To qualify for some federal programs targeted at low-income individuals and families, applicants must not only have countable income below specified limits but must also meet resource tests--limits on savings and other assets. Resource tests disqualify many applicants whose income would otherwise make them eligible for federal assistance. Requirements that applicants exhaust most of their assets before receiving help prevent young people from building savings for a secure retirement and leave older people without savings to cushion against even a minor adverse event. In addition, requiring applicants to gather the information necessary to evaluate their resources complicates the eligibility determination process and may deter even eligible people from applying. The process is further complicated by the fact that different programs have different rules, and a single program may have different limits or different ways of counting assets in different states. This report uses data from the Survey of Income and Program Participation (SIPP) to analyze the effects of resource tests on eligibility for four programs: (1) The Supplemental Nutrition Assistance Program (SNAP, formerly Food Stamps); (2) Supplemental Security Income (SSI), which provides cash assistance to low-income aged and disabled people; (3) Medicare Savings Programs (MSPs), under which Medicaid pays Medicare premiums and sometimes reduces required cost-sharing for low-income beneficiaries; (4) The Low-Income Subsidy (LIS) Program under the Medicare Part D prescription drug benefit, which pays some or all of participants' premiums and reduces required cost-sharing The report begins with an overview of the income and resource requirements for the four programs and their different resource methodologies--i.e., ways of counting assets subject to resource limits. It then provides estimates of the number of people who met income and other requirements for participation in one or more of these programs in 2005 but who failed to meet a resource test. Finally, it examines the effects of some possible changes, including higher resource limits and different rules for treating specific kinds of assets (excluding retirement savings, excluding the cash value of life insurance, excluding all vehicles, annuitizing retirement funds, or using a net worth standard).
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