Medicare Prescription Drug Proposals: Estimates of Aged Beneficiaries Who Fall Below Income Criteria, by State

Medicare Prescription Drug Proposals: Estimates of Aged Beneficiaries Who Fall Below Income Criteria, by State

Order Code RL31736
Report for Congress
Received through the CRS Web
Medicare Prescription Drug Proposals:
Estimates of Aged Beneficiaries Who
Fall Below Income Criteria, by State
February 11, 2003
Chris L. Peterson, Paulette C. Morgan
Analysts in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

Medicare Prescription Drug Proposals:
Estimates of Aged Beneficiaries
Who Fall Below Income Criteria, by State
Summary
Medicare, the nationwide health insurance program for the aged and disabled,
does not cover most outpatient prescription drugs. To address this gap in the
Medicare benefit, proposals in both the House and the Senate in the 107th Congress
would have covered at least a portion of beneficiaries’ prescription drug costs. The
bills included additional assistance for low-income beneficiaries. The assistance
would have been in the form of reduced, subsidized or eliminated premiums,
deductibles and other cost-sharing. Proposals in the 108th Congress will probably
also include some of these features for low-income beneficiaries.
Eligibility for assistance under these proposals was tied to beneficiaries’ income
and, in some of the bills, also to their assets, or “resources.” The proposals would
have provided various levels of assistance to beneficiaries with incomes below 100%,
135%, 150%, 175% and 200% of the federal poverty guideline. However, not all of
a beneficiary’s income is included in this calculation. The bills specified that income
is to be counted as it is for determining eligibility for Supplemental Security Income
(SSI), which excludes certain amounts and types of income. The following analysis
approximates, by state, the percentage and number of aged noninstitutionalized
Medicare beneficiaries who meet the income requirements of these proposals based
on beneficiaries’ income as counted for SSI eligibility purposes.
Average state-level estimates of the proportion of aged noninstitutionalized
Medicare beneficiaries with incomes below the bills’ specified levels were calculated
using the Current Population Survey (CPS). Besides providing capabilities for state-
level estimates, the survey obtains income information detailed enough to exclude
the amounts and types of income as proscribed for SSI eligibility. Unfortunately,
because the CPS does not provide information on assets, it is not possible to estimate
the proportion of seniors who may be ineligible for assistance because of their assets
even though they may fall below an income threshold.
Most of the major Medicare prescription drug bills of the 107th Congress would
have covered all of the cost-sharing and generally all of the premiums for
beneficiaries with incomes up to either 135% or 150% of the federal poverty level.
Over the 3 years from 1999 to 2001, an estimated 28% of aged noninstitutionalized
Medicare beneficiaries had countable income below 135% of poverty. The results
by state vary widely. The average percentage of aged noninstitutionalized
beneficiaries with countable income below 135% of poverty ranged from 18% in
Wisconsin to 43% in Mississippi. More than one in three aged noninstitutionalized
Medicare beneficiaries (34%) had countable income below 150% of poverty. These
estimates are based on survey data and must be interpreted with caution.

Contents
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Activities of the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Estimates by State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Sources and Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Source of Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Income Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Poverty Defined . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Estimation Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
List of Tables
Table 1. Low-Income Provisions of Selected Medicare Prescription Drug Bills
of the 107th Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 2. Estimated Average Percentage and Number of Aged Medicare
Beneficiaries with Incomes Below Specified Levels of the Federal
Poverty Guidelines, by State, 1999-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. High and Low Estimated Average Percentages of Aged
Medicare Beneficiaries with Incomes Below Specified Levels of the
Federal Poverty Guidelines, by State, 1999-2001 . . . . . . . . . . . . . . . . . . . . 10
Table 4. High and Low Estimated Average Number of Aged Medicare
Beneficiaries with Incomes Below Specified Levels of the Federal
Poverty Guidelines, by State, 1999-2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Medicare Prescription Drug Proposals:
Estimates of Aged Beneficiaries Who Fall
Below Income Criteria, by State
Background
Medicare, the nationwide health insurance program for 41 million aged (65 and
older) and disabled individuals, does not cover most outpatient prescription drugs.
To address this gap in the Medicare benefit, proposals in both the House and the
Senate in the 107th Congress would have covered at least a portion of beneficiaries’
prescription drug costs.1 The bills included additional assistance for low-income
beneficiaries. The assistance would have been in the form of reduced, subsidized or
eliminated premiums, deductibles and other cost-sharing. Proposals in the 108th
Congress will probably also include some of these features for low-income
beneficiaries.
Eligibility for assistance under these proposals was tied to beneficiaries’ income
and, in some of the bills, also to their assets, or “resources.” The proposals would
have provided various levels of assistance to beneficiaries with incomes below 100%,
135%, 150%, 175% and 200% of the federal poverty guideline. However, not all of
a beneficiary’s income is included in this calculation. The bills specified that income
is to be counted as it is for determining eligibility for Supplemental Security Income
(SSI), which excludes certain amounts and types of income. The following analysis
approximates, by state, the percentage and number of aged noninstitutionalized
Medicare beneficiaries who meet the income requirements of these proposals based
on beneficiaries’ income as counted for SSI eligibility purposes. The asset (or
“resource”) requirements included in some proposals were not factored into the
analysis. This analysis relies on a 3-year average of self-reported income from
national survey data covering 1999-2001.
In this report, beneficiaries’ income is compared to the federal poverty
guidelines. The poverty guidelines are published by the Department of Health and
Human Services (HHS) and are used for program eligibility purposes. For Medicare
beneficiaries in particular, the poverty guidelines are used to determine beneficiaries’
eligibility as Qualified Medicare Beneficiaries (QMBs) or Specified Low-income
Medicare Beneficiaries (SLMBs), both of which entitle beneficiaries to additional
assistance for cost-sharing and premiums. The low-income provisions of the
Medicare prescription drug bills in the 107th Congress were typically linked to these
programs’ definitions of income and therefore also use the federal poverty guidelines
1 See CRS Report RL31496, Medicare: Major Prescription Drug Provisions in Selected
Bills.

