Revised Poverty Line Could Endanger Millions, AAFP Warns

Academy Objects to Proposed New Standard Reducing Medicaid Eligibility

July 02, 2019 03:39 pm News Staff

A proposed recalibration of the federal government's poverty line would jeopardize much of the health care provided in the United States, particularly that for children, older adults and pregnant women, the Academy recently warned the Office of Management and Budget.

[woman looking for money in wallet]

"The AAFP strongly opposes any changes to the federal government's definition of poverty that reduce eligibility for Medicaid, the Supplemental Nutrition Assistance Program and other federal programs on which many low-income Americans depend," said the Academy's June 19 letter.(2 page PDF)

The correspondence, which was signed by Board Chair Michael Munger, M.D., of Overland Park, Kan., came in response to a request for comment(www.govinfo.gov) on consumer inflation measures produced by federal statistical agencies that was published in the May 7 Federal Register.

Specifically, the OMB sought feedback on the differences among various consumer price indexes and how those differences might influence the estimation of the official poverty measure.

The wording of the agency's request has been widely interpreted(www.bloomberg.com) as indicating that the Trump administration will seek to replace the current statistical measure, the consumer price index for all urban consumers, with what's known as the "chained CPI,"(www.bls.gov) which controls for how people change their spending habits to lessen the impact of inflation. The latter calculation, already substituted(www.brookings.edu) for CPI-U in the Tax Cuts and Jobs Act of 2017, would slow the increase of benefits by assuming that consumers respond to inflation by substituting less-expensive items for those that become too pricy.

The Academy expressed concern that "changes to the poverty thresholds, including how they are updated for inflation over time, may affect eligibility for programs that use the poverty guidelines."

Such a change, the AAFP said, "would result in more individuals losing coverage or seeing a reduction in benefits" -- a result at odds with the positive impact(www.kff.org) of increased access to Medicaid under the Patient Protection and Affordable Care Act.

During the past two decades, policies implemented within the existing poverty measure framework, including CHIP and the ACA, "have extended access to affordable health care coverage to millions of previously uninsured, non-Medicare eligible adults and children," the letter said, leading in 2016 to a historic low of 8.8%(www.census.gov) of people who were uninsured for the entire year.

But a Center on Budget and Policy Priorities analysis(www.cbpp.org) the Academy cited cautions that a lower inflation measure to calculate annual adjustments to the federal poverty line "ultimately would cut billions of dollars from these federal health programs and cause millions of people to lose eligibility or (have) reduced access (to the) programs."

The analysis predicted the following results after a decade of this new definition:

  • More than 250,000 seniors and people with disabilities would lose their eligibility for, or receive less help from, Medicare's Part D Low-Income Subsidy Program, increasing both their premiums and their out-of-pocket costs for prescription drugs.
  • Some 150,000 seniors and people with disabilities would lose help paying for Medicare premiums, exposing them to costs of $1,500 a year to maintain Medicare physician coverage.
  • More than 300,000 children would lose comprehensive coverage through Medicaid and CHIP, as would some pregnant women.
  • More than 250,000 adults who gained Medicaid coverage from the ACA expansion would lose it.
  • More than 150,000 consumers who buy coverage through the ACA marketplaces would see their deductibles go up by hundreds -- even thousands -- of dollars because they would lose eligibility for or qualify only for reduced cost-sharing assistance.

The Academy urged the administration to consider the complex and far-reaching health effects of poverty on family physicians' patients and to carefully consult a comprehensive AAFP position paper on poverty and health as it contemplates further policy changes.

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