Kansans could lose coverage under federal proposal to change poverty measure

By Sheldon Weisgrau | June 11, 2019

As we focus on the fight to expand KanCare here in Kansas, it’s important that we not lose sight of activities at the federal level that will affect our efforts here at home. Recently, the Trump administration proposed a seemingly small technical change to the way the federal government measures poverty. The impact of this change, however, will be anything but small.

The proposal from the Office of Management and Budget (OMB) would modify the measure of inflation used to calculate the official definition of “poverty.” This definition is used to determine eligibility for Medicaid, the Supplemental Nutrition Assistance Program (SNAP or food stamps), Head Start and many other programs. Adopting a lower measure of inflation would mean the poverty level would rise at a slower rate, eventually resulting in fewer people qualifying for benefits.

Economists have long debated the best way to measure inflation. The administration’s proposal to use the “chained Consumer Price Index,” or “chained CPI,” rather than the standard CPI, is believed by some to be more accurate. Others disagree (for a more in-depth discussion of this issue and how CPI and chained CPI are calculated, see the links at the end of this blog).

Nevertheless, just reducing the inflation rate without reexamining the underlying formula used to calculate poverty, which has not been updated in nearly 60 years and no longer reflects the purchasing realities of low-income Americans, would not enhance the accuracy of the measure. Instead, it would result in an erosion of the number of people who are considered “poor” and reduce the number who qualify for various safety net programs.

Here in Kansas, that would mean that fewer Kansans would qualify for KanCare (and KanCare expansion). Subsidies and cost sharing for those who purchase private marketplace insurance coverage would be reduced. Assistance to seniors in making prescription drugs more affordable under Medicare would be slashed. Many other programs important to Kansans would be affected and the results would be damaging and far reaching.

The Alliance will be submitting comments on the proposal to urge OMB to refrain from adopting changes to the poverty measure that make it harder to qualify for assistance and do not reflect the realities of daily life for low-income Kansans. We urge our coalition partners to join us.

Additional Resources

The OMB notice of the proposed change can be found here. Instructions for submitting comments, which are due on June 21, are included in the notice.

A template for comments to OMB, prepared by Alliance partner Community Catalyst, can be found here.

Vox: Trump wants to change how poverty is calculated — to make fewer people eligible for benefits

Center on Budget and Policy Priorities: Poverty Line Proposal Would Cut Medicaid, Medicare, and Premium Tax Credits, Causing Millions to Lose or See Reduced Benefits Over Time

Sheldon Weisgrau is the Alliance for a Healthy Kansas’ Senior Policy Adviser. Contact Sheldon at sheldon@expandkancare.com.