CRS-2
for determining eligibility.2 This is discussed in greater detail in the Sources and
Limitations section of this report.
Activities of the 107th Congress
Under the House-passed plan (H.R. 4954, introduced by Representative Nancy
Johnson), beneficiaries with countable income3 below 175% of the federal poverty
guideline and countable resources of less than $4,000 (or $6,000 per couple) would
have received assistance with their premiums and cost-sharing. These beneficiaries
would have had their cost-sharing reduced such that they would have been required
to pay no more than $2 per prescription for a multiple source or generic drug and no
more than $5 for a non-preferred brand-name drug. Qualifying beneficiaries with
countable income below 150% of poverty would have received a premium subsidy
to cover the value of standard drug coverage provided by the beneficiary’s plan; if the
enrollee had chosen a higher-value plan, no subsidy would have been provided for
additional costs. For those with countable income between 150% and 175% of
poverty, the premium subsidy would have been reduced as income rose; there would
have been no subsidy at 175% of poverty or above.
Under the Medicare Rx Drug Benefit and Discount Act of 2002 (H.R. 5019,
introduced by Representative Charles Rangel), all premiums and cost-sharing would
have been paid for beneficiaries with countable income less than 150% of poverty
and up to $4,000 in countable resources, or $6,000 per couple. For beneficiaries
below the countable-resources limit but with countable income between 150% and
175% of poverty, the premium subsidy would have been reduced on a sliding scale,
although Medicaid would still have covered all cost-sharing.
The Senate bill known as the “tripartisan” bill (21st Century Medicare Act, S.
2729, introduced by Senator Charles Grassley) would have provided full premium
subsidies for those with countable income below 135% of poverty, if the beneficiary
chose a private prescription-drug plan at or below the national weighted average. If
such a plan were not available, the subsidy would have covered the least expensive
plan in the area. To qualify, beneficiaries would also have been limited to $4,000 of
countable resources, or $6,000 per couple.
Under the tripartisan plan, beneficiaries would still have paid some out-of-
pocket expenses toward the deductible and coinsurance. For qualifying low-income
beneficiaries, the annual deductible ($250 for 2005, for standard coverage) would
have been reduced to 5% of the plan’s usual amount (in this case, $12.50). For the
plan’s coverage for drug expenditures between the deductible and the initial coverage
limit (that is, between $250 and $3,450 for 2005, for standard coverage), the
coinsurance for qualifying low-income beneficiaries would have been reduced to
2 For 2003, the poverty guidelines in the 48 contiguous states and the District of Columbia
were $8,980 for one person and $12,120 for a family of two. For this report, when a
percentage is given as a “percent of poverty” or as a “percent of the poverty level,” this
refers to the federal poverty guideline.
3 That is, income as counted under eligibility guidelines for Supplemental Security Income
(SSI), which is described in detail in the Source and Limitations section of this report.

CRS-3
2.5% from 50%. For the range of spending in which the beneficiary would generally
be responsible for all costs (that is, between the initial coverage limit and the stop-
loss amount), qualifying low-income beneficiaries would have been responsible for
only half of the costs. Above the stop-loss limit ($3,700 in out-of-pocket spending,
which includes amounts paid under the low-income subsidy), qualifying low-income
beneficiaries would have paid none of the costs, rather than the typical 10%.
Eligibility for the premium subsidies and cost-sharing assistance also would have
required countable resources of no more than $4,000, or $6,000 per couple. For
those who would have qualified because of their assets but had income between
135% and 150% of poverty, sliding-scale premium subsidies would have been
provided. The only cost-sharing assistance they would have received would have
been the 50% reduction of out-of-pocket payments for spending between the initial
coverage limit and the stop-loss amount.
Two amendments for adding a prescription drug benefit to Medicare were
offered by Senator Bob Graham to S. 812 (Greater Access to Affordable
Pharmaceuticals Act of 2002). Neither of the amendments considered countable
resources as a factor in eligibility for assistance. Under S.Amdt. 4309 (known as the
Graham Amendment), beneficiaries would have paid nothing for the premium of the
new prescription drug benefit if their countable income was under 135% of poverty,
with a sliding scale subsidy up to 150% of poverty. All cost-sharing (e.g.,
deductibles and copayments) would also have been covered for those with countable
income under 135% of poverty. Under S.Amdt. 4345 (known as the Graham-Smith
Amendment), beneficiaries’ enrollment fees would have been paid by the
government if their countable income was less than 200% of poverty. Also, they
would have paid no more than $2 for a generic drug and no more than $5 for a brand-
name drug.
The low-income provisions of the selected Medicare prescription drug bills of
the 107th Congress are summarized in Table 1.

