Federal poverty guidelines fail to properly assess needs of seniors
February 26, 2008
4 min read
If you are elderly and live in California, how poor do you have to be to become eligible for public assistance?
Too poor, says a new report issued by the UCLA Center for Health Policy Research. The new Elder Economic Security Standard Index (Elder Index) for California, released today, shows that the federal poverty line (FPL), which is used to determine income eligibility for most public programs, takes into account less than half of the basic costs experienced by adults 65 and older in the state.
The FPL is also used to allocate state and federal resources to local communities. In 2007, the federal poverty guideline for a single elderly person (65 or older) was an annual income of $10,210; for an older couple, it was $13,690. But according to the UCLA report's calculations, which are broken down by each California county, the basic annual cost of living for a retired older adult in good health and living in rental housing averages $21,011, reaching a high of $27,550 in San Mateo County. For an older couple, the average is $30,537, with a high of $37,263 in San Mateo.
The report recommends that poverty guidelines be adjusted using the Elder Index to adequately reflect the current cost of living.
"Knowing the true cost of living for older adults is vital if we are to ensure that elder Californians can meet basic needs and maintain their independence," said Steven P. Wallace, a professor at the UCLA School of Public Health, associate director of the Center for Health Policy Research and lead author of the report. "The Elder Index is a new way to assess income adequacy for older adults that is designed to replace the federal poverty line in policy and practice."
"The Elder Index is a fact-based and comprehensive look at the expenses of elders," said Susie Smith, director of the California Elder Economic Security Initiative (Cal-EESI). "It provides an accurate tool for legislators to evaluate existing and future policy decisions, for direct service providers to assess their communities' needs and secure necessary funding, for advocates to better express their priorities, and for individuals to plan for retirement."
Located at the Insight Center for Community Economic Development, Cal-EESI is using the Elder Index as part of a statewide project to raise awareness and promote policies and programs that assure income adequacy for all older Californians.
The FPL, the official federal measure of poverty, is outdated, Wallace said. Developed four decades ago, and utilizing consumption surveys from the 1950s, the federal measure is based solely on the cost of the basic food budget needed to meet minimum nutritional requirements. Not only does the FPL fail to account for costs of housing and transportation, Wallace said, but it does not include medical costs, which can be particularly debilitating for the elderly. It also fails to account for the higher costs of living in California. The Elder Index, in contrast, provides a calculation of the basic cost of living for retired adults age 65 and older for every California county.
"The Elder Index for California takes into account the actual costs for housing, food, transportation, out-of-pocket medical expenses and other necessary spending," Wallace said.
The UCLA Center for Health Policy Research based its calculations using widely accepted and credible national and state data sources, such as the U.S. Census Bureau and the U.S. Department of Housing and Urban Development. Geographically relevant data was used for each county in California, reflecting local market rates for items such as housing, food and health care.
The policy brief, which will be presented at a legislative hearing in Sacramento on Feb. 27, was made possible by grants from several California foundations and aging agencies to the Insight Center for Community Economic Development and the UCLA Center for Health Policy Research. L. Cricel Molina, a graduate student researcher at the CHPR, was a co-author of the brief.
A county-by-county listing of the cost of living is in the full report, which can be found at www.healthpolicy.ucla.edu/elder_index08feb.html.
The UCLA Center for Health Policy Research is one of the nation's leading health policy research centers and the premier source of health policy information for California. Established in 1994, the UCLA Center for Health Policy Research is based at the UCLA School of Public Health (www.ph.ucla.edu) and is affiliated with the UCLA School of Public Health (www.sppsr.ucla.edu).