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Executive Summary The Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC as it is better known, is a federal grant program to states that provides benefits and services to groups who are at substantial risk of poor nutrition. The program provides specific types of foods, nutritional risk screening, nutrition education, and other services to pregnant and post- partum women, infants, and young children who have low incomes and who are deemed to be at nutritional risk. The program was designed as a component of good pre- and postnatal health care and to improve the health status of these nutritionally vulnerable populations. WIC enjoys strong po- litical support, largely because research has shown that the program has contributed to such positive outcomes as improved birthweights, reduc- tions in Medicaid costs after birth, and reduced anemia in young children. WIC is not an entitlement program that is, the number of eligible people who can enroll may be limited by the amount of funds appropriated to the program. In order to help inform budgetary decisions for the pro- gram, each year the U.S. Department of Agriculture (USDA) estimates the number of people who are eligible for the program and the number who are expected to participate if the program is fully funded meaning that allocated funds are sufficient to serve all who want to participate. The accu- racy of these projections is very important. If the projections are too low, eligible people may not be able to receive WIC benefits. If the projections are too high, then other valuable programs may not receive appropriate levels of funding.

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2 ESTIMATING ELIGIBILII~YANDPARTICIPATIONFOR THE WICPROGRAM USDA estimates of eligibility and participation have come under criti- cal scrutiny. In recent years, some coverage rates which are computed as the number of women, infants, and children receiving WIC benefits in a given year divided by the USDA estimates of the number of people eligible for that same year have exceeded 100 percent for some groups to which the program's benefits are targeted. Some advocates and state WIC agencies believe that these high coverage rates result from USDA estimates of eli- gible people that are too low and that there are additional eligible people who want to participate but are not being served with current funding levels. However, the high coverage rates have led some members of Con- gress to conclude that some participants are truly ineligible, and that fund- ing could be reduced somewhat and still meet the needs of truly eligible people who would participate under full funding. PANEL CHARGE AND APPROACH In response to these concerns, the Food and Nutrition Service (ENS) 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 national number of people eligible and likely to participate in WIC under full funding of the program. The panel is charged with reviewing alternative data sets and methods for estimating income eligibil- ity, adjunctive eligibility (which occurs when people are eligible for WIC because they are enrolled in other federal public assistance programs) and nutritional risk, as well as for estimating participation if the program is fully funded. To evaluate the current estimation methodology and alternatives to it, the panel considered the size and nature of errors produced by components of the methodology. When possible, the panel used alternative methods with available data to estimate eligibility and participation for WIC and compared these estimates with those using current FNS methods and data. The panel considered several factors for evaluating alternatives: the accu- racy of the estimates that result from an approach, the feasibility of imple- menting an approach (e.g., the expense and burden of implementation), and the quality, availability, and timeliness of the data used by an approach. The panel also based its assessments of methodologies on the premise that the methodology should reflect the current rules and practices of the program. For example, those who are enrolled in Medicaid, Temporary Assistance for Needy Families (TANF), or food stamps are adjunctively

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EXECUTIVE SUMMARY 3 eligible for WIC regardless of their incomes. Thus, estimates of eligibility should account for adjunctive eligibility, and the panel explored different methods for doing so. THE WIC PROGRAM Individuals must meet three types of eligibility to be fully eligible for WIC: categorical, income or adjunctive, and nutritional eligibility. Infants up to age 1, children ages 1 to 5 years, pregnant women, women who are less than 1 year postpartum and breastEeeding, and women who are less than 6 months postpartum but not breastEeeding are categorically eligible for WIC. To be income eligible for WIC, people in these categories must live in families with incomes below 185 percent of the federal poverty guide- lines, or they must participate in Medicaid, food stamps, or TANF, which is called adjunctive eligibility. Finally, an individual must be considered nu- tritionally at risk by meeting at least one of many nutritional risk criteria (e.g., low birthweight). Once deemed eligible for WIC, individuals are cer- tified to receive benefits for a number of months: infants are certified for 12 months, children for 6 months, pregnant women for the length of their pregnancy plus 6 weeks postpartum, and postpartum women, both breastEeeding and nonbreastEeeding, for 6 months. E S T I M A T I N G E L I G I B I L I T Y A N D P A R T I C I P A T I O N Estimates of WIC Eligibility A major conclusion of the panel is that current estimation methods result in a substantial underestimate of eligibility because monthly income and adjunctive eligibility are not adequately measured. Panel estimates show that a substantially larger number of people would be eligible for WIC if a monthly income measure is used instead of an annual income measure, which is the measure currently used. Compared with estimates based on current USDA methods, estimates made using monthly income data from the Survey of Income and Program Participation (SIPP), accounting for WIC certification periods and adjunctive eligibility (through reported en- rollment in food stamps, Medicaid, or TANF), resulted in a 46 and 54 percent increase in the number of income-eligible infants in 1997 and 1998,