CRS-4
Table 1. Low-Income Provisions of Selected Medicare
Prescription Drug Bills of the 107th Congress
Countable income
Countable
limit and scope
assets
Bill
of assistance
limit
H.R. 4954
0%-<150% FPL: Premium subsidy set at 100% of standard
drug coverage
Less than $4,000,
or $6,000 for
150%-<175% FPL: Sliding-scale premium subsidy
couples
For both categories, <$2 multi-source, generic copay, <$5
nonpreferred brand; no deductible; no coverage for costs
between initial coverage limit and out-of-pocket maximum
H.R. 5019
0%-<150% FPL: All premiums and cost-sharing
Less than $4,000,
or $6,000 for
150%-<175% FPL: All cost-sharing; sliding-scale
couples
premium subsidy
S. 2729
0%-<135% FPL: Premium subsidy set at 100% of national
weighted average premium or, if no plan is available at this
price, set at lowest cost plan. Deductible reduced to 5% of
Less than $4,000,
plan’s usual amount. Beneficiary’s coinsurance reduced to
or $6,000 for
2.5% from 50% for first tier (between deductible and initial
couples
coverage limit). Beneficiary’s coinsurance reduced to 50%
from 100% for second tier (between initial coverage limit
and stop-loss amount). Beneficiary’s coinsurance above
stop-loss amount reduced to 0% from 10%.
135%-150% FPL: Sliding-scale premium subsidy.
Beneficiary’s coinsurance reduced to 50% from 100% for
second tier.
S.Amdt. 4309 0%-<135% FPL: All premiums, cost-sharing
No assets test
135%-<150% FPL: Sliding-scale premium subsidy
S.Amdt. 4345 0%-<200% FPL: Enrollment fee covered; <$2 generic
No assets test
copay, <$5 brand name copay
Note: FPL is federal poverty level.

CRS-5
Estimates by State
To qualify for low-income assistance benefits under the major Medicare
prescription drug proposals of the 107th Congress, beneficiaries’ countable income
had to be below 135%, 150%, 175% or 200% of the federal poverty guideline. Table
2 shows estimates of the percentage of noninstitutionalized aged Medicare
beneficiaries (hereafter referred to as “beneficiaries”) in each of these categories, for
each state. Table 2 also includes the percentage of beneficiaries with countable
income below 100% of the federal poverty guideline. These estimates are based on
beneficiaries’ (and their spouses’) income, as counted for SSI eligibility purposes,
compared to the HHS’s poverty guidelines. This differs from the typical poverty-
level analyses that use total family income and compare it to the Census Bureau’s
poverty threshold. This is discussed in greater detail in the following section.
Nationwide, 28% of Medicare beneficiaries have countable income below 135%
of the federal poverty guideline. The results by state vary widely. The average
percentage of beneficiaries with countable income below 135% of poverty ranged
from 18% in Wisconsin to 43% in Mississippi. In 20 states, the proportion below
135% of poverty was significantly less than the national average. In 15 states,
including many states in the South, and in the District of Columbia, the proportion
below 135% of poverty was significantly higher than the national average.
For the other percentages below poverty, many of the same states have rates
significantly different than the national average. Nationally, more than one in three
aged noninstitutionalized Medicare beneficiaries (34%) had countable income below
150% of poverty. Forty-two percent of beneficiaries were below 175% of poverty.
Nearly half (49%) had countable income of less than twice the poverty guideline.

