator english and i yesterday we're able to hear some great things that are going on and smack over with regards to lithium some good things that we've going to get on with our veterans and also some things i know great things are going over at new core new core steel and those are gone so i'm really excited about the flexibility that we're going to be able to have as new new things emerge in arkansas down in camden where things going on with google i'm understanding he's got so much going on i'm just really excited about the flexibility that we'll be able to have so i think we can um can you share our arkansas that
So this will allow us to even get more training across the state as we see new technologies arise and
Senator Jane English
Unverified
7:38
new things happen across the state. And I think
that one of the things that we're looking at, which I love, is beginning to look at a bigger system rather than just a number of federal programs. That we're looking at, as Representative Bentley has said, we've got so many things going on, so many opportunities out there. We want everybody to be able to take advantage of everything that's out there, not just a few people, and not just talking about federal programs.
So we're excited. We'll be back with you again. We want to know more details all the time, so
thank you very much for being here. Absolutely. Thank you. The other thing that's very important to this whole effort that we have with our workforce and social program reform
that we really haven't spent much time on is benefit clips. Oh, I'm sorry. I'm sorry.
Representative Denise Jones Ennett
Unverified
8:35
Denise? Yes. Thank you, Madam Chair. I have a question, Mr. Waits. With this waiver or these waivers, does any of these waivers address anything dealing with people with disabilities, supporting them more in the workforce? Not
Speaker 15
8:54
directly. These waivers are really focused on Titles I and III of WIOA. workforce innovation opportunity act vocational rehabilitation is title four of the workforce innovation opportunity act two separate funding streams two separate federal agencies
Speaker 8
9:09
you know indirectly possibly but but not directly to the day-to-day activities of ars or dsb thank you
Senator Jane English
Unverified
9:20
thank you madam chair and glad you're doing well thank you very much gentlemen thank you okay so getting back one of the things that is really important that we haven't spent much time talking about is benefit cliffs and how does that actually affect our efforts as we're trying to move people to self-sufficiency and with all of our federal programs. So today we are fortunate
to have on our Zoom Eric Randolph, who's the Director of Research at the Georgia Center for Opportunity, Les Ford, the Senior Fellow for the Alliance for Opportunity, Heather Webb is the Director of Operations and Development, Arkansas Family Alliance. And Molly Palmer is the Vice President of Communications and Engagement at the heart of Arkansas United Way. So welcome to you all, and I'll just turn it over to you. Are they hooked up?
Speaker 40
10:21
Oh, that's okay. Do we have them hooked? Yes. Do you want me to begin? Yeah, go ahead. So I'm glad to see you again, Senator English and Representative Bentley. I was here in Arkansas last fall, and I really like Arkansas. I like the people. Everybody was friendly, at least to me. And I really enjoyed it.
I'm also a big fan of Douglas MacArthur. And he's from Arkansas, so at least he was born and raised in Arkansas. But so thank you for this opportunity. I want to just jump into the here. Let me share my screen. Let me just share my screen real quick. Can you see my screen? OK, I want to just jump into it because this is a fairly, I guess, complex topic.
And there's a lot of ground to cover. So I might just kind of skip over some of the things in the testimony that was up front and get right to the heart of the issue. That's OK with you. That's fine. Thanks. All right. OK. And then if I go too fast, because I've been working with this issue since 2011 and I'm really familiar with everything. So if I say something too fast or, you know, something is not quite, you know, clear to you because I've seen it so many times, just let me know and I'll back up a little bit and explain it.
But basically, what I want to do is I want to hit, you know, just generally what are benefit clips and I want to present in a way that they're easy to understand. What are solutions in general, just some general comments. Then I want to look specifically at Arkansas and then just give you a few ideas of what the Arkansas General Assembly could do. So let's just jump right into it. So I'm going to kind of skip this.
I'm with the Georgia Center for Opportunity, and we're associated with the Alliance for an Opportunity. So the very first thing I just want to talk to you about is just so that people get the understanding that what we're talking about is disincentivizing the people from wanting to earn more money. And this, I think, is a pretty good illustration that kind of explains what we're talking about. So if if I would say to you, like, you know, would you be willing to work with me for the next two weekends?
It might be about 20 hours a weekend. I need your help. I'll pay you a thousand dollars. But then you realize that you're going to lose half of it, you know, five hundred dollars because you either have to pay taxes or perhaps you had some benefits that you would lose. Do I have a reduction in your benefit rates? The question is, would you still be willing to help me, even though I'm going to pay you $1,000? And if you only get to keep $500, that is a 50% earnings loss rate.
I mean, that's what we call it. How much are you losing in your earnings due to taxes or lost benefits? If you would actually lose more, let's say that you would only get to keep $250, then that would be a 75% earnings loss rate. And by the way, economists call it the effective marginal tax rate, which confuses everybody. So we actually are using the easier term to understand earning loss rates.
Or what would happen if you were only allowed to keep $100? Would you be willing to, you know, have me pay you a thousand dollars and knowing that you can only keep one hundred dollars? And if we just stop and reflect on that for a minute, you can see how that could be disincentivizing, you know, especially if the work you have to put in is substantial. So if you're going to put in a substantial amount of work, you're going to be wondering, is it worth my time? Right. Is it worth my time? And it changes from person to person.
Some people, for example, they might have a higher tolerance when it comes to losing earnings, and others might have a lower tolerance. So whether you would still work with me over these two weekends is going to change from person to person. Now, what would happen if you would actually lose more than the earnings? And this is what an example of a benefit cliff is. So when an earnings loss rate is up, is over 100%, I mean, an example would be, I pay you the $1,000, but you lose to taxes and loss benefits $1,500.
And so the impact to you is you're actually $500 worse off than what you were prior to agreeing to help me for earning $1,000. And this is what a benefit cliff is. So it's a disincentivizing thing that happens with safety net programs, and it's also part of the disincentivizing scheme, if you think it will. So when you have a high earnings loss rate, even before you get to the benefit cliff, a number of people will already be disincentivized.
So you're not going to necessarily find people running right up to that cliff. You're going to find a lot of people holding back sooner. So you might see, for example, individuals that say, I'm not going to, you know, work overtime. Or if they're only working part time, I'm not going to seek full time employment. Or they're offered a promotion, they might say, you know, okay, that comes with more responsibility, but I'm going to lose so much of my additional earnings or I don't want to risk running into a benefit cliff that they will decline.