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4 ESTIMATING ELIGIBILITYAND PAR TICIPATION FOR THE ~CPROGR~ respectively. The increases for older children were 34 and 36 percent, re- spectively, for those years. The majority of the estimated increase in eligibility is due to the com- bination of accounting for monthly income and certification periods. Due to certification periods, it is possible for a person to be certified as eligible in months in which a person is not eligible based on that month's income or participation in means tested programs. The panel estimated that for infants in 1997, 18 percent of the months that were certified to infants were to infants whose monthly household income exceeded eligibility lim- its in one or more of the months in which they were certified, whose annual household income exceeded 185 percent of poverty, and who did not re- port participation in programs that confer adjunctive eligibility during the calendar year. For children, this figure is 14 percent. The panel also determined that the current adjustment used to esti- mate the number of people adjunctively eligible for WIC is not adequate and results in an underestimate of eligibility. With expansions in the Med- icaid program that raised the income limit for eligibility well over 185 percent of federal poverty guidelines in many states, some people with an- nual incomes over 185 percent of poverty could be eligible for WIC be- cause they were enrolled in Medicaid, but they would not be counted as such in the eligibility estimates. Compared with estimates based on the current USDA methodology, eligibility estimates made using SIPP data and reported participation in Medicaid, TANF, and food stamps, account- ing for adjunctive eligibility alone (without accounting for monthly in- come) results in an additional 18 percent of infants eligible and an addi- tional 10 percent of children eligible for WIC. The panel concludes that current estimation methods result in an un- derestimate of eligibility because monthly income and adjunctive eligibility are not addressed. Underestimates of eligibility imply that USDA coverage rate estimates for each eligibility category are overstated, assuming no changes in the level of WIC participants (both eligible and ineligible). We also reviewed methods to estimate the percentage of postpartum women who breastSeed. The panel concludes that currently used adjust- ment factors, which are based on data collected in 1988, do not reflect current rates of breastSeeding in the population. More recent estimates show an increase in the percent of postpartum mothers who breastSeed their in- fants. The panel recommends that USDA should use more recent data to estimate new adjustment factors for the percentage of WIC-eligible post- partum women who breastSeed their infants.

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EXECUTIVE SUMMARY 5 Nationally representative data indicate that the percentage of income- eligible individuals who are fully eligible because they are also at nutritional risk is very close to 100 percent for every categorical group. In WIC service settings, feasible methods to screen for nutritional risk are not accurate enough to identify the small percentage of those who are income eligible but not at nutritional risk. The panel's analysis of the costs and benefits of administering a nutritional risk screen does not support using the screen for eligibility determination. In addition, a recent Institute of Medicine report recommends presuming that all women and children ages 2 to 5 years are nutritionally at risk. Based on these findings, the panel concludes that, for the purpose of making budgetary estimates, all income-eligible individuals should be considered nutritionally at risk. If the USDA adopts this recommendation, an adjustment for the prevalence of nutritional risk among the income-eligible population is not needed. Estimates of WIC Participation Rates Among Eligible Individuals Estimates of eligibility and reported WIC participation from SIPP show that WIC participation rates vary considerably across eligibility cat- egories. The best available estimates of current participation rates show that 73 percent of eligible infants, 38 percent of children, and 67 percent of pregnant and postpartum women participate in WIC (Biller, Currie, and Scholz, 2002~. All of these estimates are lower than the 0.80 (80 percent) value used by USDA.1 Further, these estimated participation rates do not include those individuals who report receiving WIC but are ineligible for WIC based upon their reported income and program participation status. Based on 1998 SIPP data, 5.7 percent of infant participants appear not to be eligible, 5.4 percent of child participants appear not to be eligible, and 6.2 percent of pregnant and postpartum women appear not to be eligible. The most recent USDA estimate of the number of ineligible WIC partici- pants (overall eligibility categories) is 4.5 percent (USDA, 2001~. If those who report WIC participation even though they are not eli- gible are included as participants, these estimated participation rates (using The panel's estimates are based on SIPP data rather than the Current Population Sur- vey and use monthly rather than annual income, account for certification periods, and ac- count for adjunctive eligibility. Thus, the denominators used by the panel to estimate these participation rates are larger than those used by the current USDA estimation methodology.

