Executive Summary

Each year the U.S. Department of Agriculture (USDA) must estimate the number of people who are eligible to participate in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). This federal grant program to states provides benefits and services to pregnant and postpartum women, infants, and young children who meet income criteria for eligibility or who are enrolled in other federal public assistance programs (called adjunctive eligibility) and who are considered nutritionally at risk. USDA also must estimate the number of people who would participate if the program is fully funded—that is, if there are sufficient funds to serve all who are eligible and wish to participate. These estimates serve as a basis for making budget requests for the program for the upcoming year. The WIC budget for fiscal year 2000 was just over $4 billion, and 7.2 million people participated in the program. Since WIC is not an entitlement program—that is, eligible people can enroll in the program only to the extent that funds are available—underestimating the number of people eligible and likely to participate in WIC may result in a shortfall of funds to serve them. But overestimating the number of people eligible and likely to participate in WIC may unnecessarily limit appropriations to other important programs.

These USDA estimates have come under critical scrutiny in part because the number of infants and postpartum women who have actually enrolled in the program has exceeded the number estimated to be eligible



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Estimating Eligibility and Participation for the WIC Program: Phase I Report Executive Summary Each year the U.S. Department of Agriculture (USDA) must estimate the number of people who are eligible to participate in the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC). This federal grant program to states provides benefits and services to pregnant and postpartum women, infants, and young children who meet income criteria for eligibility or who are enrolled in other federal public assistance programs (called adjunctive eligibility) and who are considered nutritionally at risk. USDA also must estimate the number of people who would participate if the program is fully funded—that is, if there are sufficient funds to serve all who are eligible and wish to participate. These estimates serve as a basis for making budget requests for the program for the upcoming year. The WIC budget for fiscal year 2000 was just over $4 billion, and 7.2 million people participated in the program. Since WIC is not an entitlement program—that is, eligible people can enroll in the program only to the extent that funds are available—underestimating the number of people eligible and likely to participate in WIC may result in a shortfall of funds to serve them. But overestimating the number of people eligible and likely to participate in WIC may unnecessarily limit appropriations to other important programs. These USDA estimates have come under critical scrutiny in part because the number of infants and postpartum women who have actually enrolled in the program has exceeded the number estimated to be eligible

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Estimating Eligibility and Participation for the WIC Program: Phase I Report by as much as 20 to 30 percent. These high “coverage rates” have led some members of Congress to conclude that some people who participate are truly ineligible, and that funding could be reduced somewhat and still meet the needs of truly eligible persons who wish to participate. But some advocates and state WIC agencies believe that the estimates of the number of eligible persons are too low and more people who are eligible and want to participate could do so. In response to these concerns, the Food and Nutrition Service (FNS) of the USDA asked the Committee on National Statistics of the National Research Council to convene a panel of experts to review the methods used to estimate the number of people nationwide who are eligible and likely to participate in the WIC program. The panel’s charge is to review currently used and alternative data and methods for estimating income eligibility, adjunctive eligibility from participation in other public assistance programs, nutritional risk, and participation if the program is fully funded. The study has two phases. In this first phase, the panel is to assess the current methodology for making eligibility and participation estimates and, if possible, to recommend improvements to the methodology. In the second phase, the panel will examine alternative methods and data sources for estimates, consider improvements in data that could affect the estimates, and explore selected topics in more detail. The principal finding of the panel’s initial work is that the current methodology and assumptions employed by FNS substantially understate the number of people who are income eligible for WIC. CURRENT METHODOLOGY To be fully eligible for WIC, a person must meet categorical, income, and nutritional risk criteria. Infants age 0 through 12 months, children age 1 through 4 years, pregnant women, nonbreastfeeding women less than 6 months postpartum, and breastfeeding women up to 1 year postpartum are categorically eligible for WIC. To be considered income eligible for WIC, applicants must have incomes at or below 185 percent of federal poverty guidelines, or they must be enrolled in Medicaid, the Food Stamp Program, or Temporary Assistance for Needy Families (TANF) —meaning they are adjunctively income eligible for WIC. Finally, to be fully eligible, an applicant must meet nutritional risk criteria as assessed by a competent professional authority. For example, if an applicant is underweight, is