CRS-6
Table 2. Estimated Average Percentage and Number of Aged Medicare Beneficiaries with
Incomes Below Specified Levels of the Federal Poverty Guidelines, by State, 1999-2001
Below 100% of poverty
Below 135% of poverty
Below 150% of poverty
Below 175% of poverty Below 200% of poverty
State
Average
Estimated Average
Estimated
Average
Estimated Average
Estimated Average
Estimated
Alabama
21.4% ** 112,000
34.3% ** 179,000
42.5% ** 222,000
50.8% ** 265,000
55.4% **
289,000
Alaska
14.1%
5,000
28.0%
10,000
33.4%
11,000
41.7%
14,000
48.9%
17,000
Arizona
11.5%
* 66,000
21.5%
* 123,000
26.6%
* 153,000
34.0%
* 195,000
41.7%
*
239,000
Arkansas
19.3% ** 73,000
33.0% ** 124,000
41.1% ** 155,000
49.5% ** 186,000
57.1% **
215,000
California
14.1%
440,000
29.0%
904,000
34.8%
1,081,000
42.1%
1,308,000
48.3%
1,504,000
Colorado
10.5%
* 41,000
20.9%
* 83,000
26.9%
* 106,000
35.9%
* 142,000
43.4%
*
171,000
Connecticut
12.4%
59,000
22.0%
* 105,000
28.8%
* 137,000
34.9%
* 166,000
41.6%
*
198,000
Delaware
10.7%
* 10,000
23.5%
* 22,000
28.5%
* 26,000
37.8%
* 35,000
43.8%
*
40,000
District of Columbia
26.6% ** 16,000
40.0% ** 24,000
43.2% ** 26,000
49.0% ** 30,000
53.5%
33,000
Florida
14.3%
369,000
27.4%
705,000
33.1%
851,000
41.0%
1,056,000
48.7%
1,253,000
Georgia
21.0% ** 153,000
34.6% ** 253,000
41.4% ** 304,000
48.4% ** 355,000
54.9% **
403,000
Hawaii
18.5% ** 26,000
30.7%
43,000
34.3%
48,000
41.2%
58,000
46.9%
66,000
Idaho
11.3%
* 16,000
25.0%
36,000
31.1%
44,000
38.5%
55,000
47.1%
67,000
Illinois
12.6%
* 164,000
24.6%
* 322,000
30.5%
* 399,000
38.7%
* 508,000
46.3%
*
607,000
Indiana
9.2%
* 70,000
26.5%
202,000
31.9%
243,000
41.1%
314,000
49.7%
379,000
Iowa
9.3%
* 36,000
22.4%
* 88,000
28.4%
* 111,000
39.5%
154,000
47.6%
186,000
Kansas
9.7%
* 35,000
23.8%
* 87,000
29.2%
* 107,000
37.5%
* 137,000
45.8%
167,000
Kentucky
18.6% ** 85,000
34.6% ** 159,000
40.5% ** 186,000
48.5% ** 223,000
55.7% **
256,000
Louisiana
21.0% ** 95,000
37.4% ** 171,000
42.9% ** 196,000
50.6% ** 232,000
57.3% **
263,000
Maine
13.9%
24,000
30.1%
54,000
37.3%
67,000
46.0% ** 82,000
53.3% **
96,000
Maryland
16.1%
104,000
27.8%
178,000
31.1%
198,000
36.5%
* 233,000
42.2%
*
269,000
Massachusetts
15.9%
123,000
28.7%
222,000
35.7%
275,000
44.5%
343,000
50.3%
388,000
Michigan
11.2%
* 125,000
22.9%
* 255,000
29.0%
* 322,000
38.1%
* 424,000
46.2%
*
515,000
Minnesota
12.5%
60,000
25.6%
123,000
30.5%
147,000
37.6%
* 179,000
45.4%
*
216,000
Mississippi
28.4% ** 93,000
43.0% ** 141,000
48.4% ** 159,000
56.1% ** 185,000
61.2% **
202,000
Missouri
12.3%
* 76,000
23.9%
* 147,000
27.6%
* 171,000
40.2%
249,000
47.2%
293,000
Montana
11.6%
* 14,000
24.3%
* 29,000
30.3%
* 36,000
38.8%
46,000
46.7%
55,000
Nebraska
14.3%
29,000
27.8%
56,000
34.6%
69,000
41.9%
83,000
49.6%
99,000
Nevada
12.0%
* 25,000
23.7%
* 51,000
30.7%
65,000
39.1%
83,000
46.2%
98,000
New Hampshire
11.5%
* 18,000
22.8%
* 35,000
28.4%
* 44,000
37.4%
* 58,000
46.7%
73,000
New Jersey
13.6%
147,000
24.8%
* 270,000
30.8%
* 335,000
38.6%
* 420,000
45.2%
*
493,000
New Mexico
18.6% ** 41,000
34.2% ** 75,000
39.3% ** 86,000
45.7%
100,000
51.6%
113,000
New York
19.2% ** 437,000
31.6% ** 721,000
38.4% ** 876,000
45.6% ** 1,040,000
52.8% **
1,203,000
North Carolina
21.2% ** 196,000
35.6% ** 329,000
40.9% ** 378,000
47.0% ** 435,000
55.0% **
509,000

CRS-7
Below 100% of poverty
Below 135% of poverty
Below 150% of poverty
Below 175% of poverty Below 200% of poverty
State
Average
Estimated Average
Estimated
Average
Estimated Average
Estimated Average
Estimated
North Dakota
15.4%
14,000
31.7% ** 28,000
37.8% ** 34,000
49.6% ** 44,000
56.5% **
50,000
Ohio
11.6%
* 160,000
25.1%
* 349,000
30.0%
* 416,000
38.7%
* 537,000
47.5%
660,000
Oklahoma
14.4%
64,000
26.9%
120,000
32.0%
142,000
40.4%
180,000
47.2%
211,000
Oregon
9.8%
* 37,000
20.6%
* 78,000
26.1%
* 99,000
36.1%
* 136,000
44.5%
*
168,000
Pennsylvania
12.1%
* 203,000
25.4%
* 425,000
30.9%
* 515,000
39.9%
* 667,000
49.2%
821,000
Rhode Island
15.1%
24,000
31.5% ** 49,000
37.8% ** 59,000
46.6% ** 73,000
54.2% **
85,000
South Carolina
18.6% ** 92,000
33.3% ** 164,000
38.0% ** 187,000
46.7% ** 231,000
55.4% **
273,000
South Dakota
11.7%
* 12,000
24.9%
* 26,000
30.3%
* 31,000
38.5%
* 39,000
48.0%
49,000
Tennessee
22.0% ** 133,000
37.7% ** 227,000
43.1% ** 260,000
50.9% ** 306,000
58.6% **
352,000
Texas
18.8% ** 372,000
32.6% ** 646,000
38.7% ** 767,000
46.8% ** 929,000
52.6% **
1,043,000
Utah
12.0%
* 20,000
23.7%
* 39,000
28.1%
* 46,000
39.7%
65,000
46.1%
75,000
Vermont
17.2%
11,000
33.0% ** 22,000
40.4% ** 27,000
48.6% ** 32,000
56.7% **
38,000
Virginia
14.7%
117,000
27.3%
216,000
34.8%
276,000
42.9%
341,000
49.8%
395,000
Washington
12.8%
78,000
22.1%
* 136,000
26.6%
* 165,000
35.3%
* 220,000
41.7%
*
259,000
West Virginia
16.1%
45,000
28.9%
81,000
35.5%
99,000
46.5% ** 130,000
53.9% **
151,000
Wisconsin
8.1%
* 51,000
18.1%
* 115,000
24.5%
* 156,000
34.3%
* 219,000
43.4%
*
276,000
Wyoming
13.2%
7,000
27.6%
15,000
34.0%
19,000
43.5%
24,000
52.7%
29,000
United States
14.9%
4,826,000
28.1%
9,062,000 33.9%

