Review of WIC Food Packages Improving Balance and Choice: Final Report (2017) / Chapter Skim
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10 The Regulatory Impact Analysis (Abridged)
10 The Regulatory Impact Analysis (Abridged)
Pages 395-442
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From page 395... ...
Estimated costs are based on forecasted program participation levels, estimated redemption of each food package item, and inflated prices of each food package item. Unless otherwise noted, cost differences describe how much more the revised food packages would save or cost across the program, compared to the current food packages.
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Cost Differences • Current food costs subtracted from the revised food costs -- Negative values (−) indicate that the revised food packages costs less than the current food packages.
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Food-cost estimates for both the current and revised food packages are projected through FY2022. This RIA, therefore, encompasses a 54-month period.3 1 WIC data sources used in this analysis include the participation data from the WIC Partici pant and Program Characteristics 2014: Food Package Report (USDA/FNS, 2016a)
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From page 398... ...
Accordingly, the phased-in cost differences between the current food packages and proposed revised food packages are 33.3 percent of the unadjusted cost differences for FY2018 (6 months) and FY2019 (12 months)
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3. Food package "N/A" is listed as a food package because it is included in an assumption about how participation is expected to change with the revised food packages.
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breastfed infants,b ages 1 to less than 4 months I-BF/FF-C Current, revised Partially (mostly) breastfed infants,b ages 4 to less than 6 months I-FF-A Current, revised Fully formula-fed infants, ages 0 to less than 4 months I-FF-B Current, revised Fully formula-fed infants, ages 4 to less than 6 months II II-BF Current, revised Fully breastfed infants, ages 6 to less than 12 months II-BF/FF Current, revised Partially breastfed infants, ages 6 to less than 12 months II-FF Current, revised Fully formula-fed infants, ages 6 to less than 12 months III IIIc Current, revised Infants, children, and women with a qualifying conditiond IV IV-A Current, revised Children, ages 1 to less than 2 years IV-B Current, revised Children, ages 2 to less than 5 years V V Current Pregnant women Partially (mostly)
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From page 401... ...
breastfeeding women,e up to 6 months postpartum VII VII Current, revised Fully breastfeeding women, up to 1 year postpartum N/A N/A Current, revised Partially (minimally) breastfeeding women, more than 6 months postpartume a Despite revised food packages I-BF/FF-A and I-BF/FF-B having the same maximum ("up to")
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From page 402... ...
one can of powdered identify need for issuance food package and create breastfeeding food and fully formula fed, infant formula) during the of formula beyond opportunities to support packages may slightly respectively, in the first first 30 days of life, on a 104 fl oz.
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may result in reduced receive less infant cereal recipients are prescribed of food package II. This State agencies currently infant cereal sales to under the revised food 24 oz of infant cereal per reduction helps offset authorize 8 oz infant cereal WIC participants.
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All other substitution are expected will improve Management but it may increase fresh, and fruits, in the absence food package II recipients to lead to an increase Information Systems frozen, and/or canned of definitive guidance on receive 128 oz of jarred in redemption, thereby efficiency by authorizing vegetables and fruits recommended intake. The infant food vegetables increasing costs to the the same vegetable and via the CVV.
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From page 405... ...
(Net cost effect: increase) Current rule: Because redemption of Implementation of the The revision may reduce The proposed revision Food package II-BF infant food meat is low, proposed revision will the amount of infant addresses participants' recipients are prescribed reducing the amount require training WIC food meat purchased feedback about the 77.5 oz of infant food prescribed is expected staff and participants by WIC participants.
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From page 406... ...
their nutrition needs, as determined by the participant's health care professional. Proposed revision: Participants with a qualifying condition in which a WIC formula is not medically necessary are still eligible to receive appropriate supplementary foods through food package III.
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From page 407... ...
Current rule: The proposed revisions The administrative burden The total amount of The proposed revisions Food package IV and VI would reduce the costs of is expected to be short milk purchased by WIC provide supplemental recipients are prescribed the food packages. This term, as the revision participants with their quantities of milk across 16 qt of milk per month.
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From page 408... ...
milk can be substituted Systems will need to be may be purchased by for 1 lb of cheese, with updated. WIC participants under the maximum amount the revised substitution of cheese being 1 lb options, as 1 and 2 qt for food packages IV, substitution options are V, and VI and 2 lb for allowed.
