S. E. Williams
And the potential impact of Medicaid Block Grants on the poor
In January, the California Budget and Policy Center reported on the poverty trends in the state. It compared the years 2007 and 2015 and noted significant differences in poverty rates among the counties—in many counties, the rate of poverty is now more widespread.
After six years of recovery from the Great Recession, poverty rates in the counties ranged from 7.1 percent to 27.6 percent. The poverty rate among children in some areas was as high as 38.5 percent. An indicated child poverty rates above 20 percent.
When 2015 poverty levels were compared with data from 2007, it revealed that in 2015, poverty was more widespread in 30 out of the 40 counties in the state for which data were available, with notable concentrations in the Inland Empire and the Central Valley.
Last September, the Supplemental Poverty Measure or SPM (a different poverty measure that considers the lack of economic resources for consumption of basic needs such as food, housing, clothing, and utilities) showed that nearly eight million Californians, or one in every five of the state’s residents (20.6 percent), on average could not adequately support themselves and their families between 2013 and 2015. California also stood out as having the highest poverty rate in the nation based on this measure.
According to SPM, Black and Latino children are about three times as likely as white children to live in poverty. Nearly one-third of Black children (31.0 percent) lived in poverty in 2015, as did more than 1 in 4 Latino children (28.5 percent), compared to only 1 in 10 White children (10.3 percent). If the official poverty rate for Black and Latino children were equal to that of White children, nearly 950,000 fewer California children would live in poverty, and the state’s child poverty rate would be cut in half.
The Brookings Institution reported recently that nearly every California congressional district was more economically distressed in recent years than in 2000 and those hit the hardest tended to be those in inland, suburban areas. In addition, growth in the number of people living in poverty far outpaced overall population gains in most districts.
For example, between 2000 and 2010 to 2014, the number of people who faced severe economic hardship more than doubled, rising by 112 percent in Congressional District 42, which includes suburban communities in Riverside County. Although District 42 experienced the greatest population gains in California during this period (the number of district residents rose by about three-quarters), according to the California Budget and Policy Center (CBPC), the increase in the number of residents living in poverty far exceeded the areas growth in the overall population.
The measure of poverty in the Inland Empire and other California communities led the CBPC to recommend that the 115th Congress prioritize policy issues that could improve the economic well-being of these communities; however, it is quite possible the nation may be pushed in a different direction.
As the Senate continues to work through the process of confirming the President’s cabinet members; the House of Representatives works to dismantle the Affordable Care Act; and many in the press, the nation and the White House are riveted to unfolding details related to Russia’s alleged involvement in the 2016 Presidential campaign—one promise made by Trump the candidate and undertaken by President Trump’s administration is an intent to turn Medicaid into a block grant program—a promise that could have devastating consequences in communities with high rates of poverty like many in the inland region.
Converting Medicaid to a block grant would change the program from a guaranteed benefit for low-income Americans (including children) and people with disabilities and the elderly to an annual lump sum payment made to states. Such grants are not tied to the need for services so if the number of people in need is increased year over year, the block grant would not adjust to meet the rising demand.
Medicaid is more than a health insurance program. It is the primary source of funding for a myriad of services for those who qualify. For the disabled and elderly, it is designed to help keep people in their homes and independent. It does so by providing the funding for in-home health services and skilled nursing, as warranted, for the elderly and disabled.
The Medicaid program also requires the federal government to match every dollar spent by the states on Medicaid services. This approach to service provides states with opportunities to invest in programs aimed at broadening the availability of the kinds of services it can provide.
With the implementation of block grants for Medicaid, guaranteed matching funds will be lost. This could severely limit the ability of states like California and others to sustain existing services and makes their ability to expand services almost impossible.
Since Medicaid’s implementation more than fifty years ago, it has been open-ended. This means for example, if there were more people eligible for Medicaid due to a recession or if costs increase due to expensive new medications, etc. in a given year, the state receives addition federal dollars.
If Medicaid becomes a block grant and the federal government no longer plays a key role in it, there is growing concern the nation’s elderly and disabled will also be at greater risk of not being able to remain in their homes.
Thresholds for poverty status are determined and adjusted annually. It is based on income, family size, and age of householder. In 2016, the official poverty level for a family of three was $ 20,160.
The California Budget and Policy Center was established in 1995 to provide Californians with a source of expertise on state fiscal and economic policy issues. To learn more about the CBPC and its work, visit calbudgetcenter.org.
Tables & Graph courtesy of calbudgetcenter.org