Grandma is hungry

figure-11.pngAt a time when lawmakers in Washington are debating slashing Medicare funding, a report out this week shows the share of seniors living in poverty in North Carolina is much higher than originally realized. Statewide, more than 15 percent of residents 65 and older live below the poverty line when calculated under the Census Bureau’s supplemental poverty measurement, according to the report by the Kaiser Family Foundation. Previously, senior poverty was thought to be at 10 percent in North Carolina.

Nationwide, the share of seniors living in poverty is higher than the official poverty measure in every state. Under the supplemental poverty measure, which deducts health spending from income, poverty rates could increase if beneficiaries were required to pay higher cost sharing or premiums for Medicare.

As Congress debates various methods to reduce federal spending, it is important to keep in mind that Medicare and Social Security, in their current forms, are two of the most successful anti-poverty programs ever developed in this country. As lawmakers look to alter that model, the outcomes could be disastrous.

This report makes clear that many of the proposed reductions in Social Security benefits, such as imposing a slower rate of growth on benefits by using the chained Consumer Price Index in the cost-of-living update, would be expected to contribute to higher poverty rates among older seniors under both the supplemental and official measure over time These are changes our seniors can ill-afford.

Other key findings from the report:

  • About one in ten individuals ages 65 and older (9%) have incomes below the poverty level using the official measure, compared to about one in seven (15%)  hen using the supplemental measure (see Figure 1).  The difference between the measures is not as pronounced among non-elderly adults, and poverty rates among children are actually lower under the supplemental measure than they are under the official measure (although poverty rates are higher among children than seniors under both poverty measures, and considerably higher under the official poverty measure).
  • The share of elderly people with incomes under 200 percent of poverty is just over a third (34%) under the official measure, but nearly one-half (48%) under the supplemental measure.  Conversely, a smaller share of seniors has incomes above 400 percent of the poverty threshold under the supplemental measure than under the official measure (19% compared to 32%).