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6 ESTI~TING ELIGIBILI>~D PAR TICIPATION FOR THE ~CPROG~ the same estimate of eligibility that is, the same denominator) would in- crease to 78 percent for infants, 40 percent for children, and 71 percent for pregnant and postpartum women. Given these estimates, the USDA's 80 .. . . . . .. percent participation assumption IS very G .ose to tne estimates ~ partlclpa- tion rate for infants and not far off for pregnant and postpartum women. However, participation rates for children are much below the 80 percent assumption. ALTERNATIVE ESTIMATION STRATEGIES Estimating Eligibility The panel identified two strategies to estimate eligibility: one is a Cur- rent Population Survey (CPS)-based option and the other uses SIPP. Each has strengths and limitations in terms of accuracy, feasibility of implemen- tation, and quality, availability, and timeliness of the data used. The CPS-Basedt Option The major limitation of the CPS for estimating WIC eligibility is that it measures only annual income and annual participation in WIC and in other public assistance programs that confer adjunctive eligibility for WIC. Use of a monthly measure of income instead of an annual measure, as is currently used, was chosen as the most appropriate time period to measure income to estimate eligibility because WIC regulations give great flexibility in the unit of time for which an applicant must report income and because variation in flows of income for families are better captured with a monthly income measure. The panel proposes the following new CPS-based option to improve the current CPS estimation. Step 3, which is a crude method to account for the major limitation in the current methodology, is discussed in greater detail at the end of the steps. Step 1 To correct for CPS undercounts of infants and overcounts of chil- dren, use adjusted weights. Step 2 To estimate the number of income-eligible infants and children (the core estimates), use annual income from the CPS. Step 3 Use reported participation in Medicaid, TANF, and food stamps to approximate the number who are adjunctive eligible for WIC. Step 4 To account for monthly income, apply a constant multiplier to

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EXECUTIVE SUMMARY 7 the core estimates based on annual income. The panel used Trans- fer Income Microsimulation (TRIM) data, which simulates monthly income based on the March CPS to estimate a multiplier for infants and children: 1.20 for infants and 1.05 for children. An alternative to using this TRIM-based multiplier is to use SIPP data to estimate a similar multiplier. The multiplier is used to ap- proximate the incremental effect of using monthly income instead of annual income. Step 5 To estimate the number of income-eligible pregnant women, ap- ply an adjustment of 0.53 (instead of the 0.75 factor currently used) to the number of income-eligible infants, to account for income eligibility during pregnancy. Step 6 To estimate the number of income-eligible postpartum women from CPS-based estimates (both breastEeeding and nonbreast- feeding), continue to use the current adjustment factor of 0.9844 to account for multiple births and infant and fetal deaths. Step 7 To estimate the number of postpartum women in the breastSeeding and nonbreastEeeding eligibility categories, use updated estimates of breastEeeding rates among income-eligible postpartum women with the current USDA method of constructing adjustment fac- tors Step 8 To update the current adjustment factor for eligibility in the U.S. territories for all categorical groups, use 2000 census data. Step 9 Presume all income-eligible individuals are also at nutritional risk and thus fully eligible.2 An alternative to the use of the monthly income multipliers in Step 4 is to use SIPP data to estimate similar multipliers and apply them to the CPS estimates of eligibility based on annual income. This alternative should be given serious consideration, since SIPP has better measures of monthly income. The panel did not have enough time or resources to estimate such a multiplier, so the stability of a SIPP-based adjustment for monthly in- 2If the USDA does not drop the nutritional risk screen for determining eligibility, then the panel's lower bound estimates of the prevalence of nutritional risk among the income- eligible population should be used to estimate eligibility. These lower bound estimates are: 100 percent for breastfeeding postpartum women, 97 percent for pregnant women, 97 per- cent for infants, and 99 percent of children ages 2 to 5.

