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

This report discusses bills related to Medicare benefits, which include 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.

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 statelevel 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-ofpocket 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 stoploss 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 brandname 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 Bill H.R. 4954 Countable income limit and scope of assistance 0%-<150% FPL: Premium subsidy set at 100% of standard drug coverage 150%-<175% FPL: Sliding-scale premium subsidy Countable assets limit Less than $4,000, or $6,000 for 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 150%-<175% FPL: All cost-sharing; sliding-scale 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 plan’s usual amount. Beneficiary’s coinsurance reduced to 2.5% from 50% for first tier (between deductible and initial 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%. Less than $4,000, or $6,000 for couples Less than $4,000, or $6,000 for couples 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 copay, <$5 brand name copay Note: FPL is federal poverty level. No assets test 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 povertylevel 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 State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina Below 100% of poverty Below 135% of poverty Below 150% of poverty Below 175% of poverty Below 200% of poverty Average Estimated Average Estimated Average Estimated Average Estimated Average Estimated 34.3% ** 179,000 42.5% ** 222,000 50.8% ** 265,000 55.4% ** 289,000 21.4% ** 112,000 14.1% 5,000 28.0% 10,000 33.4% 11,000 41.7% 14,000 48.9% 17,000 11.5% * 66,000 21.5% * 123,000 26.6% * 153,000 34.0% * 195,000 41.7% * 239,000 73,000 33.0% ** 124,000 41.1% ** 155,000 49.5% ** 186,000 57.1% ** 215,000 19.3% ** 14.1% 440,000 29.0% 904,000 34.8% 1,081,000 42.1% 1,308,000 48.3% 1,504,000 10.5% * 41,000 20.9% * 83,000 26.9% * 106,000 35.9% * 142,000 43.4% * 171,000 12.4% 59,000 22.0% * 105,000 28.8% * 137,000 34.9% * 166,000 41.6% * 198,000 10.7% * 10,000 23.5% * 22,000 28.5% * 26,000 37.8% * 35,000 43.8% * 40,000 16,000 40.0% ** 24,000 43.2% ** 26,000 49.0% ** 30,000 53.5% 33,000 26.6% ** 14.3% 369,000 27.4% 705,000 33.1% 851,000 41.0% 1,056,000 48.7% 1,253,000 21.0% ** 153,000 34.6% ** 253,000 41.4% ** 304,000 48.4% ** 355,000 54.9% ** 403,000 18.5% ** 26,000 30.7% 43,000 34.3% 48,000 41.2% 58,000 46.9% 66,000 16,000 25.0% 36,000 31.1% 44,000 38.5% 55,000 47.1% 67,000 11.3% * 12.6% * 164,000 24.6% * 322,000 30.5% * 399,000 38.7% * 508,000 46.3% * 607,000 9.2% * 70,000 26.5% 202,000 31.9% 243,000 41.1% 314,000 49.7% 379,000 36,000 22.4% * 88,000 28.4% * 111,000 39.5% 154,000 47.6% 186,000 9.3% * 9.7% * 35,000 23.8% * 87,000 29.2% * 107,000 37.5% * 137,000 45.8% 167,000 85,000 34.6% ** 159,000 