Emergency Food Stamps Program Ends, Cutting Benefits for 31 Million

Emergency Food Stamps Program Ends, Cutting Benefits for 31 Million

Congress gave the Supplemental Nutrition Assistance Program a big boost during the Covid-19 pandemic, helping millions of households avoid hunger and food shortages over the past three years. As of today, the temporary increase in SNAP benefits is coming to end, a move that will reduce the level of federal nutritional aid for millions of households.

There are roughly 42 million SNAP beneficiaries, and about 31 million of them are still receiving the pandemic-era emergency allotments. According to an analysis by the left-leaning Center on Budget and Policy Priorities, SNAP’s emergency allotments program was still operating last month in 32 states, as well as the District of Columbia, Guam and the U.S. Virgin Islands.

As of this month, the 16 million households receiving extra benefits will see a reduction in aid of at least $95 a month, with some households losing far more, CBPP says. On average, each person receiving benefits will see a cut of about $90 per month, which could add up to hundreds of dollars per month in larger households. Those qualifying for the minimum benefit, many of whom are elderly, will see the biggest cuts as monthly aid falls to as low as $23.

The cuts would be even larger if aid levels returned to pre-pandemic levels, but in 2022 the Department of Agriculture adjusted the baseline for the cost of a nutritionally adequate diet, adding $1.35 per person per day starting this year. Still, the new baseline of $6.10 per person per day allows for only $2 per meal, a level many nutritional experts say is too low.

The emergency allotments program kept 4.2 million people above the poverty line at the end of 2021, according to an estimate by the Urban Institute. The program reduced the poverty rate in participating states, as well, by 10 points overall and 14 points for children.

In recent months, the emergency allotments program cost about $3 billion per month, CBPP says.

Worries about a "hunger cliff:" Some advocates for the poor warn that the sudden reduction in food assistance will result in a sharp increase in hunger and food insecurity, especially at a time when inflation is raising the cost of everything from eggs to rent. They expect to see a greater strain on food pantries and other charities that serve low-income households — a pattern seen in the 18 states that ended their emergency allotments programs before March 1.

Zac Hall, senior vice president at the Food Bank for New York City, told The Hill that charities are in no position to make up for the full value of the reduction. "It’s $3 billion that we’re estimating will be lost nationally for 42 million people who rely on SNAP. And that’s not something that the collective food banks across the U.S. can cover," Hall said. "Folks may make some hard choices around seeking health care or paying their heat or light bills or rent or taking on more debt."

Ellen Vollinger of the nonprofit Food Research & Action Center told The New York Times that the cuts will reverberate down the social ladder, hitting hardest those who can afford it least. "This is a cost shift from the federal government," she said. "It just shifts the burden of hunger onto states and counties, to the charitable sector, but of course, most harshly, it shifts the burden to that household to try to make do with even less."

Eli Lilly Says It Will Slash Insulin Prices, Cap Monthly Costs at $35

Drug giant Eli Lilly said Wednesday that it will slash the price of its most commonly prescribed insulin products by 70% and expand a program capping diabetic patients’ out-of-pocket insulin costs at $35 a month.

The company, a leading manufacturer of insulin, has been under fire for its pricing of the drug, which is crucial for millions of diabetics. Years of repeated price hikes had left the drug unaffordable for many patients and forced many to ration their doses.

"It’s a big deal, and it’s time for other manufacturers to follow," President Joe Biden said.

Insulin costs about $10 a vial to manufacture. Lilly said it would cut the list price of its generic insulin to $25 a vial as of May and drop the list price of its Humalog-branded insulin by 70% as of the fourth quarter of the year, lowering it from about $275 a vial to $66.40. "That will still be more than triple the list price when Humalog was introduced in 1996," Rebecca Robbins of The New York Times notes.

Lilly said its $35 monthly price cap would take effect immediately. That cap matches one for seniors on Medicare enacted by Democrats as part of last year’s Inflation Reduction Act. That cap went into effect this year, but congressional Republicans blocked a measure that would have extended the cap to people covered by private insurance.

"The aggressive price cuts we're announcing today should make a real difference for Americans with diabetes," David A. Ricks, Lilly's chairman and CEO, said in a statement. "We are driving for change in repricing older insulins, but we know that 7 out of 10 Americans don't use Lilly insulin. We are calling on policymakers, employers and others to join us in making insulin more affordable."

Sen. Bernie Sanders (I-VT), chair of the Senate’s Health, Education, Labor, and Pensions Committee, applauded the public pressure campaigns that he said forced Eli Lilly to cut its prices after raising them by 1,200% since 1996. He joined Biden in calling on other major insulin makers to also cut their prices.

"This is what fighting back accomplishes," Sanders said. "At a time when Eli Lilly made over $7 billion in profits last year, public pressure forced them to reduce the price of insulin by 70 percent. Now is the time for Sanofi and Novo Nordisk to do the same. Now is the time to end the greed of the pharmaceutical industry and substantially lower the outrageous cost of prescription drugs in America."

Sanders said that he plans to introduce legislation to cap the price of insulin at $20 a vial.

Why it matters: The Times’s Robbins writes that Lilly’s move "marks at least a partial retreat for a company that has been a primary contributor to soaring prices for an injection that millions of Americans rely on to keep their blood sugar levels in check. It comes at a time of mounting political pressure on drug companies to rein in what lawmakers and other critics view as the industry’s pattern of abusive profiteering."

But Lilly’s moves will have limited impact, according to some experts, and the price cuts don’t apply to the company’s newer insulin products. Also, a price of $25 per vial, which Lilly said would be the lowest list-priced mealtime insulin available and less than the price of a Humalog vial in 1999, would still be higher than recent insulin prices in other comparable countries.

Quote of the Day

"In the next 10 years, we’ll pay $10 trillion just on interest. If you look at how much interest we have paid since 1940 ‘till today – $9 trillion."

– House Speaker Kevin McCarthy (R-CA), as quoted by The Hill, explaining in part why he is bringing in Congressional Budget Office Director Phillip Swagel to brief lawmakers next week on the federal budget outlook, which McCarthy said is now at a "crisis level."