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8 ESTIMATING ELIGIBILI~YANDPARTICIPATIONFOR THE WICPROGRAM come should be assessed before it is implemented. Considering the results presented above from the 1997 and 1998 SIPP panels about the effect of monthly income and adjunctive eligibility, it appears that the SIPP picks up more variation in income than the TRIM data. This is not surprising, given that TRIM tries to simulate monthly income based on an annual measure of income. It does indicate, however, that a SIPP-based multiplier is likely to be larger than the TRIM-based one given here. Use of either of these proposed constant multipliers for monthly in- come (the TRIM-based ones or SIPP-based ones) would require that the multiplier be reestimated every few years. Its stability over time should also be continually reassessed. The SIPP Option An alternative option is to use SIPP alone to estimate eligibility. SIPP's major advantage is that it collects monthly income and program participa- tion information. The SIPP also has an advantage in that it is possible to more directly estimate the number of income-eligible pregnant and post- partum women instead of inferring these numbers from the number of income-eligible infants. The following steps would be taken to estimate WIC eligibility with SIPP: Step 1 Use monthly income to estimate the number of infants, children, pregnant women, and postpartum women who are eligible. Step 2 Include those who report participation in Medicaid, TANF, or food stamps as adjunctively eligible regardless of income. Step 3 Appropriately account for certification periods for each group. Step 4 Use updated estimates of breastSeeding rates among income-eli- gible postpartum women with the current USDA method of con- structing adjustment factors to estimate the number of postpar- tum women in the breastSeeding and nonbreastSeeding eligibility categories. Step 5 For all categorical groups, use 2000 census data to update the cur- rent adjustment factor for eligibility in the U.S. territories. Step 6 Presume all income-eligible individuals are also at nutritional risk and thus fully eligible (see footnote 21.

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EXECUTIVE SUMMARY Comparison of the Two Options 9 Each of these options has its merits and limitations. The panel agrees that to the extent that it is possible with currently available data, the proce- dure for estimating eligibility should take into account variation in income over a year and adjunctive eligibility. For this, SIPP is superior in that it collects monthly income and program participation. However, in order to take advantage of SIPP's longitudinal data, considerable time is required to accumulate enough waves of data to observe eligible people. Attrition be- tween waves also complicates the use of SIPP and may affect data quality. Furthermore, the release of SIPP data has, in the recent past, been quite slow. Thus, the delays in data lead to a longer lag between the time the data are produced and the year for which estimates are being made. The CPS is produced on a more timely basis, but it does not collect monthly informa- tion on either income or program participation. USDA will need to weigh the benefits and limitations that each option presents. Estimating Program Participation Is WIC fully funded that is, have sufficient funds been allocated to serve all those who wish to participate in the program? Given that in recent years the number of WIC participants served in a given year has been very close to the number USDA projected would be served in that year, priority waiting systems have seldom been used during these years, and USDA has rarely had to request supplementary funds from Congress, one might con- clude that the full-funding participation levels have been achieved. If this is the case, then current participation levels could be used to determine how many participants future budgets should cover. Adopting this approach would essentially say that, even though not all eligible people are partici- pating, we could not expect more people to participate given current pro- gram rules and administration, and assuming no change in external factors that might affect participation (e.g., the economy). In the panel's view, however, concluding that WIC has been fully funded is not correct. Rather, the number of participants under full fund- ing is a policy choice that is, the number can be altered by changes in program rules or administrative practice. Policymakers may want WIC ben- efits to be targeted to those who have greater need, for example, those with the lowest incomes. Or, policymakers may want to increase the percent of eligible people who participate. There may be many people who are eligible

