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A digital credentials system could make life easier for people enrolled in benefits programs like SNAP, formerly known as food stamps.
The gap between the number of eligible Americans and those who actually receive public assistance benefits often comes down to the administrative burdens posed by state and federal bureaucracies. Individuals and families must navigate numerous hurdles to find out about programs like the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF) to determine their eligibility—and yet the psychological costs and fear of stigma associated with participating in these benefits programs can deter some applicants from even applying for benefits. The bureaucratic compliance costs—the time and effort associated with filling out forms, procuring documentation, visiting a government office, and potentially repeating these steps to secure continuing benefits—are also substantial.
A digital credentials system could make life easier for people enrolled in these programs and potentially allow hard-to-reach groups to access these benefits, if federal and state policymakers can muster the will to meet technological and political challenges. In a new study published this spring, Peter Muennig, a professor in Columbia University’s department of health policy and management, suggests that digital credentials would facilitate Americans’ ability to obtain everything from food stamps and driver’s licenses to permits and licenses to start a small business. A key benefit, Muennig told the Prospect, would be eliminating some of the administrative hurdles that prevent eligible people from receiving social welfare benefits like SNAP and TANF.
Some targeted social welfare programs like SNAP and the Program for Women, Infants, and Children (WIC) have higher rates of participation among eligible people. As of 2018, nearly 40 million Americans—more than 60 percent of eligible people—received SNAP benefits. For cash assistance through TANF, however, only one million families received benefits in 2022 (down from 5.1 million families at its 1994 peak in a prior assistance program), according to Congressional Research Service reports.
Following the passage of the Affordable Care Act, some states implemented Medicaid real-time eligibility, meaning people could receive near-instant responses to their applications.
Digital credentials could help eliminate some of these barriers, especially for hard-to-reach populations, including those in deep poverty, people experiencing homelessness, and the rural poor. Program eligibility would rely on the basic information associated with a person’s digital credential, such as income, assets, and family size, and send the relevant information to government agencies, which would be a tremendous time-saver for applicants. A working single mother, for example, could avoid having to make child care arrangements to visit an agency in person. Instead, to determine eligibility and levels of benefits, she could consent to send her data electronically to the relevant office.
Digital benefits enrollment is making some headway. Following the passage of the Affordable Care Act, some states implemented Medicaid real-time eligibility, meaning people could receive near-instant responses to their applications. Washington state processed 92 percent of applications for Apple Health, the state’s Medicaid program, in less than 24 hours. People logged in to a portal to verify their identity and answer questions about their income, family size, and health conditions. The system then checked this information with different federal agencies to determine eligibility. People who applied reported that the application took between 10 and 45 minutes for complex cases.
Eliminating other administrative burdens, however, requires political will as well as technological solutions. Even when the state agencies that administer SNAP moved interviews online in the early days of the COVID-19 pandemic, the number of eligible people receiving benefits did not increase, according to Carolyn Barnes, a professor at Duke University’s Sanford School of Public Policy. The reason? A lack of funding to hire adequate numbers of people to process applications for assistance meant people waited for months just to find out if they were eligible for assistance—even with additional federal funding to meet the increased demand for services.
These problems are especially prevalent in Southeastern states, which have historically placed the most burdensome requirements on applicants and provided the least generous cash assistance, Barnes said. In these states, Barnes is doubtful that access to benefits for eligible people would meaningfully increase without greater funding to hire people to process applications. Even with automation, caseworkers will still be needed to review applications and communicate with recipients in more complex cases.
Some of the most onerous burdens for applicants, of course, stem from the eligibility requirements themselves. Federal guidelines for TANF are vague and open to state interpretation, meaning Republican states like Louisiana, Texas, and Kentucky can impose more onerous work requirements and time limits on receiving benefits for all recipients, and have disparate impacts on African American and Latino applicants who face employment discrimination and other structural barriers.
The implementation of this system would require an initial funding boost in the short term—and that prospect alone may generate resistance, especially where state and county welfare employees still use decades-old computers and software systems that are incompatible with state-of-the-art digital credentialing systems, according to Jennifer Wagner, director of Medicaid eligibility and enrollment at the Center on Budget and Policy Priorities.
Muennig indicates that these credentials could rely on existing international security and privacy standards to protect recipients’ personal information. People would need to consent for any federal agency to see their data, and agencies would only have access to the information relevant to the person’s application for benefits. Implementing these protections would also require significant funding. Digital credentials systems can also perpetuate algorithmic bias, a phenomenon in which supposedly neutral algorithms perpetuate systemic discrimination in areas like mortgage lending and criminal sentencing. Muennig pushes back on these critiques, responding that benefits eligibility is a straightforward matter of a recipient meeting certain agency-established income thresholds.
For benefits like Medicaid, applicants are either eligible for the benefit based on income (and potentially other factors, depending on the state) or they are not. Other programs, like SNAP, distribute benefits at different levels depending on income and assets, potentially requiring meetings with people.
Recent Fiscal Responsibility Act developments could complicate the funding paradigm for digital credentials. Congress imposed new SNAP work requirements for able-bodied, childless adults between the ages of 50 and 54. Victoria Negus, a policy advocate at the Massachusetts Law Reform Institute, told the Prospect that the new work requirements will likely result in fewer people receiving benefits, as people fall off the rolls due to not knowing about the work requirements or not being able to fulfill them. In such a climate, making the case for a massive technological overhaul of the welfare system to extend benefits to more people may prove difficult, if not impossible.
Proposals for transformations of the American welfare state in tandem with appropriate privacy safeguards offer an important opportunity to consider how the government can improve the distribution of benefits to improve the lives of poor and working-class Americans. Innovations in the world of benefits distribution do influence executive branch decision-making. In 2021, President Biden issued an executive order aimed at reducing the administrative burdens related to receiving SNAP, WIC, and Medicare, among other benefits. The order called for “the Federal Government’s management of its customer experience,” in areas from nutrition programs to veterans services, to be driven by “behavioral science and user testing, especially for digital services.”
