Where are we now

Financial shocks are common in the United States, even before the pandemic and especially among low- and moderate-income (LMI) households (Pew Charitable Trusts, 2015; Acs, Loprest, Nichols, 2009; Chase et al., 2011). Because of a tangled web of information about services, complex and burdensome application and payment systems, millions of American families miss out on help getting food, health insurance, and other supports to build better lives for themselves and their children when facing a financial shock like an unexpected medical bill, the loss of income, raise in rent or loans coming out of deferment.

More than a quarter of eligible people facing a financial shock receive no help from any federally funded program, and Benefits Data Trust estimates that across just five programs, more than $60 billion/year in benefits are unclaimed. Nationally, almost 1 out of 5 people eligible for SNAP food assistance do not receive it. And even for the families that do get access to benefits, millions waste countless hours and miss important days of work getting the help they qualify for and need. The Brookings Institute estimates that slower payment systems alone have cost low- and middle-income Americans at least $100 billion over ten years.

Where we want to be

Ultimately, the goal is that Americans seeking crucial services be able to:

  • Apply in 20 minutes
  • Enroll in 24 hours
  • Receive services within a week
  • Have equitable, high quality service experiences including wraparound supports

Through efficiency gains, we can improve program integrity and improper payments rates, reduce program administration costs due to “churn,” and shift the work of Local, State, Tribal, Territorial, and Federal governments from low-to-high value work, in particular in the context of reductions in force with increasing administrative tasks.

Where we will start

The state of Michigan provides a benchmark to deliver at the speed of need: Michigan went from a +40-page paper-based application process that took months for final determinations to today – families can now enroll in health, food, cash, housing and child care assistance within 24 hours using streamlined, secure, automated and data-driven determinations and renewals. The state also saved hundreds of thousands of staff administrative hours, enabling the state workforce to focus on more critical tasks rather than cutting jobs. This team will validate the Michigan case study for adaptations needed to work in a variety of states, and develop a playbook for updating forms, guidance, rules, and other policy levers of the Federal government in order to increase adoption of this model.

Through Summer 2022, the project team will seek to engage with Americans who have and are facing the most common triggers of financial shock, with a specific focus on underserved and low- and moderate- income (LMI) including (un)derbanked people.

For the purpose of this initiative, we will explore a financial-shock journey that runs from the initial financial event (e.g., loss of a job, rent increase) to the point of receiving and maintaining a service/benefit that addresses that loss.

We will also explore issues related to “churn” — where members of the public fall in and out of eligibility for services due to ongoing financial instability — as well as drop-offs between application to adjudication of benefits, either after initial enrollment or during renewals. This will be particularly important in the context of the public health emergency unwinding.