So this is kind of explaining the overall phenomena of benefit cliffs. We developed a scale, a policy guide, more or less a scale that kind of describes the severity of earning loss rates. And so what I just want to point out basically is what you want from a policy standpoint, you definitely want to avoid the benefit cliffs 100% or more. I mean, that's obvious, but you also want to avoid the extreme earning loss rates.
what we describe as 75% or more. And you want to really, if at all possible, not have any in that high category. You don't want to be any over 50%. So that's kind of the goal. And we're going to see this when I actually give you some examples of how in Arkansas, we're up over 75% in some of the cases. There's another factor that is an important thing to understand, and that's that these earning loss rates are additive. So, for example, if you have more programs or taxes and
programs, you actually add it up and then you get some sort of total, which is the total impact. So, for example, if you lose 15% due to income and payroll taxes, and then you lose, let's say, 30% from benefits, and I just want to point out that that's the statutory benefit reduction rate for the SNAP program. It's 30%. That means that the amount lost, your earnings rate, is now
45%. And they add up. So, if we throw in another program or a couple more programs, you can very easily now be above 50%, above 75%. And what the chart is showing you on the right of this slide is that this is kind of like theoretically, let's say we have five programs, you know, five programs that each program smoothly tapers the benefits away to zero.
There's no problems with each program individually. There's no benefit cliffs. But because of this additive function, we call it like stacking effect because you're basically stacking one program on top of another program. And then ultimately what happens and what you could see graphically is that you could have a situation where you actually have, you know, not only a benefit cliff, but you actually have a large income range of disincentivizing returns. In other words, as they
continue to earn more money, they continue to lose even more. And we find this. We don't find this as much in Arkansas, but when we were looking at the data nationally, there certainly states that this is much more common. So when we want to talk about solutions, the one thing that we do at where I'm at, you know, Georgia Center for Opportunities, we want to make sure that they're meaningful. And there are a lot of organizations out there today that have proposed various solutions, but much of them, if I may humbly say, may not be as meaningful. So the very
first, like, just if I just come up with like four basic points, the one point is that the solution
Speaker 42
20:22
must be real and it must be scalable. So sometimes they might have a solution, but they're going to apply it to a small segment of the population. Maybe they will come up with an idea that, you know, we will take, you know, several hundred people on particular programs and we're going to increase their benefits so that they don't experience a benefit cliff. But you want to
make it scalable so it doesn't just impact a few people so it impacts everybody you know everybody that receives it should that it should be designed in such a way that that it's you know you don't you don't treat people by favor you want to treat everybody the same that the next point is uh some of these like for example just simply shifts the impact so so maybe we we make a change and it's helping a group of people in a certain income range. But what they really did is they didn't
really solve the underlying problem. And they're just shifting the problem to another population group or to
Speaker 40
21:27
another income group. So that's one thing that we want to avoid. And so to really solve it, you really have to kind of do the dirty work, if you will. You have to kind of look at what are the underlying causes and what are the critical factors and what do we need to do to actually fix it, as opposed to come up with a Band-Aid approach. And the last point is really
important to us. You want the solution to be fiscally responsible. If we say that, well, why don't we just spend more money and everybody that has experiences a benefit cliff or a high earnest loss rate, let's just spend more money and give them more money to help them bridge over. And some
Speaker 42
22:14
states have made this approach. That's not scalable. If we would actually take that idea and we would scale it, it would be costly. And Missouri is a state that's an example of this, where there was legislation introduced that they came up with a way to basically fund more to help people that encounter this.
But they have not implemented. It's been passed for several years now because the cost is is too high. So they try to scale it. In fact, the fiscal note said that to the members of their legislature in Missouri. It just in the beginning, they said we can't afford this, but they passed it anyway. So that's let's kind of jump
Speaker 40
22:58
and take a look at what does it look like in Arkansas? So I probably just need to explain the chart for a minute. So and this is one of the things where I might go too fast because I'm used to seeing this stuff all the time.
So this is a basic chart where it's it's it's actually believe it or not, it's a column chart. But the increments are tight together, and there's over 200 intervals that it looks like an area chart. But these are actually column charts. And so when you look at the gray, this is your net earnings. So what we take is what is somebody earning, and then we're going
Speaker 42
23:43
to subtract their payroll taxes.
So that's your Social Security, Medicare, payroll tax. And then we're going to subtract your state income tax and your federal income tax. And what you have left is the net income, is your
Speaker 40
23:59
net earnings. There is one difference, though, that we did for this. There are some safety net programs in the tax system. Like, for example, the refundable tax credit is a safety net program because it's refundable. And what it allows to happen is that it allows the family to actually receive a credit above what they actually paid.
And in some cases, they may
Speaker 42
24:25
not have paid anything. Almost half of the population or half of working adults in America pay no income
Speaker 40
24:35
tax to the federal system. They either have no tax liability at the end or they receive actually a credit, a refundable tax credit. And the two major
Speaker 42
24:46
ones are the earned income tax credit and there's also the additional child tax credit, which is the refundable portion of the child tax credit.
And then so then we just kind of add that. And this yellow is actually cash assistance. It's a very small percentage. This is actually just made up of TANF and LIHEAP. And then we have the food assistance. And the food assistance is made up of your SNAP. It's made up of your WIC nutritional program. And then there's also school lunches. That makes up the green. And then we have the medical assistance now split into two.
So this is the Medicaid and the CHIP. Now, this program, like if we just kind of stop, I mean, Medicaid and CHIP, I'm sorry. Medicaid and CHIP, and then we have the, these are, this would be the Arkansas Health Insurance Exchange. So this would be the health insurance exchanges and what they would receive with the premium tax credit. So this is what we call the basic
Speaker 40
25:57
program. So this is a basic benefits package.
it's almost exclusively entitlements, like you are entitled to get that refundable tax credit, you're entitled to get Medicaid, you're entitled to get SNAP. So these are programs that everybody, that if you fall within the income eligibility, you're going to get it. And if we just kind of put this together, what you see is there are actually eight
Speaker 42
26:24
benefit cliffs going up this range of income. So we're going like from earnings of zero up to 100,000. And I have them identified
Speaker 40
26:34
on the chart. So you could see it. There's actually a TANF cliff. There's a SNAP, Medicaid, WIC, LIHEAP, reduced price lunches, and chips. These are actual benefit cliffs over this range for, this would be in this case, it's a single mom with a little girl and a little boy. And so you can see the disincentivizing thing. The other thing that's not shown on this, and I'll give you a graph a little bit later, you see how flat this is right here before you get to the snap?
There's a range here from like $24,500 to $32,000 where you're in the extreme high earnings loss rate area. And this is disincentivizing. So if you're actually up here well before that snap cliff, there's really not much incentive for them to even pursue a higher paying job or
Speaker 42
27:28
trying to work more overtime to get more. So this is a real disincentivizing zone even before you get to the benefit cliff.
And that's what I mentioned earlier. So the next slide is what would happen if we add child care? And we don't consider, or subsidized child care, and we don't consider it part of the, it's not considered part of the basic benefits package because not everybody receives it. And this program is, there's not enough funding for the most part, and states have either priority lists or waiting lists. And so even if they might qualify eligibility, they're not necessarily going to get it.
