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Why Photo IDs Won't Stop Food Stamp Fraud

As more states consider photo requirements for food stamps, a new report finds Massachusetts' law to be ineffective in preventing fraud.

It won't stop most fraud and it will cost too much. That's the conclusion of an Urban Institute policy brief that assesses states' efforts to require food stamp recipients to present a photo ID when buying food.

But Rhode Island Rep. Patricia Morgan, a Republican, isn't persuaded by the institute's findings. She is the primary sponsor of a bill that would require electronic benefit transfer (EBT) card users to present some kind of photo identification, most likely a driver's license, before they could buy food. It's one of two bills before Rhode Island lawmakers. The other bill, authored by Democratic Rep. Mary Messier, the house deputy majority leader, would add a photo directly onto the card. At least 12 states are considering legislation related to photo identification and food assistance in 2015, according to the National Conference of State Legislatures. Two states, Massachusetts and Missouri, already require a photo to access food benefits.

Morgan and Messier have the same reasons why they introduced their bills. They say they've fielded complaints from constituents about people on the Supplemental Nutrition Assistance Program (SNAP) offering to sell their benefit cards for cash. Both lawmakers also read local news stories last year about Rhode Island retailers and their employees who were convicted in U.S. District Court for more than $3 million in fraudulent SNAP transactions. "It was clear to me that we've got a lot of food stamp fraud," Morgan said.

So, Morgan and Messier reasoned, why shouldn't EBT cardholders have to prove the card is really theirs?

As it turns out, the Urban Institute can offer a number of reasons. First, SNAP benefits are designed to be used by the entire household, not just the head of the household or even family members with the same last name. About a third of SNAP caseloads are elderly or disabled; these individuals can appoint a caregiver who doesn't even live in the household to buy food with the EBT card. Therefore, a single photo would not represent all legitimate users of the card.

Second, federal regulation prohibits retailers from treating SNAP customers differently from other customers, so retailers would have to ask for photo ID for everybody. Retailers in other states have opposed the photo ID measures for fear that they will cause longer lines and create a liability for store clerks who forget to ask for ID.

And finally, photo IDs won't stop the main type of trafficking that the U.S. Department of Agriculture tracks: colluding retailers trading cash for false SNAP-related transactions. If the retailer is complicit in the fraud, the photo won't make a difference.

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Theoretically, the measures introduced by Morgan and Messier could impact situations where someone sells the EBT card to another shopper for cash. Gregory Mills, one of the two researchers who wrote the Urban Institute policy brief, argued that this type of fraud seems unlikely to be a pervasive problem because it would mean selling off the card and giving away the personal identification number associated with the benefits. The hassle of replacing the card and ID number, he said, is a natural deterrent against this type of fraud.

For lawmakers evaluating an EBT photo requirement, the Urban Institute report pointed to Massachusetts as a case study of how the policy can go wrong. Political backlash from Massachusetts retailers, for example, persuaded lawmakers to make checking the photo voluntary, essentially eliminating any hope of catching fraudulent use of the EBT cards. When Massachusetts mailed its new cards with the photos, the state didn't take into account the transience of its SNAP population. More than 10,000 cards came back as undeliverable, leaving households with cards that no longer worked because they had been deactivated. In another implementation flub, the Massachusetts Department of Transitional Assistance did not provide written guidance to food retailers that if they asked for photo identification from SNAP customers -- but not non-SNAP customers -- they would be violating federal regulations.

From a fiduciary perspective, Mills at the Urban Institute said the policy almost certainly costs more than it would save in prevented fraud. Massachusetts set aside about $4.5 million annually to administer the new EBT cards with photos. Based on federal data, the institute estimates that at most, Massachusetts sees about $9 million in diverted benefits each year. For the photo-enhanced cards to be worth their cost, they would need to prevent more than half of all the SNAP-related fraud that occurs in a given year. Because of the logistical flaws in the policy, "an effect of this magnitude is highly implausible," the report concluded.

The administrative cost of the photo requirement is but one concern; the social cost to low-income households being incorrectly denied their legal benefits is another. Anti-hunger advocates in Rhode Island worry that the policy will cause confusion at the cash register, resulting in legal EBT cardholders being turned away at checkout. Sheila Brush, a member of the Rhode Island Food Policy Council, told lawmakers at a hearing last week that she worries problems will arise when another member of the household, not the beneficiary named on the card, tries to legally use the card.

Both Morgan and Messier said they were pessimistic about getting their bills passed this session. The assembly is spending most of its time focused on the budget and it's already late in the session. But Messier said she would keep introducing the bill in the hopes that eventually it will catch on. If so, it will be against the advice of the state's executive branch and the federal government. Rhode Island's director of human services submitted a letter last week to the general assembly citing "significant concerns" with Morgan's bill, mostly echoing points made in the Urban Institute report.

The U.S. Food Nutrition Services, which administers SNAP, hasn't weighed in on the current Rhode Island legislation, but in letters to Massachusetts, it has recommended against requiring photo ID on EBT cards. Not only is the policy fraught with logistical hurdles, the agency wrote, but federal data suggests that about 1.3 percent of annual SNAP benefits are diverted as a result of trafficking, down from 3.8 percent in 1993 before the use of EBT cards and their identification numbers. None of those arguments move Morgan, in part because she thinks fraud is more widespread than federal data suggests. "I'm not sure that they're vigorously looking for instances of fraud," she said. "If you don't look, you don't see."

J.B. Wogan is a Governing staff writer.
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