Census Shows Poverty Down, Median Income Up, Uninsured Rate Flat

Analysts weighed in on U.S. Census Bureau data on poverty and health insurance released Wednesday, observing a steady downward trend in the official poverty measure, an upward trend in median income and a rate of uninsured individuals statistically the same as last year.

According to the bureau, the nation’s official poverty rate in 2017 was 12.3 percent, with 39.7 million people in poverty, compared to 12.7 percent in 2016 -- the third consecutive annual decline in poverty.

Median household income in 2017 was $61,372, an increase in real terms of 1.8 percent from the 2016 median income of $60,309, the third consecutive annual increase in median household income.

The percentage of people without health insurance coverage for the entire 2017 calendar year was 8.8 percent, or 28.5 million individuals, compared to 8.8 percent in 2016, or 28.1 million individuals.

Robert Greenstein and Jared Bernstein, of the Washington-based Center on Budget and Policy Priorities (CBPP), said the increases in the official poverty rate and median household income are good, but could be better, observing that the rate of increase has slowed from previous years.

Though the United States’ median income was the highest ever recorded in 2017, Bernstein said, “That’s not as unique of an achievement as it sounds.” Because of the effect of inflation, he said, similar such records have been posted several times in the past 20 years.

“In real terms, median income and poverty look about where they were at the pre-recession peak in 2007,” Bernstein said.

In addition, income inequality continues to grow, CBPP said. While the average American income has grown by 1.6 percent, the incomes of the top five percent of American earners has grown by about twice as much – three percent – according to the center. Bernstein said income inequality has been exacerbated by recent federal tax cuts, some of which cut taxes for large corporations and high-income earners. So while growth is reaching middle- and low-income earners, that growth is being limited by the high growth for high-income earners, he said.

“The macro economy is pushing in a positive direction, but income inequality is limiting that growth,” Bernstein said.

The analysts also called the “stalled uninsured rate” a troubling result of “Trump administration actions to place obstacles in the way of successful Affordable Care Act (ACA) implementation,” such as decreasing consumer outreach funding and shortening the enrollment window.

Census data showed a sharp decline in the number of uninsured individuals following initial passage of the ACA, and a slower decline in subsequent years. For example, in 2015 the percentage of individuals without any health insurance for the entire year was 9.1 percent, which dropped only 0.3 percentage points to 8.8 percent in 2016. Greenstein said that even though the declining number of uninsured individuals began to slow down in the final years of the Obama administration, he would have expected some decrease in the uninsured rate to continue if Obama-era policies had continued, rather than the flat rate that was observed from 2016 to 2017.

Greenstein added that the Trump administration’s decision to allow more short-term health insurance plans could have a cascading effect that increases the number of uninsured individuals in the future. He said that allowing short-term health insurance will move young, healthy people off the exchange, making premiums go up on the exchange, thus pricing middle-income earners with unsubsidized insurance plans out of the exchange and increasing the number of uninsured individuals.

Medicaid expansion states -- of which Ohio is one -- showed far lower rates of uninsured individuals than non-expansion states, with expansion states posting an average 6.6 percent uninsured rate, compared to the 12.2 percent average uninsured rate for non-expansion states. Bernstein said gaps in coverage between expansion and non-expansion states have been growing for the past four years.

Most uninsured individuals (84.6 percent) were working age adults, and of that group, one-in-four were between the ages of 26 and 34, while one-in-five were between the ages of 34 and 44. People in southern states, individuals in the service industry and less-educated individuals were the most likely to be uninsured.

Ohio posted a 6.0 percent uninsured rate in 2017, up slightly from 5.6 percent in 2016.

CBPP also drew attention to the supplemental poverty measure (SPM), an alternative measure of poverty that incorporates various forms of government assistance into an individual’s income. If an individual’s income is below the SPM poverty line before the incorporation of government assistance, but over the poverty line after the incorporation of government assistance, that individual is considered “lifted out of poverty” by that program.

According to an analysis by CPBB Senior Fellow and Director Arloc Sherman, the Supplemental Nutrition Assistance Program (SNAP) lifted 3.4 million people above the SPM poverty line ($27,005 for a typical two-adult, two-child renter family); the Earned Income Tax Credit (EITC) and the low-income portion of the Child Tax Credit together lifted 8.3 million people out of poverty; Social Security lifted 27.0 million people out of poverty, including 17.7 million seniors; Supplemental Security Income (SSI) lifted 3.2 million people out of poverty; rent subsidies lifted 2.9 million people out of poverty; and Temporary Assistance for Needy Families (TANF) and state General Assistance programs lifted 544,000 people out of poverty.

As such, Sherman said the data spoke to the effectiveness of those programs, and he decried planned actions by the Trump administration and Congress to cut funding to some of those programs in the 2019 budget.

Story originally published in The Hannah Report on September 13, 2018.  Copyright 2018 Hannah News Service, Inc.