40.5% ** 186,000 48.5% ** 223,000 55.7% ** 256,000 18.6% ** 21.0% ** 95,000 37.4% ** 171,000 42.9% ** 196,000 50.6% ** 232,000 57.3% ** 263,000 13.9% 24,000 30.1% 54,000 37.3% 67,000 46.0% ** 82,000 53.3% ** 96,000 42.2% * 269,000 16.1% 104,000 27.8% 178,000 31.1% 198,000 36.5% * 233,000 15.9% 123,000 28.7% 222,000 35.7% 275,000 44.5% 343,000 50.3% 388,000 11.2% * 125,000 22.9% * 255,000 29.0% * 322,000 38.1% * 424,000 46.2% * 515,000 12.5% 60,000 25.6% 123,000 30.5% 147,000 37.6% * 179,000 45.4% * 216,000 28.4% ** 93,000 43.0% ** 141,000 48.4% ** 159,000 56.1% ** 185,000 61.2% ** 202,000 76,000 23.9% * 147,000 27.6% * 171,000 40.2% 249,000 47.2% 293,000 12.3% * 11.6% * 14,000 24.3% * 29,000 30.3% * 36,000 38.8% 46,000 46.7% 55,000 14.3% 29,000 27.8% 56,000 34.6% 69,000 41.9% 83,000 49.6% 99,000 12.0% * 25,000 23.7% * 51,000 30.7% 65,000 39.1% 83,000 46.2% 98,000 18,000 22.8% * 35,000 28.4% * 44,000 37.4% * 58,000 46.7% 73,000 11.5% * 13.6% 147,000 24.8% * 270,000 30.8% * 335,000 38.6% * 420,000 45.2% * 493,000 41,000 34.2% ** 75,000 39.3% ** 86,000 45.7% 100,000 51.6% 113,000 18.6% ** 19.2% ** 437,000 31.6% ** 721,000 38.4% ** 876,000 45.6% ** 1,040,000 52.8% ** 1,203,000 21.2% ** 196,000 35.6% ** 329,000 40.9% ** 378,000 47.0% ** 435,000 55.0% ** 509,000 CRS-7 State North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming United States Below 100% of poverty Below 135% of poverty Below 150% of poverty Below 175% of poverty Below 200% of poverty Average Estimated Average Estimated Average Estimated Average Estimated Average Estimated 15.4% 14,000 31.7% ** 28,000 37.8% ** 34,000 49.6% ** 44,000 56.5% ** 50,000 25.1% * 349,000 30.0% * 416,000 38.7% * 537,000 47.5% 660,000 11.6% * 160,000 14.4% 64,000 26.9% 120,000 32.0% 142,000 40.4% 180,000 47.2% 211,000 9.8% * 37,000 20.6% * 78,000 26.1% * 99,000 36.1% * 136,000 44.5% * 168,000 12.1% * 203,000 25.4% * 425,000 30.9% * 515,000 39.9% * 667,000 49.2% 821,000 15.1% 24,000 31.5% ** 49,000 37.8% ** 59,000 46.6% ** 73,000 54.2% ** 85,000 18.6% ** 92,000 33.3% ** 164,000 38.0% ** 187,000 46.7% ** 231,000 55.4% ** 273,000 11.7% * 12,000 24.9% * 26,000 30.3% * 31,000 38.5% * 39,000 48.0% 49,000 37.7% ** 227,000 43.1% ** 260,000 50.9% ** 306,000 58.6% ** 352,000 22.0% ** 133,000 18.8% ** 372,000 32.6% ** 646,000 38.7% ** 767,000 46.8% ** 929,000 52.6% ** 1,043,000 12.0% * 20,000 23.7% * 39,000 28.1% * 46,000 39.7% 65,000 46.1% 75,000 17.2% 11,000 33.0% ** 22,000 40.4% ** 27,000 48.6% ** 32,000 56.7% ** 38,000 14.7% 117,000 27.3% 216,000 34.8% 276,000 42.9% 341,000 49.8% 395,000 12.8% 78,000 22.1% * 136,000 26.6% * 165,000 35.3% * 220,000 41.7% * 259,000 16.1% 45,000 28.9% 81,000 35.5% 99,000 46.5% ** 130,000 53.9% ** 151,000 51,000 18.1% * 115,000 24.5% * 156,000 34.3% * 219,000 43.4% * 276,000 8.1% * 13.2% 7,000 27.6% 15,000 34.0% 19,000 43.5% 24,000 52.7% 29,000 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, 20002002. 