But if they do get it, what you get is you get a tremendous cliff. It's the largest of all the benefit cliffs is with the child care. And you actually get another cliff as a surprise. It's a stacking
Speaker 40
28:27
effect cliff. There's no specific program that went away that caused that cliff. It is because of that other slide I showed you where there's a stacking effect. It's just because of all the earning loss rates and how they
Speaker 42
28:43
added up that you actually get another cliff.
And what we did was like, well, let's see, let me just say the one thing that we're doing. This is just kind of like a prep for another slide that's coming. So what we wanted to do was we wanted to take a range of this and figure out, you know, what percentage of this income range is? how much of it is these extremely high earning loss rates? How much of it is high?
Speaker 40
29:17
Can we just kind of like simplify this? So when I'm looking at this right here, how can I simplify that so we
Speaker 42
29:24
can kind of explain it? And so what we do is we don't do like, I mean, you could go like from zero to a million dollars and it's not going to be meaningful. So we needed an upper range. And what we did was we kind of picked one that we thought made sense is when does that family actually make a net contribution to income taxes? So what we do is we look at how much are they paying in income taxes and we subtract how much they're receiving in safety net benefits and that amount. So for this particular family here, for this single mom with these two kids, it's not until she earns
$85,000 until that occurs. Everything that she might earn below $85,000, she's still going to be receiving more in benefits than what she's paying in income taxes, and it's not going to be to this point. So just hold this thought in mind, and we'll see it again in two slides. So this is what it looks like when we add Section 8 housing, and there are no new benefit cliffs. This is not true for all states, I might point out. But in the case of Arkansas, for this example, it does not actually create a new cliff. But what it does do, and we'll see this the very next slide, it actually makes the earnings loss rates worse.
And so this is the last slide. So this explains, I just explained the $85,000, which is the
Speaker 40
30:54
upper limit. So we're now looking at how severe, if we go from $0 in earning
Speaker 42
31:01
up to $85,000, what percentage of that range has, for example, an extremely high earnings loss rate? You can see that's 28%. More than 25% of that range is actually now what we call an extremely high
earnings loss rate. And just as bad, I mean,
Speaker 40
31:23
not as bad, almost as bad, where we have nearly 26% is in the high range. And then worse, we have 5% are the benefit cliff. So when you add that all up, nearly 60% of that income range. If we go back here
Speaker 42
31:41
and we look at this income range from zero to 85%, 60% of that range is in the earnings loss rates where we don't really want it from
a public policy standpoint. You're having either high or extreme or a benefit cliff. so so that could be very disincentivizing clearly to to individuals um if we actually i think i'd put
Speaker 40
32:07
this in the test written testimony if we would actually say well let's not start at zero let's start it right
Speaker 42
32:14
around 18 000 because that's you know this lower range uh let's start at something that's a little bit more reasonable it it increases it to over 75 percent of that range is
now this problematic area. I want to mention one thing. Let me just, I'm going to jump back a couple of slides. This TANF cliff, as a researcher, I'm not that concerned about it because generally for you to be in this area, you're probably working part-time.
Speaker 40
32:47
And there's not, and if you look at the slopes around it, you know, they, you know, they're upsloping. So there's a great incentive
for them to easily overcome this benefit cliff. So, so I
Speaker 42
33:02
do not see the benefit cliffs due to TANF to be problematic. All the others, I see them as problematic. So each one of the other ones I see as problematic. And then obviously the childcare is problematic. And in Arkansas, the housing is problematic because it's the stacking effect and it just makes the earning
Speaker 40
33:29
loss rates worse. So that kind of summarizes what the situation is in Arkansas. And here's just a few ideas. And I understand that Les Ford, who I work with, is going to be testifying
Speaker 42
33:43
and she has actually more ideas on this. But the one idea is like, well, let me just say that as a state legislature, you have block grants such as child care, such as LIHEAP, that you have the opportunity
that you can make. You have a lot of flexibility in changing the makeup of those programs. But in addition, there's also a number of, you know, waivers, federal waivers, and I know that you're familiar with that. You just had a testimony about federal waivers that you can apply for that can change, that can change, you know, different programs and their demonstration projects. So for SNAP, there is a section 2026 demonstration project, and it specifically says in the federal
law that includes welfare reform. You could use that waiver, for example, to address benefit cliffs. In Medicaid, I'm going to give you two. There's like for Medicaid in Indiana, they have a health savings account and a bridge account, and that's an idea that the legislature might want to look at. But more broadly, there's actually a Section 1332 waiver with the Affordable Care Act
that gives states a lot of flexibility. The states can actually capture the premium tax credits from the federal government to use in health insurance reform. And so in the testimony I give, in the written testimony, I give some ideas of how you could do it. And my suggestion is that it's going to take a restructuring of health insurance. It's going to be based on what they call risk
equalization. The only really place we find that today in America is with the Medicare Advantage programs. They're private insurance. You have competition. It doesn't undermine innovation, and it addresses some of the more perplexing problems in health insurance industry. And then the last one I'll leave you with is the subsidized child care strategy.