10,935,000 42.1%
13,566,000
49.3%
15,911,000
Source: Table prepared by the Congressional Research Service based on data from the March supplement of the Current Population Survey, 2000-
2002.
Note: Income is determined based on the definition of countable income for Supplemental Security Income, not by total family income. The
Department of Health and Human Services’ federal poverty guidelines are used rather than the Census Bureau’s federal poverty threshold.
* indicates percentage of beneficiaries is statistically lower than the national rate, at the 90% confidence level;
** indicates the percentage of beneficiaries is statistically higher than the national rate, at the 90% confidence level.

CRS-8
Sources and Limitations
Source of Data. The state-by-state percentages presented in this report were
calculated using the March Supplement of the Current Population Survey (CPS).
The March Supplement of the CPS consists of a survey of approximately 99,000
households selected to be demographically representative of the civilian
noninstitutionalized population of the United States. The percent of aged Medicare
beneficiaries by poverty status was based on data from the CPS for 1999, 2000 and
2001. The sample sizes available for many states are small, especially when
examining a subset of the sample like Medicare beneficiaries over the age of 65.4
Small sample sizes increase the likelihood that the characteristics of the survey
participants differ from the characteristics of the population they are meant to
represent, which is known as sampling error. To increase the reliability of state-level
estimates, multiple-year estimates of the total number of beneficiaries and the
proportion of beneficiaries below specified levels of countable income relative to the
poverty guideline were calculated. The percentages are 3-year averages, covering
1999 to 2001. The total number of beneficiaries in each state is also an average of
the same 3 years. The number of beneficiaries in each income category is estimated
by applying the average percentages to the average total number of
noninstitutionalized aged beneficiaries in each state.
Income Defined. As previously noted, when beneficiaries’ eligibility for
Medicare cost-sharing and premium assistance is determined, income is counted
according to Supplemental Security Income (SSI) eligibility guidelines. In fact, each
of the bills discussed in this report ultimately point to SSI for how to count income.
As a result, to estimate the number of individuals who may be eligible for assistance
under these bills requires more analysis than simply looking at individuals’ reported
total income. The estimates of income used in this report were obtained by taking
respondents’ total income as reported in the CPS and subtracting from it the amounts
and types of income specified according to SSI eligibility rules as follows.
When calculating countable income under SSI, income is divided into two
categories — earned income, which consists of the CPS variables for wages and self-
employment earnings, and unearned income. The CPS gathers information on 17
types of unearned income. Two of these are not considered income for SSI purposes:
education assistance and child support payments.5
The following “disregards” are the same for individual’s income and couples’
combined income, as specified under SSI. The amount of countable unearned
income is reduced by up to $240 per year ($20 per month). If that maximum amount
4 Medicare beneficiaries under the age of 65 – those eligible for Medicare due to a disability
– were not included in this analysis because they can not be identified on the CPS.
5 Child support payments only count as income under SSI when determining eligibility for
a child for whom those payments are received.

CRS-9
is not reached (that is, if unearned income was less than $240 for the year), then the
remainder of the $240 disregard can be subtracted from earned income.6
Countable earned income is reduced by an additional $780 per year ($65 per
month). Once the remaining countable earned income is calculated, if there is any
left, half of it is subtracted off, and the amount that remains is counted as earned
income. The couple’s or individual’s countable earned and unearned incomes are
then added together and compared to the federal poverty guidelines.
Poverty Defined. The poverty guidelines are published by HHS and are used
primarily for determining eligibility for many federal programs, which is why the
guidelines were used in this analysis. The poverty thresholds, although more
commonly used for poverty-related analyses, are a different measure of poverty
updated by the Census Bureau and are used primarily for statistical purposes. In
2002, the most recent year for which the poverty thresholds are available, the poverty
threshold for a person 65 years of age or older living alone was $8,628; for a family
of two persons aged 65 years of age or older, the threshold was $10,874. The poverty
guideline for an individual living alone in the 48 contiguous states was $8,860; for
a family of two, the guideline was $11,940.
Estimation Limitations. The small sample sizes available from the CPS for
many states make it prudent to consider state-level estimates in terms of a range of
values. This range is based on sampling theory and takes into account the size of the
sample. While Table 2 shows the best point estimate, or single value, for the average
proportion of beneficiaries below specified levels of poverty, Table 3 reports a range
of values for these percentages. The size of the range depends primarily on sample
size. Table 3 shows the ranges based on a 90% confidence interval. A 90%
confidence interval means that given repeated sampling of income in a state, 9 out
of 10 times, the estimate of the percent below a certain level of poverty will lie within
the range set by the low and high estimates. For example, if one surveys people in
Colorado about their income compared to the poverty guideline, in 9 out of 10
sample surveys, on average, the percent of seniors with incomes below 135% of
poverty will be between 17.6% and 24.2%.7
The 90% confidence interval for the average total number of beneficiaries is
also shown, in Table 4.
6 SSI, public assistance welfare, disability payments and financial assistance payments are
considered unearned income when calculating total income. However, they are excluded
when calculating how much of the $240 disregard a beneficiary will receive. The CPS
variable for “financial assistance payments” is assumed to be state or nonprofit assistance.
7 Note that there is no way to determine if the results for Colorado in Table 2 are the 1 time
out of 10 that a different result is obtained, where the real percent uninsured is outside the
confidence interval (i.e., greater than 24.2% or less than 17.6%).

