The facts are clear — the wireless Lifeline program is working.
The FCC’s proposed reforms include implementing third party eligibility verification and expanding support to include broadband. These proposed reforms will help reduce fraud and modernize the program, ensuring that low-income individuals have a Lifeline to opportunity, health, and security.
Participation in wireless Lifeline continues to be far below the level of Americans who qualify for the program.
According to the Universal Service Administrative Company, the Lifeline participation rate at the end of September 2015 was approximately 27%. This means that, while over 46 million households qualified for Lifeline benefits, only about 12.6 million households were enrolled in the program. Adding additional barriers to participation during the Lifeline modernization process will only further increase the number of low-income Americans who are unable to receive access to this basic need.
Although well-intended, the proposed addition of minimum voice service standards could make it too costly for carriers to provide Lifeline service without a mandatory copay. FCC pilot programs have shown that even a modest copay would drastically reduce program participation because many recipients cannot pay—either because they cannot afford the charge or they do not have bank accounts from which to pay the fee. A copay requirement would reduce program participation within the nation’s neediest populations and violate the mission of the program.
Limiting Lifeline eligibility to individuals enrolled in SNAP would decrease participation in the Lifeline program for individuals in need.
Many low-income Americans do not participate in SNAP (food stamps) but do participate in other programs that are reliable indicators of economic need, such as Medicaid. Eliminating reliable means to establish eligibility would needlessly prevent up to 4 million low-income families from participating in the Lifeline program.
Switching to a voucher system would place unnecessary burdens on Lifeline participants and lead to service disruptions. A voucher system would require Lifeline participants to redeem their benefits with a service provider regularly. This transaction requirement would be particularly burdensome for the elderly, persons with disabilities, and those residing in rural areas. The current system makes carriers responsible for redeeming the benefits on behalf of their customers, and they should continue to do so rather than shifting the burden and cost to consumers.
According to one provider of wireless Lifeline services, in December 2012 their customers in Georgia placed 5,904 calls to 9–1–1, 3,197 calls to law enforcement, and 15,085 calls to hospitals. That is over 780 calls to emergency service providers per day, in one state, from the customers of just one wireless Lifeline provider!
One survey found that 54% of Lifeline subscribers use the service to connect with doctors and for other health-related issues. Lifeline connects low-income Americans to emergency services, their health plan’s nurse help line, their doctors’ offices to arrange for appointments and follow-up, and preventative care text messages. The mobile health services that Lifeline provides are especially significant to underserved populations — including low-income older Americans, persons with disabilities, and Americans living in rural areas — who may be unable to access health care otherwise.
Mobile phones are essential to people seeking employment or balancing multiple jobs. A 2010 survey of 5,541 users conducted by one Lifeline provider found that about half of the users (49%) said the cell phone had improved their financial situation by helping them find or keep work. The study also demonstrated the value of the Lifeline program to retired and disabled individuals, with 39% of retirees and 38% of individuals with disabilities stating that the phone had helped improve their financial situation.
Nicholas P. Sullivan — fellow at the Tufts University Center for Emerging Market Enterprises — found in a 2011 study that, “If all Americans eligible for Lifeline Assistance (28.5 million in 2009) were to earn money with their cell phones at the same rate as those in our sample, that would equate to income gains of $3.7 billion for the poor and a large segment of the near poor.” In other words, the jobs-related benefits of wireless Lifeline more than double the original investment in the program.
An estimated 10-13% of current wireless Lifeline beneficiaries are veterans of U.S. military service. A substantial number of younger families with active duty military personnel also rely upon wireless Lifeline. The Lifeline program helps provide an essential need to individuals who have served or are currently serving our country.
Fewer than half of students in households with incomes below $15,000 have access to a computer at home. This trend has created a “homework gap,” placing students from low-income households at a disadvantage in school settings. Lifeline has the potential to fix this problem by adding Wi-Fi enabled smartphones to the program. This would allow children and others in low-income homes to use these devices to access Wi-Fi hotspots in public facilities that enable free broadband access, giving wireless Lifeline even greater value to more eligible families.