We actually came up with three things we think states should do. One is a regulatory review to identify where they can reduce the cost. The problem with child care is it's just so expensive. And we saw that in the chart. It's such an expensive benefit that it's almost impossible to solve the benefit cliffs. So we think that there needs to be a regulatory review to address its costs. The other thing is that for whatever reason,
almost all states have been promoting center care, which is the most expensive setting. If the emphasis would change to actually promote home and relative care settings, which, by the way, is one of the goals of the TANF program, it would actually go a long way to addressing the benefit cliffs in the child care, and it becomes more reasonable to solve it. And the last piece is that the federal statute
actually asks states to use public-private partnerships, and very few states have done that. There's actually one in Michigan that they've done that has been successful. We have a paper on that, and in the back of the testimony, I actually provide some links to some studies that we have done that will explain this in greater detail. So this is just a quick hit of that, and so that kind of um ends my testimony and of course i'm open for questions or comments or anything that
Senator Jane English
Unverified
37:41
you would like um thank you very much this was very very informative appreciate it ladies do you all have something would you like to come to the table and do you have something to
Senator Jane English
Unverified
38:06
can come up to the table and you can be part of the conversation I think Les Ford has a
presentation she's going to make but I didn't want to leave you all out since you were honest we're glad to have you here okay Les we're ready for you
Speaker 57
38:28
it's very nice to speak to you today i am going to share my slides as well let me see if i can make sure i share the right thing real quick is everyone able to see that
yep all right i'm going to start with my goal today is to briefly discuss what benefit cliffs are the ones to watch out for and then i'm really going to try to zero in on options that are are available, because I know that that'll be important as we go through here. So first, what is a benefit slip? I think Eric covered it very well. It's when someone who's on benefit programs, when they receive a raise, promotion, or more hours, they experience an abrupt loss of
government benefits, or just a stalemate, an earnings loss ratio that's so high that they really don't see the incentive to work more or receive a raise. And this is important, especially in Arkansas, because of the percentage of the population that depends on Medicaid, that depends on SNAP, that depends on the benefits that Eric mentioned. Now, the numbers here are your pandemic high. So they are significantly smaller since the unwinding, since the SNAP ABOD waiver has
been expanded to more ages, but you still have a significant percentage of your population who depends on Medicaid, SNAP, and other benefits, and so will be disincentivized from pursuing work opportunities. And just to look a little bit about the math, Eric went into it in detail, but if you're not going to see net resources increase, whether you're making $11,000 a year or $65,000 a year, that's the example in D.C., or you see an abrupt benefit loss of something like
$25,000 in child care subsidies, if you receive a $1,000 raise in Illinois, that is a heavy disincentive from seeking work, seeking more hours, seeking raises. So I'm just going to briefly focus on two of the programs that I mentioned above, why it occurs. It's SNAP, Food Assistance, Supplemental Nutrition Assistance Program. It was designed to phase out gradually. That was the original design. So for every additional dollar in earned income you receive, you're supposed to
lose about 30 cents of that dollar of the SNAP benefit. However, because of increased deductions, because of the increased benefit on the front end, you phase out of the SNAP eligibility abruptly. And so it doesn't really matter if you extend eligibility, you're still going to have that income limit. And the same is roughly true in Medicaid, but it's not a benefit like SNAP
where, okay, if I'm a single mom with two kids, I roughly have $600 in monthly SNAP benefits. Medicaid is just an in-kind benefit where I get health insurance. And if I go past certain eligibility thresholds, certain income thresholds. I no longer have access to that benefit. And so that can be a more dramatic benefit loss to individuals, even if I'm going into the Affordable Care Act health coverage. And I've included some of those here. I do want to highlight that because
so many of our safety net programs, by my estimate, there's at least 114 different means tested programs for long-term individuals because they operate in silos it makes this this benefit cliff loss worse where if an individual is receiving food assistance and health care assistance and energy assistance and child care assistance in arkansas often those programs aren't talking to each other and so they go through their reporting their eligibility checks on different schedules
and they will, they, the individual, the family who's in need is not able to accurately predict when they're going to hit a benefit cliff. They don't know, oh, if I receive a thousand dollars here, I lose my childcare there. They are just afraid. And so that fear, the siloing can produce the lack of knowledge, the lack of ability to budget can produce a fear that also inhibits them from seeking raises. Now I'd like to,
Speaker 57
43:02
I know folks are coming behind me. So I'm going to focus on a couple paths forward that Arkansas can really focus on. The first is PATH-A, immediate reforms within the federal structure, within state authority that you can pursue program by program. The second PATH-B is a more comprehensive reform of trying to model what should our safety net look like. And you can do this for a small part of your population through RISE pilots. Many folks know that there are about
122 guaranteed income pilots across the country, and they're essentially testing out, can we just throw money on top of the current safety net? This is a different path. This says, what if we tried on a state level to replace the entire safety net with what we think it should look like? What if the benefits, what if you never hit a benefit cliff? What if you never hit an earning loss ratio of more than 50%? Could we model what that would look like as you return to work for a small part of our population?
So I would call that a rise pilot. But let's go into program by program, some options available for you. And I've shared this slide deck with the committee member, the subcommittee member. So I'm happy to discuss them more in detail because I'll be going through them quickly here. First, in the food assistance, main food assistance program, Supplemental Nutrition Assistance Program, SNAP, you can submit a demonstration waiver. You can try to move from a 30% reduction to a 24% per dollar earned reduction.
And if you're adjusting a benefit, USDA, U.S. Food and Nutrition Services, they can approve a waiver for up to 15% of your population. And so you could test this out on a small scale. It doesn't make a difference compared to our control group if we smooth the benefit clip for up to 15% of the population. You can also set a reasonable asset limit. Arkansas has set a reasonable asset limit for your elderly and disabled folks through your broad-based categorical eligibility option.
It's about, I believe it's $5,500. I would have to go back and check, but for the rest of your population, you have the standard federal asset limit. In child care, as Eric highlighted, child care is normally one of the largest benefit cliffs that working families experience when their subsidies go away. And it's because of how Eric highlighted, most states focus on daycare centers. They use survey work that focuses on the highest cost daycare centers.
And how they phase out the subsidy is not a gradual phase out. So first, state center set their child care subsidy. So you have a lot of authority to phase down the subsidy gradually. You have the authority to assess income continuously or as continuously as possible. Both of those will make a huge difference in how you phase the subsidy down. Second, because most states, including Arkansas, focus on a voucher that is given directly
to daycare centers instead of a benefit that is given to the family, most families, even if they would prefer a home-based or family-based child care provider, can't choose that option. You can move into a cash benefit distribution system where you program it and monitor it ensure that it only goes towards care and that allows you to choose a lower subsidy and phase it out more smoothly. Finally, in TANF, you can replace various disregards with one phase out
and here's most important, a lot of TANF dollars aren't actually given in straight cash assistance. a lot of the state's TANF block grant, including Arkansas, is used to, is given to providers who are intended to provide case management or intended to provide employment and training. You can pay for outcomes. You can say, all right, here's the base TANF block grant, but you only get some percentage of what we intended to give you, this grant that we intended to give you, if you achieve the employment and earnings outcomes that we have set as a legislature
in order to help people jump the cliff. Because again, the point here is not continued assistance. It is work, it is employment, it is flourishing and independence. There are some targeted Medicaid fixes that I'd also like to talk through here. And you can pursue these through an 1115 waiver, which is the Medicaid one, or the 1332 waiver, which is the Affordable Care Act Marketplace waiver, or you can combine them. First, you can expand employer-sponsored premium assistance.
The ideal is that someone receives health insurance in the private market, and the private market right now is employer-sponsored insurance. So you have the ability, if someone is working at Walmart in Arkansas, to go to Walmart and say, hey, we can use our Medicaid funds to pay the employee portion of their health insurance cost. That is dramatically lower to the state. In some cases, we've seen it's 60% lower in costs than you are currently paying in Medicaid.
