Proposed Poverty Calculation Would Make More People Ineligible for Medicaid

Stories that caught our attention this week

pencil erasing a line on white paper and redrawing it in a lower position

The Trump administration has requested public comment on possible changes to the way the federal poverty guideline is calculated, which could reduce access to important safety-net programs for millions of low-income Americans. Medicaid (Medi-Cal in California), the Children’s Health Insurance Program (CHIP), CalFresh, California’s Supplemental Nutrition Assistance Program, and Head Start are just some of the programs that use the poverty guideline to determine eligibility.

The current federal poverty guideline is an annual income of $25,750 for a family of four, and an income of $12,490 for a single person.Essential Coverage

In a blog post for the Georgetown University Center for Children and Families, research professor Edwin Park notes that “while this sounds like a highly technical change, it would do considerable harm.”

Dylan Matthews reports in Vox that the Office of Management and Budget is soliciting comments on different ways to change the inflation rate used to calculate annual updates to the poverty guideline. “The administration could certainly change the inflation measure in a way that makes more people eligible,” he writes, “but given its calls for spending cuts, it appears likely it’ll pick a measure that reduces eligibility.”

NPR’s Pam Fessler writes that one possible change “would involve adjusting the poverty line annually using a different inflation measure, one that would result in a slower increase over time.” Using this different measure of inflation, the poverty guideline would rise more slowly, making fewer Americans eligible for assistance from programs like Medicaid.

Park explains how this would work: “With smaller annual adjustments to the federal poverty line, the income eligibility limits for Medicaid and CHIP (e.g., the maximum allowable amount of income a family can earn for a household of that size) will be lower than they otherwise would be in any given year, with the reductions growing larger over time. In other words, the administration is effectively proposing to impose an automatic cut to eligibility, adversely affecting low-income children (as well as parents, pregnant women, seniors, and people with disabilities), with the magnitude of the cut becoming sharper each year.”

Additionally, the Center on Budget and Policy Priorities warns in a press statement that if the administration uses a lower inflation measure to adjust the poverty line, it would “reduce the Affordable Care Act’s (ACA’s) premium tax credits — and thereby increase the out-of-pocket premium changes faced by millions of people who purchase health insurance through the ACA marketplaces.”

Change in Poverty Guideline Would Affect Middle Class Families

This could be bad news for middle-income Americans who make too much to qualify for Medicaid but struggle to pay their share of monthly premiums for health plans purchased through ACA marketplaces. Californians could receive less in federal financial assistance to pay for health plans purchased through Covered California.

The administration published a notice soliciting public comments about the poverty calculation methods on May 7. It will accept public comments until June 21. Information about submission of comments can be found in the Federal Register.

What have you read about the possible changes to the way the federal poverty guideline is calculated? Tweet at me with #EssentialCoverage or email me.