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 selfemployment 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 State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico Percentage of aged Percentage of aged Percentage of aged below 100% of poverty below 135% of poverty below 150% of poverty Low High Low High Low High estimate estimate estimate estimate estimate estimate 18.1% 24.6% 30.6% 38.0% 38.6% 46.3% 10.1% 18.0% 22.7% 33.3% 27.9% 39.0% 8.9% 14.2% 18.1% 24.8% 23.0% 30.2% 16.4% 22.3% 29.5% 36.5% 37.4% 44.7% 12.7% 15.5% 27.2% 30.9% 32.9% 36.7% 8.0% 12.9% 17.6% 24.2% 23.3% 30.6% 9.9% 14.9% 19.0% 25.0% 25.5% 32.1% 8.4% 13.0% 20.4% 26.7% 25.1% 31.8% 22.2% 31.0% 35.1% 44.9% 38.2% 48.2% 13.0% 15.7% 25.7% 29.1% 31.3% 34.9% 17.6% 24.3% 30.7% 38.6% 37.2% 45.5% 15.2% 21.9% 26.8% 34.6% 30.3% 38.4% 8.7% 13.9% 21.4% 28.6% 27.3% 34.9% 10.8% 14.3% 22.4% 26.9% 28.1% 32.8% 7.2% 11.2% 23.4% 29.6% 28.6% 35.1% 7.3% 11.4% 19.4% 25.4% 25.1% 31.6% 7.6% 11.9% 20.8% 26.8% 25.9% 32.4% 15.5% 21.7% 30.8% 38.5% 36.6% 44.4% 17.4% 24.5% 33.2% 41.5% 38.7% 47.1% 11.3% 16.6% 26.7% 33.6% 33.6% 40.9% 13.3% 18.9% 24.4% 31.2% 27.6% 34.5% 13.7% 18.1% 26.0% 31.5% 32.7% 38.6% 9.5% 12.9% 20.6% 25.2% 26.5% 31.5% 9.9% 15.2% 22.0% 29.1% 26.8% 34.3% 24.6% 32.1% 38.9% 47.0% 44.3% 52.6% 9.6% 15.0% 20.4% 27.3% 24.1% 31.2% 9.0% 14.1% 20.9% 27.8% 26.6% 33.9% 11.5% 17.2% 24.2% 31.4% 30.8% 38.4% 9.3% 14.6% 20.3% 27.1% 26.9% 34.4% 8.8% 14.2% 19.3% 26.2% 24.8% 32.1% 11.8% 15.4% 22.5% 27.1% 28.4% 33.2% 15.3% 21.9% 30.2% 38.3% 35.1% 43.4% Percentage of aged Percentage of aged below below 175% of poverty 200% of poverty Low High Low High estimate estimate estimate estimate 46.9% 54.7% 51.5% 59.2% 36.0% 47.5% 43.1% 54.7% 30.2% 37.9% 37.6% 45.7% 45.8% 53.2% 53.4% 60.8% 40.1% 44.0% 46.3% 50.3% 31.9% 39.9% 39.3% 47.6% 31.5% 38.4% 38.0% 45.1% 34.2% 41.4% 40.1% 47.6% 44.0% 54.1% 48.5% 58.6% 39.2% 42.9% 46.8% 50.6% 44.2% 52.6% 50.7% 59.0% 37.1% 45.4% 42.6% 51.1% 34.5% 42.5% 43.0% 51.2% 36.2% 41.2% 43.7% 48.9% 37.6% 44.6% 46.1% 53.2% 36.0% 43.0% 44.0% 51.1% 34.0% 41.0% 42.1% 49.4% 44.5% 52.5% 51.7% 59.6% 46.3% 54.9% 53.1% 61.6% 42.2% 49.7% 49.5% 57.0% 32.8% 40.1% 38.5% 45.9% 41.5% 47.6% 47.2% 53.4% 35.5% 40.8% 43.5% 49.0% 33.7% 41.6% 41.3% 49.4% 52.0% 60.2% 57.2% 65.2% 36.3% 44.0% 43.3% 51.2% 34.9% 42.7% 42.7% 50.7% 37.9% 45.8% 45.6% 53.6% 35.2% 43.0% 42.2% 50.2% 33.5% 41.3% 42.7% 50.8% 36.0% 41.1% 42.6% 47.9% 41.4% 49.9% 47.3% 55.8% CRS-11 State New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming United States Percentage of aged Percentage of aged Percentage of aged below 100% of poverty below 135% of poverty below 150% of poverty Low High Low High Low High estimate estimate estimate estimate estimate estimate 17.7% 20.7% 29.9% 33.4% 36.6% 40.3% 18.7% 23.7% 32.6% 38.5% 37.8% 43.9% 12.9% 18.0% 28.3% 35.0% 34.3% 41.2% 9.9% 13.2% 23.0% 27.3% 27.7% 32.3% 11.8% 16.9% 23.7% 30.2% 28.5% 35.4% 7.4% 12.3% 17.3% 23.9% 22.5% 29.7% 10.7% 13.6% 23.5% 27.4% 28.8% 33.0% 12.6% 17.6% 28.2% 