So that's first. Second, you can create things like HSA savings accounts while they're on the Medicaid program so that when they bridge to the ACA, they have a savings account that enables them to meet their deductible that they will experience once they go to the ACA. Finally, it's really important to address marriage penalties here as well. When we assess marriage penalties, this is a type of benefit cliff. If we treat households where two unmarried partners are treated as separate households, even though they share the same residence, but we treat married couples as one household when they share the same residence, we are creating marriage penalties that don't need to exist.
if two unmarried partners share residence we should assess them as though they were they are married except in very limited circumstances where that's not the case okay i'd like to briefly chat through plan b which is where you really focus on leading this nation in how we should reform the 114 different siloed programs and you start small here this is uh we have to prove a concept before we roll it up on a federal, a state or national level. So you can start with a thousand
households. You can start with a three-year pilot. You can use TANF dollars to fund it. You can measure it against randomized control trial standards. So we're measuring this control group, treatment group. And essentially, you can try to roll seven programs into a single benefit. I have the programs listed here. And you can ensure that you phase down that benefit so that benefit loss plus taxed space is no more than a 50% earnings loss ratio.
And the goal is what should a safety net that focuses on opportunity, that focuses on work, that focuses on independence, what would that look like? It's not what we have. No one would have built this. Finally, I'd like to end by saying Arkansas has an incredible foundation. The 100 Families Initiative, Restore Hope, the 1033 Initiative, it really focuses on the building blocks of what we know independence. It's work, it's family, it's community.
Those are incredibly important to healing what led a family into crisis. And that is so important to immediately address. So just some next steps here. You can start with modeling Arkansas-specific benefit cliff data using Arkansas data, county by county. You can authorize a small-scale RISE pilot in order to say, here's what we think the safe net should look like. And you can direct your Department of Human Services to apply for Medicaid and SNAP waivers to address both marriage penalties and benefit cliffs.
Speaker 59
51:42
Thanks so much for listening to me today. I will stop sharing now. Please let me know if you have
Senator Jane English
Unverified
51:51
any questions. Thank you so very much. That's very, very informative. So let me just go to our two ladies here. Would you like to introduce yourselves, and do you have some comments you'd
Heather Webb
Unverified
52:02
like to make? Sure, absolutely. Thank you guys for having us today. So my name is Heather Webb. I am a partner with Restore Hope 100 Families, and I work for Arkansas Family Alliance.
So I have worked with families in poverty or facing the Alice derivative of our population for the last eight years. So I absolutely love what Les said, and I agree with everything that she did mention. She would be much more formally trained and have all of the research, so I appreciate that greatly. But I can share a lot as far as what families that are actually facing here in Arkansas that we get to see on a daily basis.
But I also want to let her introduce herself because I have a feeling we're going to talk about the same things. And
Speaker 75
52:51
I know it's late in the day, so we'll do a little bit of both. Similar, yes. Hi, everyone. Thanks for having me here today. I'm Molly Palmer. I am a part of the Heart of Arkansas United Way. And similarly, I think have just a couple of additional data points. I really appreciate it. I feel like I've learned a lot here today already, but have a couple of additional things to share with you all about sort of not only the family,
experience but also the employer experience and the experience of the non-profit community that steps up to serve where those benefits cliffs leave families in crisis so I'll let you absolutely so I kind of just
Heather Webb
Unverified
53:26
wanted to talk about the reality of the situation so I wanted to share about a family that I actually was talking to today I did have a powerpoint but I'm just going to kind of go around it actually because they hit on a lot of the pinpoints so we'll just go around it. But you guys should have a copy of it if you want to. So I have a mom that
was four years ago, she was homeless. And she was on disability. She did have a drug addiction. But today, she is stably housed in her own home. And she is now making $50,000 a year, which sounds wonderful. But two years ago, she was making $36,000 a year. She was still able to access her Medicaid benefits, whereas today she cannot. I just talked to her this morning. She
also just lost her $300 a month subsidy towards her mortgage. So today she's working 45, 50 hours a week, stressed to the max, and does not know how she's going to make up this $300 that she just lost that is the truth about the benefits clipped um and so i thought i would just bring it back to a real story of a lady that i talked to today since we have touched so much on the statistics behind it um you know poverty is like fifteen thousand dollars for a single person um can you
imagine trying to live on fifteen thousand dollars i don't think any of us could manage that so when you're talking about a family of three or four what do you think a reasonable amount of income would be well standard medium income is just over 71 000 but to be above the federal poverty line it's just over 27 000 so that's why this benefits cleft is so important to us that
work with these families because we see it and we feel it on a daily basis so i noticed your notes So I won't go over too much more of yours because I
Speaker 77
55:31
had a lot of that. So I'm going to let her go now. Sure. So I would say if you know me at all, you know I'd be remiss if I did not
Speaker 75
55:40
mention the ALICE data. And Heather spoke to that just a little bit. So a lot of you are familiar with that. But our ALICE population here in Arkansas is, first, asset limited. So when there's a crisis, there's nothing to fall back on. And there's nothing to help these folks to build wealth and to move forward.
they are income constrained which means based on a bare bones basic cost of living they're not able to meet that budget at the end of the month i heard someone say recently they have more month than money and i think importantly this population is employed and often we find that our alice population is working two or three jobs to make ends meet so heather referred to this a little bit that they for a family of four in arkansas on average and and we calculate that alice data down to the county level. So we can get very specific or look really at any of your districts if you're
interested in that as well. But on average for a family of four in 2024, the cost of living was $71,000. The federal poverty line for a family of four was $31,000. So that means the cost of living in Arkansas is 227% of the federal poverty line. So we're talking about even these benefits where that create these cliffs, the eligibility is in the neighborhood of 130% of the federal poverty line or 185% of the federal poverty line.
So there is a gap that already exists of people who are ineligible for these benefits and still not able to make ends meet. So if we exacerbate that by not making some of the changes, I think, that have been suggested here today, it creates a further problem for our economy. We have the privilege of running a program called Alice at Work, which helps work directly with employers to consider what can they do for their employees. And I'll tell you that that's part of a national movement. And on the
national level, we are talking about how do you bring in coaches into employers to help them understand work with their employees to understand um what is a raise going to mean for you and your family um so we bring that individual level coaching but um i think it's important to say that here in arkansas the participants who have been a part the companies and businesses who've been a part of this program alice at work have said our number one problem is recruitment and retention. So we've talked a lot about the incentive of an individual to work. But when
those individuals are disincentivized, it affects the business community as well. It affects what businesses can produce and what they can accomplish. And so there's a real economic impact to things like this. Just yesterday, I was visiting with a local partner who is an administrator for some federal grant funding community services block grant funding LIHEAP funding etc and one of the things that we were talking about was her pursuit of private dollars to meet the needs of families who are just in exactly this situation that that families walk
into their office and they face an immediate cliff which is we can't help you today and we can't help you today because you don't qualify for this program because you may earn a thousand dollars too much a year in order to be able to do that and so there is there is we're seeing an increased reliance on private philanthropy in order to meet these needs but in a time when I think we are all feeling like gas costs more money we have less disposable income to give and so the non-profit
community always I'm proud to be a part of this community always stands ready to do as much as possible to help, but it is also true that there's a difference between what a benefit can provide and what private dollars can provide. My friends in the hunger relief world would want me to say for every one meal that the charitable food network provides, SNAP provides nine. So when we lose that SNAP benefit, it's not just losing one lunch or one dinner for a family. It's
multiples exponential numbers of meals that are being lost when they lose that so I appreciate the opportunity to be here with you guys today and welcome any questions okay thank you very much
Senator Jane English
Unverified
59:57
so do we have some thoughts some questions representative Bentley thank you chairman uh Les thank you
Representative Mary Bentley
Unverified
1:00:05
for being here today so with Indiana's model can you kind of give a little more details for us on that because really that's the first time I've heard about that the bridge So, can you kind of tell us a little bit more what that would look like for a bridge for that individual to do in a health savings account?