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From page 409... ...
Cheese is no longer offered as a separate food package item. Children and women can substitute up to 4 qt of milk per month, choosing either to substitute 2 qt of yogurt for 2 qt for milk or to substitute 1 lb of cheese and 1 qt of yogurt for 4 qt of milk.
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From page 410... ...
(Net cost effect: savings) Current rule: The proposed revisions The expanded list of The range of whole wheat WIC participants will Food packages V and VII are expected to decrease whole grain options bread sizes may lead to the benefit by allowing whole recipients are prescribed food package costs.
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Current rule: Addition of fish across Implementing the The proposed revision is Provision of water-packed Food package VII the food packages will proposed change will expected to increase the canned fish provides a recipients are prescribed increase food packages increase the short-term amount of water-packed high nutrient-density 30 oz of canned fish per costs. The additional administrative burden.
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From page 412... ...
Current rule: Reduction of the amount States and local agencies Sales of legumes and This change brings Food packages IV and VI of legumes and peanut will need to educate peanut butter to WIC children's and women's recipients have the option butter prescribed in food participants about the participants using their food packages in better of being prescribed 1 lb packages IV through legume and peanut butter food instrument will alignment with the dried legumes (or 64 oz of VII will result in a cost rotation patterns for decrease. Market effect is concept of supplemental canned legumes)
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Management Information Proposed revision: Systems will need to be Food package IV revised. recipients receive peanut butter, legumes, and canned fish in rotation over 3 months.
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The magnitude and even the direction of some of the cost differences can change with different assumptions that would still be considered reasonable. The cost effects of various different assumptions are evaluated in the "Uncertainties" section of this chapter and in Appendix U
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Phased-in Cost Differences Table 10-4 presents the phased-in cost differences between the current and revised food packages, from FY2018 through FY2022. Assuming phased-in implementation across the WIC program inherently decreases the projected total cost savings because, overall, the revised food packages result in a long-term cost savings.
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c Estimated costs for food package III only include standard issuance food package items, and does not account for exempt infant formula or WIC-eligible nutritionals. d Calculated by subtracting the current food package costs from the revised food package costs.
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FY = fiscal year. a Cost differences were calculated by subtracting the estimated food costs for the current food packages from the estimated food costs for the revised food packages.
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To arrive at cost differences, the proportion of food package V recipients categorized as pregnant and partially (mostly) breastfeeding were applied to the estimated costs of food package V for the current food packages to create estimates that could be compared to revised food package V-A and V-B, respectively.
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From page 419... ...
The estimated phased-in total food costs reflect assumptions about redemption, substitutions, prices, and program participation. c Cost differences were calculated by subtracting the estimated phased-in food costs for the current food packages from the estimated food costs for the revised food packages.
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Some of the variations in cost differences over time result from assumptions about participation. In FY2021 and FY2022, infant formula is projected to cost less and eggs are projected to cost slightly more in the revised food packages compared to the current food packages.
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a I • No revision leading to a major cost -- differenceb II • Infant vegetable and fruit redemption is +69 projected to increase with the addition of the CVV substitution option • Infant cereal is reduced −71 III • No revision leading to a major cost -- differencec IV-A • CVV is increased +107 • Canned fish is added to the food package +27 • Milkd is reduced −45 • Whole wheat breade is reduced −52 • Juice is reduced −116 IV-B • CVV is increased +246 • Canned fish is added to the food package +62 • Legumes and peanut butter are reduced −47 • Whole wheat breade is reduced −119 • Juice is reduced −264 V-A • CVV is increased +129 • Milkd is reduced −29 • Legumes and peanut butter are reduced −37 • Juice is reduced −84 V-B • CVV is increased +26 VI • CVV is increased +65 • Juice is reduced −109 VII • CVV is increased +200 • Cheesef is eliminated as its own food −46 package item NOTES: The committee defined a major total cost difference as a revision within a specific food package resulting in a total phased-in cost difference of at least $25 million over the course of FY2018 through FY2022. The major total cost differences not only reflect the specific revisions to the items and the quantity prescribed, but also the distribution of participants across the different food packages.