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10 ESTIMATING ELIGIBILITYANDPARTICIPATIONFOR THE WICPROGRAM for WIC and who could benefit from the program but who are unaware of or cannot easily take part in it. Local outreach efforts or changes in the administration of the program (e.g., more conveniently located offices or evening office hours) may mean that a greater percentage of eligible people apply for the program. This does not necessarily mean that a full 100- percent participation rate can be achieved administrative changes and program outreach will never reach all eligible people, and not all those who are eligible will choose to participate. Nor that a precise target participation rate can be achieved, as the decision to participate, given program rules, is a behavioral choice for an individual. But policy makers do hold a great deal of leverage in determining the full-funding level of participation. The panel outlined a strategy to predict the number of participants each year for the purpose of making budget estimates. This strategy is based on the premise that the full-funding level of WIC participation is a policy goal and that policy makers can assess whether the goal, the full-funding participation rate (FFPR), has been achieved or not by using estimates of coverage rates. The strategy the panel recommends depends on whether the FFPR has been achieved or not. If the FFPR has been achieved, then the method to estimate participation levels is simply to use last year's participa- tion levels. However, if the FFPR has not been achieved, then the method multiplies the desired FFPR by the estimated number of eligible persons in the eligibility category. The recommended steps are summarized as follows: Explicitly state the rate of participation in the WIC program that is consistent with the policy goal of fully funding the program. During the process of estimating the number of participants for budgetary planning, compute the number of eligible individuals by participant group (infants, children, and pregnant, breastEeeding postpartum, and nonbreastSeeding postpartum women) and their respective coverage rates using concurrent administrative data for the actual number of participants (i.e., use administrative data for the same year covered by the survey data that are used to estimate eligibility). Estimates of eligibility should be made using one of the options the panel recommends above. Separately for each participant group, determine whether the group's coverage rate exceeds the FFPR. If the coverage rate does exceed the FFPR, then use the most recently available administrative data on the number of participants to estimate the number of participants.

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EXECUTIVE SUMMARY 11 If the group's coverage rate does not exceed the FFPR, then estimate the number of participants by multiplying the FFPR by the num- ber of eligible individuals from the most recently available data. Alternatively, construct a three-year weighted average of past cover- age rates. If the weighted average of coverage rates exceeds the FFPR, then the weighted average of past coverage rates for the group would be multiplied by the most recently available estimate of the number of eligible individuals from the participant group. Otherwise, the FFPR multiplied by the most recent estimate of the eligible indi- viduals would be used. The assessment of whether each category of eligible persons has met the desired rate of participation should be made each year. Furthermore, since it is likely that not all eligibility categories will meet the full funding level, separate assessments, and then corresponding estimation methods, should be made for each eligibility category. Policymakers could, as an alternative to setting full-funding participation goals by category, set them by other groups of priority, for example, by those in most need. This could be done within an eligibility category as well (e.g., infants with the lowest income). The strategy outlined here to estimate the number of participants im- plicitly assumes that the number of eligible individuals and, correspond- ingly, the number of participants for the year from which there are data is the same as for the year for which participation is being predicted. How- ever, changes in eligibility or participation could be caused by changes in demographic factors, the economy, or the eligibility rules of WIC or other programs that confer adjunctive eligibility. USDA should explore the accu- racy and feasibility of methods to adjust eligibility and participation fore- casts to account for such changes. In the past, there has been an implicit pledge to fully fund the WIC program based on current eligibility rules. Policy makers can always change this pledge or the rules governing eligibility in the program. Nothing in this report should be construed to imply that if the estimated numbers of eligible individuals increases due to improvements in the estimation proce- dures, that increases in the WIC budget are required. On the contrary, if participation in the program remains constant, increased estimates of the number of eligible people imply only that coverage rates were not as high as previously thought.

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