Speaker 57
1:00:24
Yeah, I think Eric brought this up, but Indiana has something called the Healthy Indiana Plan, and they have a 1.0 and a 2.0 version. And essentially what they did is they set up a health savings account for individuals while they're on the Medicaid program so that when they move over the benefit cliff for a single individual, they would lose Medicaid about 138% of the federal poverty level. And it depends for their children, which they receive health insurance through the CHIP program.
Every state has a different eligibility threshold for that. But it allows the parent or the single individual while they're on Medicaid to receive additional funds in a health savings account. And then the health savings account can be used to pay their deductible costs once they move into the Affordable Care Act. And so if you combine a health savings account with something like premium assistance, and that's not widely used, but most states, I think 30-something states, have some version of premium assistance.
But the issue is it's not widely used. So if you partner with someone like Walmart in Arkansas, and many individuals are employed at Walmart who are also on Medicaid, instead of paying the total cost of their health insurance while they're on Medicaid, you would say, no, you can go on employer-sponsored insurance so that when you receive raises at Walmart, when you work more hours there, you don't lose your health insurance. And also, it's cheaper to the state. You're just covering the employee portion of what they would have to cover.
Like, we all have some employee portion of health insurance. And so those are two options, health savings account and using Medicaid for premium assistance. But I'll let Eric jump in on the Indiana HIP. I actually have a graphic I can share with you, if that
Speaker 50
1:02:11
would be okay. I can just share my screen. Yeah. That might help. That'd be great. This is actually in –
Speaker 42
1:02:27
this is actually in a report that came out, I think, last year, and it's one of the references in the back of my testimony.
So this explains the Indiana program. So you have basically the Medicaid enrollee, and then you have the state program. And what they actually do is they split it between health savings account managers and insurers. So they get like a normal commercial insurance deductible health plan. And in addition, they get the health savings account. And then that's how they kind of have their Medicaid program set up. It's the only one in the country that was approved this way. And then what they do is they, upon exit, they allow them to keep a portion of the health savings account that they had saved while they were on Medicaid that they can use to help with out-of-pocket.
you know, cost with their medical insurance after they leave. So I thought that this, you know, graphic might be helpful for understanding it. Okay. Can
Representative Mary Bentley
Unverified
1:03:29
you give us, so talk about the marriage penalties a little bit more. Like we're talking about, so what specifically do we have in Arkansas for marriage penalties that you
Speaker 42
1:03:46
we fix that? So we do have, like with the child care program, Arkansas is one of the 39 states that never counts a partner in a household of a parent, never counts that income.
So if you're a married couple, you count both the incomes to, you know, to qualify for the child care. But if they happen to be unmarried and there's someone identified as the parent and then there's a partner living with the parent, Arkansas never counts it. There are actually, I believe, six states, five states that actually always count the partner. And that creates the disparity between the two.
So the one thing that I would definitely look at is how do you define, and actually I wrote a paper on this with the Institute of Family Studies last year, but one of the things you could do is as you administer these programs, look at how you define the household and who's in the household, and ask the question, are you treating unmarried couples differently? And just go program by program. In some cases, you won't be able to change it because of federal statute. But in the case of the child care program, that's a block grant. And you have and you have the ability to change that. There are also other more complicated things that could be done with marriage penalties. And actually, Les and I are involved in writing something up on that. That's not yet ready.
Speaker 37
1:05:32
love to. I think the thing with the TANF, in my memory, when
Senator Jane English
Unverified
1:05:38
we implemented TANF, the idea was to have marriage and people living together and all that. So sometimes some of these things just kind of go against whatever it was that we thought we were designing, and
the same kinds of things are not happening.
Senator Jim Petty
Unverified
1:06:03
Penny. Thank you, Madam Chair. And thank you, ladies and Eric, for the testimony today. It's a very real issue. So if we're talking about making some of these major changes that have been recommended, some of my colleagues are going to want to see more proof in the numbers. And so my question is around, you know, the benefits cliffs are very real.
Cuts coming from the federal programs are very real. And so can you share some data, and this may be more for Eric or Les, but can you share some data on savings with some of these on the backside? Because right now we talked about today the benefits cliff, And we didn't hear anything about, you know, the actual overall cost. The benefits are not being taken away if we make some of these recommended changes for those that are trying to work their way up.
But how do we ultimately save money at the federal level or more specifically in Arkansas at the state level if we make some of these changes? Yeah, I'm
Speaker 57
1:07:18
happy to jump in here with the general thesis, which is program by program, one of the goals is that you don't want benefits to be so generous that you're not able to phase them out continuously before income limits. So one of the issues, I can use SNAP as an example. SNAP was intended to phase out before the net income limit.
What we did was we added so many deductions that we didn't start phasing it out soon enough. And we also, in the middle of COVID, we increased how many benefits you were getting. So it was also still a sharp cliff. So the goal is never to increase safety net benefits in order to solve this problem. The goal is to carefully assess each program and how they stack on one another so that with each additional earned dollar, the individual is better off.
So we're not advocating for a more generous safety net. We actually have a very
Speaker 60
1:08:21
generous safety net. It's just very poorly designed. And so the goal is
Speaker 42
1:08:31
can, I'm sorry. I can add to that if I could. So we've actually done some modeling. It's actually very difficult modeling. I used to be on the appropriations committee, did fiscal notes all the time. But this is one of those very difficult kind of calculations.
But as a general rule, when you submit waivers for the federal government, you have to prove cost neutrality. So everything that we're doing is going through that process of not causing additional costs. And the one thing that is very hard to model is that we're kind of trying to hit the behavior. Because you want to encourage the behavior of people to move up economically, you know, mobility.
And when that happens, you're going to reduce costs. You don't, you know, right now what's kind of happening is you have the overall disincentive. And so people settle in some point where they are somewhat satisfied of where they are. And and so they are no longer striving to earn more money. And that's that's the really bad part of these disincentives is that you're you're changing, you know, their expectations, their hopes.