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Cost differences were calculated by subtracting the estimated cost for the current food package item from the estimated costs corresponding to the food item in the revised food package. Negative values (−)
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Phased-in Cost Differences of the Revised Food Packages Compared to Current Food Packages ($, millions) b Food Package Itema FY2018c,d FY2019d FY2020 FY2021 FY2022 Cash value voucher +36.5 +73.9 +224.1 +229.7 +215.2 Canned fish +5.0 +10.3 +31.6 +32.9 +33.7 Jarred infant vegetables and +3.6 +7.5 +22.9 +23.4 +24 fruits Eggs 0 0 0 +0.1 +0.1 Infant food meat −0.9 −1.8 −5.5 −5.6 −5.7 Breakfast cereal −1.0 −2.0 −6.2 −6.2 −6.3 Infant formula, postrebate 0 0 0 −20.5 −21.0 Cheesee −2.0 −4.2 −12.9 −13.2 −13.5 Infant cereal −3.5 −7.2 −22.0 −22.5 −23.0 Milk −3.9 −8.1 −24.7 −24.1 −24.7 Legumes and peanut butter −5.5 −11.3 −34.8 −35.6 −36.4 Whole wheat bread −6.8 −14.1 −43.4 −43.6 −44.6 Juice −27.9 −57.7 −176.9 −179.9 −184.2 NOTES: Phased-in estimates assume full implementation of the proposed revisions in state agencies serving one-third of all WIC participants as of April 1, 2018.
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. The participation estimates the committee derived from these data sources served as the basis for both the current and revised food package cost estimates that were used for the cost analysis presented in Chapter 7 and this chapter.
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As a result, the committee forecasts that the FY2022 participation levels will be 0.7 percent lower than the FY2015 levels. Anticipating a shift in fully formula fed mother–infant dyads under the proposed revisions Participation projections are identical between the current and proposed revised food packages, with one exception.
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From page 426... ...
It also decreases participant burden, as the benefit is provided in a round number and a consistent value TABLE 10-8 Inflation Assumption for Food Package Items Prescribed as a Fixed Quantity, FY2016–FY2022 Year Thrifty Food Plan (inflation rate) a FY2016b 1.026 FY2017b 1.020 FY2018 1.020 FY2019 1.021 FY2020 1.021 FY2021 1.023 FY2022 1.023 NOTES: The base year of this analysis is FY2015.
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indicates that the specific scenario costs more than the current food packages. The cost differences between the base assumption and each uncertainty scenario are also presented.
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results in an additional $355.5 million savings from FY2018 through FY2022, compared to the base assumptions in the primary analysis. This lower redemption assumption for the CVVs in the revised food packages results in a total cost savings of approximately $580 million over the course of FY2018 through FY2022, compared to the current food packages.
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indicate that the assumption scenario costs more than the current food packages. c Describes the increases or savings of the base assumption compared to the uncertainty scenario.
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b Describes the increases or savings of the base assumption or uncertainty scenario ("assumption scenario") compared to the current food packages.
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, the total cost savings of the revised food packages would increase by $145 million over the course of the FY2018 through FY2022, compared to the base assumption used in the primary analysis. This would result in an estimated $366 million in total savings compared to the current food packages.
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432 TABLE 10-11 Projected Phased-in Cost Difference of WIC Food Package Revisions, Changing the Maximum Amount of Formula in Food Packages I and II Phased-in Cost Differences of the Revised Food Packages Compared to Current Rule ($, millions) a Maximum Formula Total Cost Assumption, Amount Difference, FY2018 Scenario Change FY2018 FY2019 FY2020 FY2021 FY2022 Through FY2022 Base assumptionc Identical to current food −6.4 −14.8 −47.7 −65.0 −86.6 −220.4 packageb Uncertainty scenario 1c All I-BF/FF-A recipients −5.6 −13.1 −42.6 −58.8 −80.3 −200.5 prescribed maximum "up to" amount Cost difference of base assumption −0.8 −1.6 −5.1 −6.1 −6.3 −19.9 compared to uncertainty scenario 1d Base assumptionc Identical to current food −6.4 −14.8 −47.7 −65.0 −86.6 −220.4 packageb Uncertainty scenario 2c 95 percent of maximum −13.0 −28.5 −89.6 −105.9 −128.5 −365.5 "up to" amounts Cost difference of base assumption +6.6 +13.7 +41.9 +41.0 +41.9 +145.1 compared to uncertainty scenario 2d
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indicate that the assumption scenario costs more than the current food packages. d Describes the increases or savings of the base assumption compared to the uncertainty scenario.
