A Timely Discussion of Needs Based Fares

The following is a copy of an email sent to the Whatcom County Ferry Task Force, by Betsy Schneider, about administering special needs fares.  As usual, Betsy’s in-depth analysis is extremely articulate and detailed and reflects her experience, as well as her recommendations for dealing with this issue.   (The Task Force is scheduled to discuss Fare structure, and Needs based fares administration on Monday, April 18th)

Diane and Task Force Members,

I wanted to share some thoughts with you about the special needs fares for the Lummi Island Ferry. I understand you will be discussing these at your April 18, 2011 meeting.

I have some experience with screening for eligibility for low income programs. I was a Legal Services attorney for many years – we screened each client for income eligibilty according to federal guidelines. I also volunteered for several years as an eligibility screener for a Volunteers In Medicine Clinic in Bend, Oregon. Screenings for income eligibility were scheduled at 20 minute intervals, which was more than adequate to go through the screening process and check documentation.

These screening processes were not 100% perfect – undoubtedly an “over-income” applicant occasionally passed through. But the process worked for the vast majority of applicants. It was not an unduly burdensome process, and a wide variety of people could easilty learn how to conduct the screenings.

I see the questions raised by Steve Oliver and others as falling into 4 areas:

1. Eligibility based on receipt of Medicaid benefits, and eligibility based on low income, are hard to determine.

2. There’s a disparity between the income level used to determine eligibility for seniors/disabled through the property tax exemption and the income level used to determine eligibility for other low income people.

3. No one wants to administer the eligibility screening program.

4. Special needs passes are subject to abuse because there are no controls to ensure that the cards are used only by eligible people (as opposed to purchased by eligible people and shared with others). Steve mentioned that there’s no way to audit how the cards are used.

Difficulty of determining eligibility.

According to Steve Oliver’s presentation to the Task Force, 85 individuals presently use special needs passes. These individuals are eligible under one of three categories: senior/disabled; Medicaid; and other low income.

Steve indicated that determining eligibility under the senior/disabled category is the easiest and that a little over half of those eligible (43) fall into this category. These eligibility determinations are based on the applicant’s already-established eligibility for a property tax exemption and typically take one 5-minute visit to the county offices. That comes to about 3 1/2 hours of administrative time.

Regarding eligibility based on receipt of Medicaid benefits, Steve indicated that this determination is made difficult by the fact that the current Medicaid cards do not indicate the dates of Medicaid eligibility. As a result, the eligibility screener cannot just ask for a Medicaid card and know that the person is presently income-eligible.

There are a couple of ways to deal with this problem. One is to require the applicant to produce his/her Medicaid eligibility determination letter, which should indicate the dates of eligibility. In Oregon, there was a hotline number which we used to verify with the Department of Social Services that the individual was currently Medicaid-eligible. It’s possible that Washington has such a hotline and that a county governmental office could get permission to access it, with a HIPAA waiver signed by the applicant if necessary, or otherwise verify Medicaid eligibility with a phone call to DSHS.

Steve also expressed concern about differentiating whether the applicant was considered “categorically needy” or “medically needy” under the Medicaid program. From an eligibility standpoint, this is not a distinction that the County needs to worry about, since both categories are based on a determination that the person meets income eligibility guidelines which are stricter than the eligibility requirements for a property tax exemption. It would be helpful to amend Whatcom County Code, section 10.34.020 (L), which states that a special needs pass is available to “all Lummi Island residents who also qualify for medical assistance within the Medicaid Program.” Removing the word “medical” would make it clear that all Medicaid recipients are eligible for the special needs pass.

The final concern Steve expressed was about whether a special needs pass based on Medicaid eligibility should only be issued only for the period of the applicant’s Medicaid eligibility. Medicaid eligibility is normally for either 6 or 12 months, depending on the specific basis for eligibility. Since the County will review special needs eligibility once a year, only those whose eligibility is for six months would need an earlier review. However, a person who is no longer eligible for a special needs pass as a Medicaid recipient will most likely still be eligible under the general low income category, where the eligibility level is, or should be, higher (see discussion below). With this in mind, it seems as though there is little risk of financial loss to the County by allowing special needs passes issued based on Medicaid eligibility to be good for one year, like other special needs passes. In any event, the special needs passes should contain an expiration date.