That's that's kind of what you're hitting at these different people. They they can come to a point and realize, like, why should I try harder? Right. Because because of the situation they're going. But if you actually kind of change the system in a way that that no longer is happening, it's going to change some of the underlying assumptions that you use in economic models. And that's a very difficult thing to model because it's very dynamic. And so what we've been kind of cautious in what we're doing and what we represent, so we don't want to introduce something that's going to cost any more money.
And Lessen very much knows that, you know, the work that she's doing, everything that we look at, it's like, you know, let's not cause, so even with what we, you know, even those kind of step-by-step kind of things we're doing, each one of those steps is done in a way that we're not going to cause that. But I think in the long run, the dynamic side of the modeling is going to, you know, we're going to see some major changes. If I could just make one comment to Senator English is she said that about the TANF program and then it seems like that some of these things are counteracting the TANF program.
Speaker 96
1:11:09
My response is absolutely. That's absolutely true. Got another
Senator Jim Petty
Unverified
1:11:19
question? Just a follow-up. So what we're talking about more or less assumes that the federal funding and the current funding levels are static and not being decreased. And that's what concerns me and I think concerns some of my colleagues is that that may not be the case. And so what I'm looking for is, you know, in some of those graphs that you had, you had somebody that was working their way up.
And at some point, they exit that picture completely. And that's where we ultimately want to get everybody. And that's what I'm looking for in terms of how do we move more people out of that graph faster and what does that look like? Because at the end of the day, you know, what's to keep them from moving from that, you know, struggle down here and no incentive to, oh, life's comfortable right here exactly where I'm at, and they never move on beyond that.
Speaker 42
1:12:23
That's a very real concern. I agree with exactly what you're saying. I think when you address it program by program, so like if Arkansas does look, for example, at private-public partnerships, and it's in Michigan where they did a really good experiment on that, and they're continuing to do the program now as well, if you could solve that one problem, it's like, let's solve the child care problem, and then we can set that aside, right?
And then we had some fairly good ideas of what to do with the with the food stamp program, for example. Well, let's solve that one. And then we can set it aside. And then if we can actually go into that, like the Medicaid problem is really a problem of once you come off of Medicaid, you're going to have out of pocket costs. And people are just afraid of losing that, you know, just knowing that if you're on Medicaid, your costs are covered.
And now if you transition off Medicaid and you either have employer insurance and the percentage that you have to pay or even if you go onto the market, there's out-of-pocket expenses. So if you address that, you know, we can move that off of it. And if you kind of approach it that way, I think that we can get there. I think, you know, let's deal with child care. Let's solve that one. Let's deal with the medical assistance. We can solve that one. And then if we remove those two, I think it's a much easier task that's set before us.
Representative Rick Beck
Unverified
1:14:10
Representative Beck. Thank you. I thought there was someone in front of me. He caught me off guard. My question is this, and you guys have got my head swimming with numbers trying to figure this thing out. I hear, and this is not critical of anybody, but I hear we've got to go at this program by program. I like that concept, you're breaking the problem down and go.
But then also you showed us some data that says, you know, it's really the stackable part of this thing that creates the cliffs, which would say, okay, forget program by program. We've got to look at the stackable and how this is affecting. It's almost like you have to look at it from an individual's, you know, this person's situation would make them more susceptible to stacking problems with cliff
problems related to stacking. So with all that said, it looks like if you're, I was trying to say, okay, let's break it down. What are we looking for program by program? And now you guys can are we looking at increasing the efficiencies that might I think I heard something to that so that the program's more efficient there's their savings related for that uh are and I'm just going
to say this are we looking for uh fraud within those programs that you know individuals that
are maybe uh either shouldn't be in that program or are you so that's the program by program look The other one, which I really liked, was
the idea of going with the employers and helping pay the individual's portion of the Medicaid, helping to save on Medicaid. I thought that was a good point.
So that's what I'm looking at there. Would that be sort of correct, or am I way
Speaker 39
1:16:22
out of it? Yeah, I know Les is going to have comments on this, too.
Speaker 42
1:16:28
I think what you're struggling with is legit, I mean, because it's so complex, the system. I mean, there's actually over 80 programs, over 80 programs. And then when we've modeled it, we modeled the major programs. So we modeled about 15 programs, which is the ones that are most prevalent and then used.
And we actually co-authored a part on fixing benefit cliffs. And part of that is, you know, get Congress to consolidate programs. Yeah, I mean, was it eight or nine food-related programs? Why do we have eight or nine? You know, why don't we have one, right? And so one of the great things that could happen is just simply consolidating the programs to make it less complex. The more programs, and each program has their own rules and what they test and things.
And so I think there's a lot that starts somewhere, right? We have to, there's somewhere we have to start. And I think you have to start program to program. And then if you can consolidate, we push for the consolidation. You let that happen and coordinate. And the One Door program that Arkansas is pursuing, I think, is a great administrative structure to help in this effort. And I think there was another comment that you
Speaker 96
1:17:51
said in there that I wanted to say something, and it's kind of slipping my mind.
There was one other thing I was going to say to your point. Oh,
Representative Rick Beck
Unverified
1:18:09
I forget what it is. I ramble a bit. But is it related to, you know, the stacking type issues and the cliffs are related strictly
Speaker 57
1:18:18
to stacking? I can jump in there because the stacking normally occurs, and I think this is a good focus point. The stacking normally occurs for young families.
So single mom, two kids, young families, that's when they have to rely on multiple benefits. So they need health insurance for their kids or Medicaid. They need extra help getting food on the table. They're on staff. They're trying to go to work, so they're getting child care. Oops, the heating went out in their house, so they're on something called black heat. When we see those multiple benefits, and I'm not even including half the list that Eric looks at, it's really for young families who are the most vulnerable. It's, you know, those are the ones who we want to focus on.
So I think by saying stacking, we're focusing on the most vulnerable households. But again, back to Eric's point, we can only, under state authority, we don't have, most of these programs are federally authorized. We can do tweaks program by program that decrease that stacking effect. But we got to go, we have to go in some sort of order here. So we go with, I think it is program by program. And by doing that, we're helping the
Speaker 42
1:19:28
most vulnerable. I remember now, because you had mentioned about fraud.
So there's, you know, fraud, waste and abuse type of things. And that's also a concern. But I think today what we're talking about, this is the this this problem that we presented is because of the eligibility rules that are in place, assuming everybody follows the rules. So so, you know, we yes, you have to address, you know, the the fraud, waste and abuse that are in systems and you need the program integrity side of it as well. But what we were addressing today is simply this is a problem with the rules themselves.