34.7% 34.5% 41.2% 15.7% 21.6% 29.7% 36.9% 34.3% 41.8% 9.4% 14.0% 21.9% 27.9% 27.1% 33.6% 18.5% 25.6% 33.5% 41.9% 38.8% 47.4% 16.9% 20.7% 30.3% 34.8% 36.3% 41.1% 9.0% 14.9% 19.7% 27.8% 23.7% 32.4% 13.9% 20.5% 29.0% 37.0% 36.1% 44.6% 12.0% 17.4% 23.9% 30.7% 31.2% 38.4% 9.8% 15.7% 18.5% 25.7% 22.8% 30.4% 13.7% 18.6% 26.0% 31.9% 32.4% 38.7% 6.0% 10.1% 15.2% 20.9% 21.3% 27.7% 10.4% 16.1% 23.9% 31.3% 30.1% 37.8% 14.6% 15.3% 27.6% 28.6% 33.4% 34.4% Percentage of aged Percentage of aged below below 175% of poverty 200% of poverty Low High Low High estimate estimate estimate estimate 43.7% 47.5% 50.9% 54.7% 43.9% 50.1% 52.0% 58.1% 46.0% 53.1% 53.0% 60.1% 36.2% 41.2% 45.0% 50.1% 36.8% 44.0% 43.6% 50.9% 32.2% 40.0% 40.4% 48.6% 37.7% 42.1% 47.0% 51.4% 43.1% 50.1% 50.8% 57.7% 42.8% 50.6% 51.5% 59.3% 35.1% 41.9% 44.5% 51.6% 46.6% 55.2% 54.3% 62.8% 44.4% 49.3% 50.2% 55.0% 35.0% 44.5% 41.3% 50.9% 44.3% 52.9% 52.5% 61.0% 39.1% 46.7% 45.9% 53.6% 31.2% 39.4% 37.4% 45.9% 43.3% 49.7% 50.6% 57.1% 30.7% 37.8% 39.7% 47.0% 39.4% 47.5% 48.7% 56.8% 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, 20002002. 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 State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey Number of aged below 100% of poverty Low High estimate estimate 93,000 131,000 3,000 6,000 50,000 82,000 61,000 85,000 393,000 486,000 31,000 51,000 46,000 72,000 8,000 12,000 13,000 19,000 333,000 405,000 125,000 181,000 21,000 31,000 12,000 20,000 140,000 188,000 55,000 86,000 28,000 45,000 27,000 43,000 69,000 101,000 77,000 114,000 20,000 29,000 83,000 124,000 104,000 141,000 105,000 145,000 46,000 74,000 79,000 108,000 58,000 94,000 11,000 17,000 22,000 35,000 20,000 31,000 13,000 22,000 126,000 168,000 Number of aged below 135% of poverty Low High estimate estimate 155,000 204,000 8,000 12,000 102,000 145,000 108,000 140,000 837,000 970,000 68,000 97,000 89,000 121,000 18,000 25,000 21,000 28,000 655,000 755,000 218,000 289,000 37,000 50,000 30,000 42,000 289,000 356,000 175,000 229,000 74,000 101,000 75,000 100,000 137,000 180,000 147,000 195,000 47,000 60,000 152,000 204,000 197,000 247,000 226,000 283,000 103,000 143,000 123,000 159,000 123,000 172,000 24,000 33,000 47,000 64,000 42,000 59,000 29,000 41,000 242,000 298,000 Number of aged below Number of aged below Number of aged below 150% of poverty 175% of poverty 200% of poverty Low High Low High Low High estimate estimate estimate estimate estimate estimate 195,000 249,000 236,000 295,000 259,000 320,000 9,000 14,000 12,000 17,000 14,000 20,000 129,000 177,000 168,000 222,000 209,000 269,000 137,000 172,000 166,000 206,000 194,000 236,000 1,009,000 1,154,000 1,229,000 1,388,000 1,419,000 1,589,000 90,000 123,000 123,000 160,000 150,000 192,000 118,000 156,000 146,000 187,000 176,000 220,000 23,000 30,000 31,000 39,000 36,000 45,000 22,000 31,000 26,000 34,000 28,000 38,000 797,000 906,000 995,000 1,117,000 1,187,000 1,318,000 264,000 343,000 313,000 