So . . . if Medicaid eligibility can be determined by seeing an eligibility letter, or by making a phone call to DSHS after getting a HIPAA waiver for this purpose from the applicant, these eligibility determinations should take no more than 10 minutes altogether. Steve indicated that only 10 of the current special needs pass holders are eligible based on Medicaid eligibility, so we are looking at less than two hours of administrative time.

Determining eligibility based on income alone (rather than Medicaid or property tax exemption) is a more detailed process, but still one that is not difficult to administer, once the standards and procedures are made clear. There are several ways the county could set up a more accurate process for determining income eligibility.

The county assessor’s office is already involved in making these determinations for people who apply for a property tax exemption. The process used is described in plain language in a Washington State Department of Revenue publication “Property Tax Exemptions for Senior Citizens and Disabled Persons,” dated December 2010 (copy attached).

This procedure is designed to, among other things, include the income of everyone in the household, and ensure that investment income, dividends and interest income are included and that investment losses are not used to distort actual income. I think this procedure, with minimal modifications, could be used to determine income eligibility for special needs ferry passes.

Other resources are also available for input, such as the local Legal Services office, various Volunteers in Medicine clinics around the country, and other agencies in Whatcom County that do income eligibility screening, including the Opportunity Council. When all is said and done, the screening of the 31 pass holders who are eligible based on low income should take no more than 20 minutes per person, adding up to ten hours and 20 minutes of administrative time.

Steve Oliver expressed several concerns, other than the time involved, about the income screening process. He said it there is no way to verify the number of people in the household. This information can be cross-checked by looking at the applicant’s income tax forms. Questions can be asked about names and ages of children. Many agencies, such as the assessor’s office and DSHS, have to verify household composition. Most, I think, take the applicant’s word for it, with possibly a few follow-up questions.

Steve was also concerned that there is no way to know if all household income is being disclosed. If the procedures described in the property tax exemption publication are followed, there will be plenty of opportunity to verify income. Applicants will produce income tax forms, bank statements, and other proofs of income. Follow up questions can be asked – “How were you able to pay your property taxes last year?” As I stated above, it’s not a 100% perfect system, but what is? The system works very well for other income-dependent programs and can work just as well for the ferry.

If we total the time necessary to process all three kinds of eligibility determinations, the total comes to just under 16 hours, or 2 working days.

Disparity between senior/disabled income levels and others

I agree that we need to do something about the huge disparity between income cut-offs for eligibility for those in the senior/disabled category and those in the low income category. (I’m not worried about the Medicaid category because those income cut-offs are lower than the other two.)

By law, the income cut-off for eligibility for a property tax exemption is $35,000 per year. This includes all income from whatever source (minus some medical expenses) of everyone in the household who has a property interest in the home. (For our purposes, it could include the applicant and spouse or domestic partner and any children counted in family size who contribute to household expenses.)

Under the current Whatcom County Code, section 10.34.020 (K), the income cut-offs for eligibility for a special needs pass are: $10,000 for an individual; $20,000 for a family of two; $30,000 for a family of three; and $40,000 for a family of four. This section of the Code should be amended to reflect a more current and fairer scale, based on 200% of the federal poverty level.

The United States Department of Health and Human Services establishes the federal poverty level each year. I suggest that we use 200% of the 2011 federal poverty level. Many federally-funded poverty programs base eligibility on 200% of the poverty level, including Washington’s Basic Health Plan and Community Health Services; this standard is also used at the Volunteers in Medicine Clinics around the country. Under this standard, eligibility would be determined on annual income as follows:

Individual: $21,780
Family of 2: $29,420
Family of 3: $37,060
Family of 4: $44,700
Family of 5: $52,340
Family of 6: $59,980

This would significantly reduce, but not eliminate, the disparity between the types of eligibility. The figure for an individual would be much more realistic. The amounts for a family of 2, 3 or 4 would be only somewhat higher than the previous figures and would take into account cost of living increases, as the annually-changing federal poverty level figures do. The disparity that remains is much smaller and more in line with other discounts often provided for elderly and disabled people. This would require an amendment to Whatcom County Code, section 10.34.020 (K).