CRS-10
Table 3. High and Low Estimated Average Percentages of Aged Medicare Beneficiaries with
Incomes Below Specified Levels of the Federal Poverty Guidelines, by State, 1999-2001
Percentage of aged
Percentage of aged
Percentage of aged
Percentage of aged
Percentage of aged below
below 100% of poverty
below 135% of poverty
below 150% of poverty
below 175% of poverty
200% of poverty
Low
High
Low
High
Low
High
Low
High
Low
High
State
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
Alabama
18.1%
24.6%
30.6%
38.0%
38.6%
46.3%
46.9%
54.7%
51.5%
59.2%
Alaska
10.1%
18.0%
22.7%
33.3%
27.9%
39.0%
36.0%
47.5%
43.1%
54.7%
Arizona
8.9%
14.2%
18.1%
24.8%
23.0%
30.2%
30.2%
37.9%
37.6%
45.7%
Arkansas
16.4%
22.3%
29.5%
36.5%
37.4%
44.7%
45.8%
53.2%
53.4%
60.8%
California
12.7%
15.5%
27.2%
30.9%
32.9%
36.7%
40.1%
44.0%
46.3%
50.3%
Colorado
8.0%
12.9%
17.6%
24.2%
23.3%
30.6%
31.9%
39.9%
39.3%
47.6%
Connecticut
9.9%
14.9%
19.0%
25.0%
25.5%
32.1%
31.5%
38.4%
38.0%
45.1%
Delaware
8.4%
13.0%
20.4%
26.7%
25.1%
31.8%
34.2%
41.4%
40.1%
47.6%
District of Columbia
22.2%
31.0%
35.1%
44.9%
38.2%
48.2%
44.0%
54.1%
48.5%
58.6%
Florida
13.0%
15.7%
25.7%
29.1%
31.3%
34.9%
39.2%
42.9%
46.8%
50.6%
Georgia
17.6%
24.3%
30.7%
38.6%
37.2%
45.5%
44.2%
52.6%
50.7%
59.0%
Hawaii
15.2%
21.9%
26.8%
34.6%
30.3%
38.4%
37.1%
45.4%
42.6%
51.1%
Idaho
8.7%
13.9%
21.4%
28.6%
27.3%
34.9%
34.5%
42.5%
43.0%
51.2%
Illinois
10.8%
14.3%
22.4%
26.9%
28.1%
32.8%
36.2%
41.2%
43.7%
48.9%
Indiana
7.2%
11.2%
23.4%
29.6%
28.6%
35.1%
37.6%
44.6%
46.1%
53.2%
Iowa
7.3%
11.4%
19.4%
25.4%
25.1%
31.6%
36.0%
43.0%
44.0%
51.1%
Kansas
7.6%
11.9%
20.8%
26.8%
25.9%
32.4%
34.0%
41.0%
42.1%
49.4%
Kentucky
15.5%
21.7%
30.8%
38.5%
36.6%
44.4%
44.5%
52.5%
51.7%
59.6%
Louisiana
17.4%
24.5%
33.2%
41.5%
38.7%
47.1%
46.3%
54.9%
53.1%
61.6%
Maine
11.3%
16.6%
26.7%
33.6%
33.6%
40.9%
42.2%
49.7%
49.5%
57.0%
Maryland
13.3%
18.9%
24.4%
31.2%
27.6%
34.5%
32.8%
40.1%
38.5%
45.9%
Massachusetts
13.7%
18.1%
26.0%
31.5%
32.7%
38.6%
41.5%
47.6%
47.2%
53.4%
Michigan
9.5%
12.9%
20.6%
25.2%
26.5%
31.5%
35.5%
40.8%
43.5%
49.0%
Minnesota
9.9%
15.2%
22.0%
29.1%
26.8%
34.3%
33.7%
41.6%
41.3%
49.4%
Mississippi
24.6%
32.1%
38.9%
47.0%
44.3%
52.6%
52.0%
60.2%
57.2%
65.2%
Missouri
9.6%
15.0%
20.4%
27.3%
24.1%
31.2%
36.3%
44.0%
43.3%
51.2%
Montana
9.0%
14.1%
20.9%
27.8%
26.6%
33.9%
34.9%
42.7%
42.7%
50.7%
Nebraska
11.5%
17.2%
24.2%
31.4%
30.8%
38.4%
37.9%
45.8%
45.6%
53.6%
Nevada
9.3%
14.6%
20.3%
27.1%
26.9%
34.4%
35.2%
43.0%
42.2%
50.2%
New Hampshire
8.8%
14.2%
19.3%
26.2%
24.8%
32.1%
33.5%
41.3%
42.7%
50.8%
New Jersey
11.8%
15.4%
22.5%
27.1%
28.4%
33.2%
36.0%
41.1%
42.6%
47.9%
New Mexico
15.3%
21.9%
30.2%
38.3%
35.1%
43.4%
41.4%
49.9%
47.3%
55.8%