According to the executive director of the League of United Latin American Citizens (LULAC), “Whether the focus is jobs, health, or public safety, wireless Lifeline is critical to millions of low-income Hispanics. LULAC strongly believes that the program must be preserved with all the necessary regulations, particularly in light of the fact that eligible low-income Hispanics are under-enrolled in the federal program. Allowing greater numbers of Hispanics access to wireless Lifeline services could bolster employment rates among those communities. LULAC strongly supports maintaining a sustainable wireless Lifeline program so that low-income Hispanics and others can better their lives.”
In 2015, 76% of Lifeline subscribers qualified for Lifeline via SNAP (food stamps) or Medicaid. With 4.2 million low-income older Americans enrolled in SNAP and 4.6 million enrolled in Medicaid, large numbers of low-income older Americans are qualifying for essential Lifeline services via these reliable indicators of economic need. In fact, according to the executive director of the Alliance for Retired Americans, “A large number of older Americans on fixed incomes benefit from the wireless Lifeline program. It is their connection to health care, part-time work, needed community services, and law enforcement help.”
One wireless Lifeline provider estimated that 36% of the people it served have disabilities. For these Americans, a wireless Lifeline phone can be a critical connection to health care providers and others.
Along with Intel and the Howard University School of Medicine, TracFone—the largest provider of Lifeline wireless benefits—is partnering with the National Health IT Collaborative for the Underserved (NHIT) to support the “Advancing Health Equity through Precision Medicine Tools” Challenge. “Precision medicine” refers to the custom tailoring of medical treatment to the individual characteristics of each patient, including variability in genes, environment, and lifestyle for each person, rather than large groups of individuals.
The Lifeline program was established by the Reagan Administration in 1985 to provide discounted phone services to low-income Americans. The program was expanded by the George W. Bush Administration in 2005 to include wireless services. Typically, these involve a modest prepaid service requiring no deposit, which includes a free cell phone, free minutes, and free texting. This program provides a basic need that many low-income individuals would not have access to otherwise.
The Lifeline program was initiated by the Reagan Administration in 1985 and was expanded to include wireless services by the George W. Bush Administration in 2005.
Lifeline is not a part of the federal budget and isn’t funded by tax dollars. Instead, all telecommunications service providers contribute to the federal Universal Service Fund based on a percentage of their end-user telecommunications revenues. Eliminating the program would have no impact on reducing the deficit or debt, but it would needlessly hurt millions of people who turn to Lifeline to stay connected to their families, communities, and employers.
The Lifeline program only pays for phone service, not the actual phone. Instead, the telecommunications companies offering the wireless Lifeline service provide those phones at their own expense. The cost of providing the cell phone is not reimbursed by the Universal Service Fund.
Not all phone companies impose Universal Service Fund (USF) charges for wireless Lifeline on consumers.
Some subscribers may notice a “Universal Service” line item on their telephone bills. This appears when a company chooses to pass on its USF fees directly to its customers. The FCC does not require this charge to be passed on to customers.Instead, individual companies decide where and how to recover their USF costs.
Spending on the Lifeline program has declined since the FCC implemented program reforms in 2012. U.S. households currently spend an average of $2.50-$2.75 in total USF fees each month. Of that amount, less than a dollar a month goes to pay for wireless Lifeline.
Since the FCC implemented reforms in 2012, spending on the Lifeline program has continued to decrease, going from $2.1 billion in 2012, to $1.79 billion in 2013, to $1.66 billion in 2014. This is more than a 20% decrease since the FCC implemented its reforms in 2012.
In 2012, the Federal Communications Commission (FCC) instituted a complete program overhaul. Among other changes, the FCC created a National Lifeline Accountability Database to prevent multiple carriers from receiving support for the same subscriber, required providers to de-enroll wireless Lifeline subscribers who have not used the service for a consecutive 60-day period, mandated that providers annually verify the initial and continued eligibility of their subscribers, and implemented other enrollment safeguards. These reforms have already generated significant savings.
Online since January 2014, the National Lifeline Accountability Database is part of the FCC’s efforts to eliminate Lifeline fraud. So far, the database has eliminated nearly 270,000 duplicate subscriptions in 12 states, saving $33 million.
This step is supported by the Community Action Partnership, Consumer Action, Maryland CASH (Creating Assets, Savings and Hope) Campaign, the National Association of American Veterans, the National Consumers League, and the National Grange.