Who should administer the program

First, let me address the suggestion that the eligibility screening should be handled by Lummi Islanders themselves. It is simply not appropriate for this type of screening to be done by the friends and neighbors of the applicants. I won’t elaborate on this because I think it is self-evident.

My vote would be for the assessor’s office to adminster the program, since they are already doing this type of screening for property tax exemptions. If this is not feasible for some reason, then the finance office or the public works department, when properly trained in standards and procedures, should do the screening. It should take no more than two days per year of clerical time.

The suggestion that the screening be contracted out to an experienced poverty agency, such as the Opportunity Council, is also worth exploring.

Avoiding misuse of discounted ferry passes

This is an issue that should be addressed with regard to all types of discounted (or free) ferry passes, including those used by County officials, tribal members, and present and past ferry crew members. Many of these have simply been unaccounted for up until now, and the whole system needs to be tightened up to avoid complaints of abuse and loss of revenue.

With regard to special needs passes, since there is probably no way to control the number of passes issued to an eligible person during the eligibility period, there should be clear rules as to who can use the pass and easily implemented procedures for ensuring that only eligible pass holders are using the passes.

Users of special needs ferry passes should be limited to the applicant him/herself and any family members (spouse or domestic partner and children) who are included in the family membership calculation. One possibility would be to print passes with a blank for names to be written in, with the responsible clerk writing in the names of eligible users. Or maybe the system can be computerized in a way that would allow passes to be produced with the names of family members already printed on them. ID would be required unless and until ferry crew is sure that they know the individuals without the need for ID. Training should be provided for ferry crew members.

Needless to say, this approach is not as simple as just issuing the passes and not requiring any ID. It places a slight additional burden on both the pass holders and the ferry crew. But if this is what it takes to keep the system in place with some integrity, then it’s a step that will have to be taken. I think this is the toughest issue here, and others may have better suggestions as to how to handle it.

In closing, I want to urge the Task Force to take a strong position in favor of continuing the special needs passes and making them affordable for low income residents. Many of the low income residents of the Island have been part of this community for many, many years. To suggest that they just move off the Island if they can’t afford the ferry (which has grown astronomically more expensive in recent years) is not only cruel, but it’s also very unrealistic. Who can sell a house on Lummi Island these days? The real estate market in general is terrible, and the uncertainty about the ferry (and increase in rates) has brought sales almost to a standstill. Times are tough and we will hate ourselves in the morning if we let our low income neighbors go under during this crisis.

Thank you all for everything you are doing.
Betsy Schneider
Lummi Island

WA DOR on Property Tax Exemption

4 thoughts on “A Timely Discussion of Needs Based Fares

  1. Dear Betsy,
    Thank you very much for your details and willingness to discuss these difficult issues. I would like to suggest that Judy at the Northwest council for the aging and medicaid transport may be a good person to contact about the verification/application process. This is a 4 county regional organization including services for medicare and medicaid clients of Lummi Island as well as the San Juan Islands to Dr. visits in Anacortes. Any one on Lummi Island with Medicare/medicaid can be re-embursed for trips to the doctor if they can’t afford the ferry or gas. This is the purpose of the councils job and seems like a perfect fit to me. Call [360]-676-6749 but be specific because they have many departments
    also, if someone wants to write a letter about needs based passes it can be sent to
    Steven Oliver , 311 Grand Ave.Suite 104 Bellingham Wa.98225
    People who receive property tax reductions still pay separately for the fire department. I wonder why there cant be a tax like this for our ferry funds. I am low income but I could afford it, It would still be a savings for me over the regular fare. It’s hard for me to understand why people with over 3x more than my income are quibbling over paying for what is to me an obvious priority . I guess its just a difference in priorities. I have had numerous occasion to need medical transportation the last few years , I have a discounted pass, I have never questioned whether it was fair to use my pass to pay for the car when someone offered to drive me in, or help me with my shopping without being paid, or a family member, because I couldn’t drive or walk or carry heavy things. Maybe this is a wrong usage in some peoples view ??? Thanks again Betsy for the time you took to relate all these facts

  2. Thanks to Betsy for a great evidence-driven post on the administration of the needs-based program that also includes a call for compassion to our neighbors.

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