They're uncoordinated. You know, part of the pilots is to kind of get some coordination among the rules so that they fit together and make sense as opposed to the situation we have now. Another question? Yeah, go ahead. So
Representative Rick Beck
Unverified
1:20:23
maybe this is not a question, but it's a statement. i'm looking at some of your charts and i'm trying to i'm trying to do that math thing right i'm like how do you get from here to here as you move up a chart you know it looks like there's got to be
dollars reduced and you know of course the the efficiency aspect of that and and uh maybe using local employers helping that with it i can see where all that's that's dollars that could probably help flatten this thing out a little bit but just seems to me like it's almost uh it just could address how do you i mean if
you look just you just take a category and you go up and you say okay this group's gonna lose as i as i
go up in employment and that's that's just the way it works
it's like so i i don't know how you mathematically write
that other than pulling something out of the system yeah uh the one if
Speaker 42
1:21:26
i can share my slide again because maybe it might be helpful to answer that question if i may um so can you see it yet so this is the one this is the one graph that we talked about and i don't know if i have a ability to draw a line but but if if you actually can saw
like, like if we could, this doesn't have the childcare. If we, if we solve that problem with a private public partnership and it's off the table, and then we do some reform with the medical assistance and, and I have like a more permanent solution and also the Indiana model, this is now off the table. And then what we're looking at is we're looking at just the green down here. And if you just focus on that, I think you could see that it is probably possible that we could slope this in a way that you get rid of it because if you handle these kind of drop-offs in here you
could just do that so i think it's it makes it more manageable i mean when we when we look at this is i mean this is like there's no way right you you look at this graph and you're thinking this is a basic program plus child care there's no way of fixing this and and in a sense it's true but then if you start breaking it out and we we solve the child care we solve the medical systems and we're only dealing with the green, yellow, and blue here, I think that we'll find that there could be a solution. That's kind of what we're headed toward.
Representative Rick Beck
Unverified
1:22:54
I don't know if that helps or not. Go ahead. Yes, and this is just a request. Looking at the data, as you were speaking, actually, I agree with exactly what you said, but is there any data out there that says that, in terms of cliffs, which categories are creating most of the major cliffs in terms of a percentage of cliffs that an individual might see?
Because that might help also to tell us to take a look at this area to see if we can do some work in that area. It might focus us in, is a better word, to where we
Speaker 39
1:23:39
need to be focused into. Yes, there is. And I would just say, I would say that it's the child care, the medical
Speaker 42
1:23:47
assistance, and the food. And those are the three that we should be concentrating on. And Les might have a little different take on it.
Representative Rick Beck
Unverified
1:23:58
No, same here. So, do you have data that's related to Arkansas or is it
Speaker 102
1:24:09
more generic? We have both. And you would share that? You will
Speaker 42
1:24:15
share that with us? Yeah. So actually, maybe we could do this a little bit offline because what our modeling does is it's fairly complex. And we can basically you tell me the family structure, you know, how many kids, their ages, et cetera, and we can run the numbers.
So it's like we could just run various kind of scenarios and look at the numbers and exactly what it is. That's how the data will be. It's a computer program, right? It's a it's computer modeling where where we basically are replicating what happens if you go into one of the county offices and you apply for benefits and then the various benefits you would get, for example, from the federal government. And so we can replicate that and we can show you over a range of income what it is. So so based on that, we can actually do that.
We actually did a really large report for the state of North Carolina that kind of really broke things out. So maybe we could have a conversation about exactly what is the scope of the work and how much you want to see and that sort of thing, and we could definitely generate the data. Thank you very
Senator Jane English
Unverified
1:25:23
much. So that may be something that we need to do is come up with that kind of a report. I guess one of the things that Senator Petty was talking about, we're all trying to think about how we move people forward.
And one of the things that I just found out or realized last month was we're working really hard at the state level trying to make sure our kids have a future when they graduate from high school so that they're employed, enlisted, or enrolled someplace. Well, one of the things that I realized is that that young person who gets a job, and maybe that job pays him $40,000 a year because he's a welder or whatever, that changes their whole family income structure.
And I thought, what are we trying to do? We put people in a box, and we don't give them a way to get out. But that's exactly what we want is those young people to be able to go off and have a future. And yet what we're doing is we're penalizing them for their efforts or the family for the efforts, unless the kid moves off and isn't part of the family anymore. But, you know, there's so many of these things that I think have been built in by Congress as they wrote the rules that just aren't realistic.
And they don't make it easy for a program to operate. We just spend a lot of money. Ladies, I thank you. Do we have any fruit? Oh,
Representative Cindy Crawford
Unverified
1:26:57
do we have one more? I'm sorry. Representative. Thank you. My question comes in with the public-private partnership. And you mentioned, if I heard it right, that if you have someone working at Walmart, that they would come in and pay part of their medicaid like a
is that what you said is that they would come in and pay a federal government program they would
Speaker 57
1:27:29
pay that part rather than the person no so it's actually kind of opposite so say i work at walmart and walmart generally offers employer-sponsored insurance to its employees but those beneath 138% of the federal poverty level or whatever the cutoff threshold is for CHIP. They are generally on Medicaid. They generally don't take employer-sponsored insurance. However, Arkansas
can create an option. So say there's an employer-sponsored insurance available via Walmart, there's usually an employee portion. It's a couple hundred dollars a month. And instead of Arkansas spending federal and state dollars on the Medicaid program, they would instead pay the employee portion of the ESI, the employer-sponsored insurance, so that as that individual takes on
more hours, gains wages, raises, hourly raises, they stay on Walmart's employer-sponsored insurance and slowly the Arkansas subsidy disappears, but they keep their insurance the entire time. Okay, so it doesn't
Representative Cindy Crawford
Unverified
1:28:45
come out of the Walmart's pocket? No.
Speaker 57
1:28:50
I mean, Walmart will be paying their employer side of the insurance,
which they pay for every Walmart employee.
Senator Jane English
Unverified
1:29:03
we appreciate you being here. We enjoyed your comments, and they are very relevant. And Les and Rob, we appreciate both of you being here and giving our presentation. It's been very good. And thank you very much, and have a wonderful weekend. Thank you. We are adjourned.
Agenda
A. Call to Order
B. Presentation on Consolidation of Local Workforce Development Boards into One State Workforce Development Board [Exhibit B]
C. Overview of Benefit Cliffs and Their Implications
D. Discussion of Recommendations by Subcommittee
E. Other Business
F. Adjournment
Documents
No documents posted.
Speakers
Senator Jane English
Unverified
Speaker 5
Speaker 8
Representative Mary Bentley
Unverified
Speaker 15
Speaker 18
Representative Denise Jones Ennett
Unverified
Speaker 40
Speaker 42
Speaker 28
Speaker 56
Speaker 57
Speaker 63
Speaker 59
Heather Webb
Unverified
Speaker 75
Speaker 77
Speaker 50
Speaker 39
Speaker 83
Speaker 86
Speaker 87
Speaker 37
Speaker 88
Senator Jim Petty
Unverified
Speaker 60
Speaker 96
Representative Rick Beck
Unverified
Speaker 102
Representative Cindy Crawford
Unverified