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b Dyadic Shift Assumption, Percent Total Cost of Fully Formula Fed Difference, FY2018 Scenario Projected to Shifta FY2018 FY2019 FY2020 FY2021 FY2022 Through FY2022 Base assumptionc 5 −6.4 −14.8 −47.7 −65.0 −86.6 −220.4 Uncertainty scenario 1c 0 −6.4 −14.8 −47.7 −52.8 −74.0 −195.7 Cost difference of base assumption 0.0 0.0 0.0 −12.1 −12.5 −24.7 compared to uncertainty scenario 1d Base assumptionc 5 −6.4 −14.8 −47.7 −65.0 −86.6 −220.4 Uncertainty scenario 2c 3 −6.4 −14.8 −47.7 −60.1 −81.5 −210.6 Cost difference of base assumption 0.0 0.0 0.0 −4.9 −5.0 −9.9 compared to uncertainty scenario 2d Base assumptionc 5 −6.4 −14.8 −47.7 −65.0 −86.6 −220.4 Uncertainty scenario 3c 8 −6.4 −14.8 −47.7 −72.2 −94.1 −235.2 Cost difference of base assumption 0.0 0.0 0.0 +7.3 +-7.5 +14.8 compared to uncertainty scenario 3d Base assumptionc 5 −6.4 −14.8 −47.7 −65.0 −86.6 −220.4 Uncertainty scenario 4c 5 (only dyads <6 months −6.4 −14.8 −47.7 −57.5 −78.9 −205.30 postpartum) d Cost difference of base assumption 0.0 0.0 0.0 −7.5 −7.7 −15.1 compared to uncertainty scenario 4d
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c Describes the increases or savings of the base assumption or uncertainty scenario ("assumption scenario") compared to the current food packages.
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As with the uncertainty scenarios, the "primary analysis" refers to the set of base assumptions that led to a total phased-in cost savings of $220 million for the revised food packages compared to the current food packages, over the course of FY2018 through FY2022. For each alternative tested, the phased-in cost differences are presented.
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All other state agencies are assumed to implement the proposed revisions as of FY2020. b Describes the increases or savings of the base assumption or alternative compared to the current food packages.
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When 20 ounces of canned fish every 3 months is used in this pricing scenario, the revised food packages would cost $0.37 more per-participant per month than the current food packages. Alternative 2 shows that 10 ounces per month in the food packages would cost approximately $23 million more than the current food packages.
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Based on the assumptions in the primary analysis, the committee estimated the total value of WIC sales for each food item using the quantities in the current and revised food packages for FY2015.8 Figure 10-1 shows the estimated sales for each category prescribed in the current food package side-by-side with estimates for the revised package. Each food item represents the food-item category, which encompasses assumptions about substitutions and allowable options within that category (e.g., yogurt and cheese substitution are included in the milk category)
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From page 440... ...
The categories estimated to experience the largest changes in sales under the revised packages represent small shares of their respective total retail markets, and the committee expects minimal market impacts as a consequence of the revision to the food package. TABLE 10-14 Estimated Percent of the Market Attributed to WIC Sales, as Presented in the Interim Rule Regulatory Impact Analysis Estimated WIC Percent of the Market of the Interim Rule Food Packages Calendar Year 2005 WIC Food Item Assuming No Substitutions Assuming Full Substitution Formula 65.5 56.3 Beans 8.9 9.5 Peanut Butter 4.8 4.8 Milk 4.5 4.4 Adult Cereal 4.1 4.1 Juice 2.0 2.0 Vegetables and Fruits 2.7 2.7 Eggs 2.3 2.3 Cheese 2.0 2.0 Bread 0.5 0.6 Canned Fish 0.6 0.6 SOURCE: USDA/FNS, 2007.
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The projected cost effects of the revised food packages, compared to the current food packages, are contingent on the assumptions made in the analysis. Many of the key assumptions the committee tested maintained or increased the costs savings of the revised food packages.
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2016a. WIC participant and program characteristics 2014: Food package report.
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