398,000 358,000 449,000 41,000 55,000 50,000 66,000 58,000 74,000 38,000 51,000 48,000 63,000 59,000 75,000 362,000 437,000 466,000 549,000 561,000 653,000 213,000 273,000 280,000 347,000 343,000 416,000 96,000 126,000 137,000 172,000 167,000 205,000 93,000 120,000 121,000 152,000 150,000 184,000 163,000 209,000 198,000 248,000 229,000 283,000 170,000 222,000 204,000 259,000 234,000 292,000 59,000 74,000 74,000 91,000 87,000 105,000 171,000 226,000 203,000 262,000 237,000 301,000 247,000 303,000 312,000 375,000 355,000 421,000 290,000 355,000 387,000 461,000 474,000 555,000 124,000 169,000 155,000 204,000 190,000 243,000 140,000 179,000 164,000 205,000 180,000 223,000 145,000 197,000 218,000 280,000 260,000 326,000 31,000 41,000 40,000 52,000 49,000 61,000 59,000 78,000 73,000 94,000 87,000 110,000 56,000 75,000 73,000 94,000 87,000 110,000 38,000 50,000 51,000 65,000 65,000 81,000 304,000 367,000 385,000 455,000 455,000 531,000 CRS-13 State New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming United States Number of aged below 100% of poverty Low High estimate estimate 33,000 49,000 400,000 475,000 170,000 222,000 11,000 16,000 136,000 184,000 51,000 76,000 27,000 47,000 177,000 229,000 19,000 28,000 76,000 108,000 9,000 14,000 109,000 158,000 331,000 414,000 15,000 25,000 9,000 14,000 93,000 140,000 59,000 97,000 38,000 53,000 38,000 65,000 6,000 9,000 4,708,000 4,945,000 Number of aged below 135% of poverty Low High estimate estimate 64,000 86,000 673,000 770,000 295,000 362,000 25,000 32,000 314,000 383,000 103,000 137,000 64,000 92,000 387,000 462,000 43,000 55,000 142,000 186,000 22,000 29,000 196,000 259,000 592,000 700,000 31,000 47,000 19,000 25,000 185,000 248,000 111,000 161,000 71,000 91,000 95,000 135,000 13,000 18,000 8,913,000 9,212,000 Number of aged below Number of aged below Number of aged below 150% of poverty 175% of poverty 200% of poverty Low High Low High Low High estimate estimate estimate estimate estimate estimate 75,000 98,000 88,000 113,000 100,000 127,000 823,000 929,000 982,000 1,097,000 1,141,000 1,265,000 342,000 414,000 396,000 473,000 467,000 550,000 30,000 38,000 40,000 49,000 45,000 55,000 378,000 454,000 493,000 580,000 612,000 707,000 124,000 161,000 159,000 201,000 188,000 234,000 83,000 115,000 118,000 155,000 147,000 189,000 474,000 556,000 620,000 714,000 769,000 873,000 52,000 66,000 65,000 80,000 77,000 92,000 164,000 211,000 204,000 257,000 245,000 302,000 27,000 35,000 35,000 44,000 44,000 54,000 226,000 293,000 270,000 343,000 313,000 391,000 708,000 826,000 864,000 993,000 975,000 1,112,000 38,000 54,000 55,000 75,000 65,000 86,000 23,000 30,000 29,000 36,000 34,000 42,000 240,000 312,000 301,000 381,000 352,000 438,000 138,000 192,000 189,000 251,000 226,000 293,000 88,000 110,000 118,000 142,000 137,000 164,000 133,000 179,000 192,000 246,000 246,000 307,000 16,000 22,000 21,000 27,000 26,000 33,000 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.