CRS-11
Percentage of aged
Percentage of aged
Percentage of aged
Percentage of aged
Percentage of aged below
below 100% of poverty
below 135% of poverty
below 150% of poverty
below 175% of poverty
200% of poverty
Low
High
Low
High
Low
High
Low
High
Low
High
State
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
New York
17.7%
20.7%
29.9%
33.4%
36.6%
40.3%
43.7%
47.5%
50.9%
54.7%
North Carolina
18.7%
23.7%
32.6%
38.5%
37.8%
43.9%
43.9%
50.1%
52.0%
58.1%
North Dakota
12.9%
18.0%
28.3%
35.0%
34.3%
41.2%
46.0%
53.1%
53.0%
60.1%
Ohio
9.9%
13.2%
23.0%
27.3%
27.7%
32.3%
36.2%
41.2%
45.0%
50.1%
Oklahoma
11.8%
16.9%
23.7%
30.2%
28.5%
35.4%
36.8%
44.0%
43.6%
50.9%
Oregon
7.4%
12.3%
17.3%
23.9%
22.5%
29.7%
32.2%
40.0%
40.4%
48.6%
Pennsylvania
10.7%
13.6%
23.5%
27.4%
28.8%
33.0%
37.7%
42.1%
47.0%
51.4%
Rhode Island
12.6%
17.6%
28.2%
34.7%
34.5%
41.2%
43.1%
50.1%
50.8%
57.7%
South Carolina
15.7%
21.6%
29.7%
36.9%
34.3%
41.8%
42.8%
50.6%
51.5%
59.3%
South Dakota
9.4%
14.0%
21.9%
27.9%
27.1%
33.6%
35.1%
41.9%
44.5%
51.6%
Tennessee
18.5%
25.6%
33.5%
41.9%
38.8%
47.4%
46.6%
55.2%
54.3%
62.8%
Texas
16.9%
20.7%
30.3%
34.8%
36.3%
41.1%
44.4%
49.3%
50.2%
55.0%
Utah
9.0%
14.9%
19.7%
27.8%
23.7%
32.4%
35.0%
44.5%
41.3%
50.9%
Vermont
13.9%
20.5%
29.0%
37.0%
36.1%
44.6%
44.3%
52.9%
52.5%
61.0%
Virginia
12.0%
17.4%
23.9%
30.7%
31.2%
38.4%
39.1%
46.7%
45.9%
53.6%
Washington
9.8%
15.7%
18.5%
25.7%
22.8%
30.4%
31.2%
39.4%
37.4%
45.9%
West Virginia
13.7%
18.6%
26.0%
31.9%
32.4%
38.7%
43.3%
49.7%
50.6%
57.1%
Wisconsin
6.0%
10.1%
15.2%
20.9%
21.3%
27.7%
30.7%
37.8%
39.7%
47.0%
Wyoming
10.4%
16.1%
23.9%
31.3%
30.1%
37.8%
39.4%
47.5%
48.7%
56.8%
United States
14.6%
15.3%
27.6%
28.6%
33.4%
34.4%
41.6%
42.6%
48.8%
49.9%
Source: Table prepared by the Congressional Research Service based on data from the March supplement of the Current Population Survey, 2000-
2002.
Note: Income is determined based on the definition of countable income for Supplemental Security Income, not by total family income. The
Department of Health and Human Services’ federal poverty guidelines are used rather than the Census Bureau’s federal poverty threshold.
Ranges represent the low and high estimates given a 90% confidence interval.

