ACA Medicaid Expansion Having Unintended Consequences for Food Stamps

July 20, 2015

This week we look at participation in the Supplemental Nutrition Assistance Program (food stamps) and discuss its value as a “high frequency” indicator of poverty levels.

Food Stamp Participation is Losing Value as Poverty Indicator

The number of individuals receiving Supplemental Nutrition Assistance Program (“SNAP” or “food stamps”) benefits has long been a good proxy for poverty rates; the USDA reports that in 2013, 83% of SNAP households lived in poverty.

The SNAP data’s value as a proxy stems from its frequency and its long term correlation to poverty rates.  The SNAP data is released monthly several months in arrears; last week the April 2015 data was added to the DIVER Analytics platform.  The Census poverty statistics are published annually; the most recent data available currently is end of 2013.

From 1985 to the beginning of the recession, SNAP data and poverty rate indicators tracked closely.  Over the years since the beginning of the recession, the linkages between SNAP participation and poverty rates have weakened.  Loosening of eligibility requirements has been a key cause.

SNAP Participation Compared to Other Poverty Measures


Source:  USDA Office of Policy Support

The most recent data shows a wide range of changes in SNAP participation among the States:


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While the 9.5% increase in Nevada and 8.3% increase in New Mexico appear dramatic, they are not attributable to economic weakness, but rather are an indirect result of the State Medicaid expansions under the Affordable Care Act.  Many States used Federal funds provided as part of the Medicaid Expansion to enhance and consolidate enrollment tools for various social welfare programs.  This has lead to an increase in SNAP participation that is not attributable to increased poverty levels.

Using the DIVER Analytics Filter Tool, we can see that nine of the twelve States with increased SNAP participation in the last year are States that participated in the ACA Medicaid expansion.  Note that Philly Fed Coincident Index for all these States (except West Virginia) shows positive economic growth.


Source:  DIVER Analytics-Filter Tool, USDA, The Advisory Board Company

Massachusetts (-11%) is the State with the largest decline in SNAP participation.  In that State, an effort to modernize that enrollment system has caused problems that lead to many previous participants being un-enrolled.


Map of the Week:  Residential Mortgage Delinquency Rate

This week we updated the Delinquency Rate (Res Mortgage) dataset in the DIVER Analytics platform.  Nevada (-1.6%) and Massachusetts (-1.5%) have shown the most improvement since last year.   Nevada’s delinquency rate (4.7%) is now lower than the United States average (4.9%).



The States with the least improvement include Maine (-0.3%) whose rate remains slightly high (6.4%).  The lack of improvement in other lagging States is likely attributable to already low rates of delinquency:  South Dakota (2.7%), Hawaii (3.8%), North Dakota (1.7%) and Alaska (3.3%).

Have a great week,

 Michael Craft, CFA

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