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Estimating Eligibility and Participation for the WIC Program: Phase I Report anemic, has inappropriate dietary patterns, or has predisposing factors, he or she would be considered nutritionally at risk. The current FNS estimation methodology uses the March Income Supplement of the Current Population Survey (CPS) to estimate the number of infants and children who live in families with annual incomes below 185 percent of the poverty guidelines. The numbers of income eligible pregnant and postpartum women are inferred from estimates of the number of income eligible infants. To obtain estimates of the number of fully eligible persons, estimates of the numbers of eligible people in each category are adjusted to account for the percentage who are also at nutritional risk. Critics of this methodology focus on the failure of the procedure to reflect fully the current eligibility rules and regulations. The current method only partially accounts for those who are adjunctively eligible for WIC based on their enrollment in the Medicaid, Food Stamp, or TANF programs. The current method considers all persons eligible for a full year, even though children and postpartum women are certified for 6-month periods. Not accounting for these two rules could result in biases in estimates of income eligible persons. Some income eligibility concepts are not easily defined when determining whether an applicant is income eligible. Difficulties in defining whose income counts (i.e., who is part of the family, or “economic unit”) and the accounting period for income (monthly versus annual) can result in variability in how eligibility definitions are applied in local WIC offices. Failure to account for this variability that results from the flexibility local WIC offices have in applying eligibility definitions presents the potential for errors in the estimation of the number of people eligible for WIC. Given the short time period for the first phase of the study, the panel chose to focus on the following estimation issues that were thought to have the largest overall impact on the number of people eligible for WIC: the accuracy of the CPS in counting all infants and children; adjunctive eligibility through the TANF, Food Stamp, and Medicaid programs; use of monthly income versus annual income to determine income eligibility; adjustment for 6-month certification periods; alternative definitions of the economic unit; the number of individuals who are at nutritional risk among those who are income eligible for WIC.

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Estimating Eligibility and Participation for the WIC Program: Phase I Report The first five areas pertain to the estimation of the number of income eligible persons—those individuals who are categorically eligible and meet the income criteria for the program. The sixth issue is the extent to which individuals are fully eligible for WIC—that is, both income eligible and at nutritional risk. In addition to these six issues for estimating eligibility, the panel also examined current methods for estimating the proportion of fully eligible persons who would participate in WIC under full funding. CONCLUSIONS AND RECOMMENDATIONS Income Eligibility Accuracy of the CPS in Its Representation of All Infants and Children in the Population The current weighting scheme employed by the CPS underrepresents the number of infants by roughly 2 percent but overrepresents the number of children by 0.6 percent. This underrepresentation results from the way the CPS sample estimates for nonwhite children are controlled to population totals. Underrepresentation of the total number of infants implies an understatement of the estimated number of infants and women who are eligible for WIC. Adjunctive Eligibility Many people are adjunctively eligible for WIC through their enrollment in other transfer programs, especially Medicaid, which has higher income eligibility thresholds in some states than WIC does. Since current methods make only a very minor adjustment for those adjunctively eligible, the number of eligible persons is understated. Taking a conservative approach of counting only those who are enrolled in these programs as adjunctively eligible, the panel’s estimates show that the number of eligible infants increases by 45 percent and the number of eligible children increases by 21 percent compared with estimations using current methods. Conclusion: Not fully accounting for adjunctive eligibility results in a substantial underestimation of the number of people eligible for WIC.

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Estimating Eligibility and Participation for the WIC Program: Phase I Report In addition to these estimates that use a conservative approach to estimating the number of participants who are adjunctively eligible for WIC due to their participation in Medicaid, the panel considered two alternative estimates: (1) the number of people eligible for Medicaid, and (2) the number of people eligible for Medicaid but without private health insurance. During Phase II of the panel’s work, each of these alternatives will be further scrutinized. Monthly Versus Annual Income Family income can vary considerably over the course of a year. As a result, some families may appear to be income eligible for WIC when monthly income is used to estimate income eligibility, but not if annual income is used. Estimates developed by the panel show that the current method of using annual income to estimate eligibility results in an understatement of the number of infants and children eligible for WIC compared with estimates using monthly income. After accounting for adjunctive eligibility the panel estimates that the use of monthly income increases the estimated number of eligible infants and children by 4 percent and by 9 percent, respectively. Certification Period for Children Children and postpartum women are certified as eligible for WIC for 6-month periods, but current methods for estimating eligibility consider them eligible for an entire year. The panel estimated the number of children who would be income eligible for WIC if an adjustment for this 6-month certification was made. Making this adjustment decreases the number of children eligible for WIC by 5 percent, after accounting for adjunctive eligibility and using monthly income. However, it is 4 percent higher than the estimate that employs annual income and accounts for adjunctive eligibility. Alternative Definitions of the Economic Unit The panel explored variability in the estimated number of eligible infants and children using different definitions of the economic unit. Using a restrictive definition, which counts an economic unit as income eligible only if it meets income eligibility requirements under both a narrow and a

