The Biden administration has released a proposed rule that would allow low-income people to shop online for Women, Infants and Children (WIC) food benefits and scrap a current requirement that these food items must be purchased in person at brick-and-mortar stores to limit fraud.
The Department of Agriculture released the rule Tuesday and announced a few days earlier that it wanted to allow online shopping for WIC benefits to "improve customer experience."
The WIC program offers about $6 billion per year in grants to subsidize certain food purchases by low-income women who are pregnant or who have young children. For more than 20 years, WIC beneficiaries have had to use their vouchers in a store. Or if they have electronic benefits cards (EBT), they must appear in the store and enter a PIN to use the benefit.
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Jamie Hall, research fellow at the Heritage Foundation’s Center for Health and Welfare Policy, said that requirement is aimed at reducing fraud in the program, which has a fraud rate of 5-10%.
Hall said showing up in person is a fraud deterrent because it’s easier to notice if, for example, the same person comes in every day to buy food with WIC benefits using a different EBT card each day or buys more food than used by an average family.
"The current requirement to sign the WIC voucher or enter a PIN in the presence of the cashier was intended as a fraud prevention measure," he said.
Allowing online purchases will make it easier for WIC purchases to be rerouted and possibly used by non-WIC participants or resold. Hall said there’s nothing in the new proposed rule to address the likelihood of greater fraud.
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"In fact, the entire 129-page USDA proposal never uses the word ‘fraud’ even once," Hall said. "I would argue that USDA has not given sufficient consideration to fraud prevention and that it would be better to keep the standards within a rule and subject to public notice and comment rather than to allow them to move them into a technical guidance document that they can change as they see fit."
Hall said USDA could have included language requiring WIC food purchases online to be sent only to the address of the purchaser, for example. But the rule includes no such language.
Hall added that, during COVID, many states allowed WIC supplies to be bought without being present in a store and said these states were supposed to report back on how that process worked and whether it increased opportunities for fraud. But he said none did, and USDA appears to have written its rule without considering this potential problem.
The USDA rule makes only one vague reference to ensuring accountability in a new system that allows for online purchases. It says the change would give states the flexibility to offer online shopping to WIC users "in a way that maintains program integrity."
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The USDA said the change is needed because of the way shopping has changed and said it would help more people use their WIC benefits.
The current requirements that WIC users must show up at a store "present challenges to families, particularly those with limited mobility or access to transportation, those who live in remote or rural communities and/or those with special dietary needs who require supplemental food substitutions that may not be readily available at the closest WIC-authorized grocery store."
While the rule ignores the possibility of fraud, it does acknowledge that more money would need to be spent on the program since online shopping is generally more expensive.
"The Department estimates that allowing WIC online shopping will increase Federal WIC food spending, in the form of transfers, by a total of $392 million over 5 years," the rule said. "This is driven by an understanding that shoppers typically pay higher prices for online groceries and an expectation that online shopping would moderately increase WIC benefit redemption by making the WIC shopping experience more convenient for some participants."