CRS-12
Table 4. High and Low Estimated Average Number of Aged Medicare Beneficiaries with
Incomes Below Specified Levels of the Federal Poverty Guidelines, by State, 1999-2001
Number of aged below
Number of aged below
Number of aged below
Number of aged below
Number of aged below
100% of poverty
135% of poverty
150% of poverty
175% of poverty
200% of poverty
Low
High
Low
High
Low
High
Low
High
Low
High
State
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
Alabama
93,000
131,000
155,000
204,000
195,000
249,000
236,000
295,000
259,000
320,000
Alaska
3,000
6,000
8,000
12,000
9,000
14,000
12,000
17,000
14,000
20,000
Arizona
50,000
82,000
102,000
145,000
129,000
177,000
168,000
222,000
209,000
269,000
Arkansas
61,000
85,000
108,000
140,000
137,000
172,000
166,000
206,000
194,000
236,000
California
393,000
486,000
837,000
970,000
1,009,000
1,154,000
1,229,000
1,388,000
1,419,000
1,589,000
Colorado
31,000
51,000
68,000
97,000
90,000
123,000
123,000
160,000
150,000
192,000
Connecticut
46,000
72,000
89,000
121,000
118,000
156,000
146,000
187,000
176,000
220,000
Delaware
8,000
12,000
18,000
25,000
23,000
30,000
31,000
39,000
36,000
45,000
District of Columbia
13,000
19,000
21,000
28,000
22,000
31,000
26,000
34,000
28,000
38,000
Florida
333,000
405,000
655,000
755,000
797,000
906,000
995,000
1,117,000
1,187,000
1,318,000
Georgia
125,000
181,000
218,000
289,000
264,000
343,000
313,000
398,000
358,000
449,000
Hawaii
21,000
31,000
37,000
50,000
41,000
55,000
50,000
66,000
58,000
74,000
Idaho
12,000
20,000
30,000
42,000
38,000
51,000
48,000
63,000
59,000
75,000
Illinois
140,000
188,000
289,000
356,000
362,000
437,000
466,000
549,000
561,000
653,000
Indiana
55,000
86,000
175,000
229,000
213,000
273,000
280,000
347,000
343,000
416,000
Iowa
28,000
45,000
74,000
101,000
96,000
126,000
137,000
172,000
167,000
205,000
Kansas
27,000
43,000
75,000
100,000
93,000
120,000
121,000
152,000
150,000
184,000
Kentucky
69,000
101,000
137,000
180,000
163,000
209,000
198,000
248,000
229,000
283,000
Louisiana
77,000
114,000
147,000
195,000
170,000
222,000
204,000
259,000
234,000
292,000
Maine
20,000
29,000
47,000
60,000
59,000
74,000
74,000
91,000
87,000
105,000
Maryland
83,000
124,000
152,000
204,000
171,000
226,000
203,000
262,000
237,000
301,000
Massachusetts
104,000
141,000
197,000
247,000
247,000
303,000
312,000
375,000
355,000
421,000
Michigan
105,000
145,000
226,000
283,000
290,000
355,000
387,000
461,000
474,000
555,000
Minnesota
46,000
74,000
103,000
143,000
124,000
169,000
155,000
204,000
190,000
243,000
Mississippi
79,000
108,000
123,000
159,000
140,000
179,000
164,000
205,000
180,000
223,000
Missouri
58,000
94,000
123,000
172,000
145,000
197,000
218,000
280,000
260,000
326,000
Montana
11,000
17,000
24,000
33,000
31,000
41,000
40,000
52,000
49,000
61,000
Nebraska
22,000
35,000
47,000
64,000
59,000
78,000
73,000
94,000
87,000
110,000
Nevada
20,000
31,000
42,000
59,000
56,000
75,000
73,000
94,000
87,000
110,000
New Hampshire
13,000
22,000
29,000
41,000
38,000
50,000
51,000
65,000
65,000
81,000
New Jersey
126,000
168,000
242,000
298,000
304,000
367,000
385,000
455,000
455,000
531,000

CRS-13
Number of aged below
Number of aged below
Number of aged below
Number of aged below
Number of aged below
100% of poverty
135% of poverty
150% of poverty
175% of poverty
200% of poverty
Low
High
Low
High
Low
High
Low
High
Low
High
State
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
estimate
New Mexico
33,000
49,000
64,000
86,000
75,000
98,000
88,000
113,000
100,000
127,000
New York
400,000
475,000
673,000
770,000
823,000
929,000
982,000
1,097,000
1,141,000
1,265,000
North Carolina
170,000
222,000
295,000
362,000
342,000
414,000
396,000
473,000
467,000
550,000
North Dakota
11,000
16,000
25,000
32,000
30,000
38,000
40,000
49,000
45,000
55,000
Ohio
136,000
184,000
314,000
383,000
378,000
454,000
493,000
580,000
612,000
707,000
Oklahoma
51,000
76,000
103,000
137,000
124,000
161,000
159,000
201,000
188,000
234,000
Oregon
27,000
47,000
64,000
92,000
83,000
115,000
118,000
155,000
147,000
189,000
Pennsylvania
177,000
229,000
387,000
462,000
474,000
556,000
620,000
714,000
769,000
873,000
Rhode Island
19,000
28,000
43,000
55,000
52,000
66,000
65,000
80,000
77,000
92,000
South Carolina
76,000
108,000
142,000
186,000
164,000
211,000
204,000
257,000
245,000
302,000
South Dakota
9,000
14,000
22,000
29,000
27,000
35,000
35,000
44,000
44,000
54,000
Tennessee
109,000
158,000
196,000
259,000
226,000
293,000
270,000
343,000
313,000
391,000
Texas
331,000
414,000
592,000
700,000
708,000
826,000
864,000
993,000
975,000
1,112,000
Utah
15,000
25,000
31,000
47,000
38,000
54,000
55,000
75,000
65,000
86,000
Vermont
9,000
14,000
19,000
25,000
23,000
30,000
29,000
36,000
34,000
42,000
Virginia
93,000
140,000
185,000
248,000
240,000
312,000
301,000
381,000
352,000
438,000
Washington
59,000
97,000
111,000
161,000
138,000
192,000
189,000
251,000
226,000
293,000
West Virginia
38,000
53,000
71,000
91,000
88,000
110,000
118,000
142,000
137,000
164,000
Wisconsin
38,000
65,000
95,000
135,000
133,000
179,000
192,000
246,000
246,000
307,000
Wyoming
6,000
9,000
13,000
18,000
16,000
22,000
21,000
27,000
26,000
33,000
United States
4,708,000
4,945,000
8,913,000
9,212,000
10,777,000
11,093,000
13,401,000 13,732,000
15,743,000 16,079,000
Source: Table prepared by the Congressional Research Service based on data from the Current Population Survey, 2000-2002.
Note: Income is determined based on the definition of countable income for Supplemental Security Income, not by total family income. The
Department of Health and Human Services’ federal poverty guidelines are used rather than the Census Bureau’s federal poverty threshold. Ranges
represent the low and high estimates given a 90% confidence interval.