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Estimating Eligibility and Participation for the WIC Program: Phase I Report broad definition of an economic unit, the estimated number of income eligible infants decreases by 0.2 percent and the estimated number of income eligible children decreases by 0.3 percent. However, if one uses a more generous definition, which counts a family as income eligible if it meets income eligibility requirements under either a narrow or a broad definition of the family, then the estimated number of income eligible infants increases by 1 percent and increases by 1.5 percent for children. Nutritional Risk The panel examined recent estimates of the prevalence of nutritional risk for estimating the percentage of income eligible persons who are fully eligible. Current methods for estimating the number of income eligible persons who are at nutritional risk are based on old data. More recent estimates of the prevalence of nutritional risk have been produced, but the data used for these estimates are also old, and do not reflect recent standardization of nutritional risk criteria across states. The panel has concerns about the methods used to make these estimates. Consequently, the estimates of nutritional risk currently used may not accurately reflect the actual number at nutritional risk. Recommendation: Estimates of nutritional risk should be reexamined with more recent data and with additional data sources and should take new state standards of nutritional risk into account whenever possible. Full Eligibility Considering all of these eligibility estimation issues and the size of their effects on the eligibility estimates as a whole, it is apparent that current methods underestimate the number of people who are eligible for WIC. Conclusion: The panel concludes that current methods used to estimate eligibility for WIC substantially underestimate the number of people who are eligible. The underestimation of eligibility implies that coverage rates are overstated. On the basis of simulation results prepared by the panel, the number

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Estimating Eligibility and Participation for the WIC Program: Phase I Report of infants estimated to be eligible for WIC is underestimated by a total of 54 percent (considering the undercount of infants in the CPS, adjunctive eligibility, and the use of monthly instead of annual income). If the 1999 coverage rate of 130.4 percent based on current USDA methods is recalculated using the panel’s higher estimate of eligible infants, the coverage rate falls to 84.7 percent. Presumably the coverage rates of pregnant and postpartum women would fall similarly. For children, the total underestimation of those eligible is 25 percent (considering an overcount of children in the CPS, adjunctive eligibility, the use of monthly instead of annual income, and a 6-month certification period). The 1999 coverage rate for children was 76.0 percent based on current USDA methods. If this rate is recalculated with the larger estimate of eligible children, it falls to 60.8 percent. Thus, coverage rates based on the panel’s estimates of eligibility would fall considerably if these estimates pass further scrutiny. It is important to note that although the panel concludes that the estimated number of those eligible is understated and coverage rates are subsequently overstated, it is still possible that ineligible persons are participating in WIC. Estimating Full-Funding Participation Past practice in estimating participation has assumed that participation rates for WIC would mirror participation rates for the Food Stamp Program for children age 0 to 4 years. Until recently, participation rates for this program from the late 1980s were used as a basis for adjusting the eligibility estimates, meaning that roughly 80 percent of those eligible were estimated to participate. Assuming that WIC participation rates will be similar to those of the Food Stamp Program is problematic because the two programs are very different in terms of their eligibility rules, benefit levels, purposes, and possible stigmas. These differences are likely to have differential effects on an individual’s decision to participate. Conclusion: Use of food stamp participation rates as a proxy for WIC participation rates is inappropriate because the program rules and goals, populations targeted, benefits provided, and public stigmas of these programs are sufficiently different that participation decisions for the program are also likely to be quite different.

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Estimating Eligibility and Participation for the WIC Program: Phase I Report Recommendation: The panel recommends that alternative methods for estimating WIC participation rates be examined. In addition, further research concerning factors that influence the decision to apply for and participate in WIC should be conducted. The panel has not had time in this first phase of the study to fully consider alternative methods for estimating participation rates, but it does propose a short-term alternative in the interim. The method multiplies lagged WIC participation rates from the latest year available by estimates of eligibility for the prediction year to compute an estimate of participation for the prediction year. The panel’s future work will explore the appropriateness of this method and other methods more fully. METHODOLOGICAL ISSUES FOR FURTHER CONSIDERATION IN PHASE II OF THE STUDY The second phase of the panel’s work will focus on alternative estimation methods to reduce the substantial systematic biases present in the current estimates of eligibility. Methods for estimating the number of people who are adjunctively eligible for WIC will be a priority in Phase II. Other eligibility topics the panel will further investigate include use of the Survey of Income and Program Participation (SIPP) or other data alternatives or supplements to the CPS; estimating eligibility in the U.S. territories (American Samoa, Guam, Puerto Rico, and the American Virgin Islands), methods for estimating the number of eligible pregnant women; methods for estimating breastfeeding rates in order to estimate the number of eligible postpartum women; and methods and data for estimating the prevalence of nutritional risk. In addition, the general precision of the eligibility estimates will be explored. Finally, Phase II will examine alternative methods to estimate the number of eligible people who are likely to participate in WIC if the program is fully funded.