Why the FPL is a BFD

John Taylor: May 22, 20120 Comments

Budgeting is sometimes called an educated guess. What’s coming in, what’s being spent – and determining the value of a gizmo or someone’s time and output. And given that the California and federal budgets are Big Financial Disasters, some UCLA researchers took a look at a very important benchmark used to determine – among other things – who qualifies for private or public healthcare assistance. For instance, how much of a discount you might get on your hospital bill.

And they’ve judged that the FPL – federal poverty level – is a bad guideline particularly in California because it does not factor in the high costs of basic living expenses in the state.  They say, for example, this year’s definition of the FPL for a couple – $15,130 – should actually be three times higher in some areas of the state.  So there is much more poverty in California than is being accurately counted – despite the fact there are many more refined markers available than the FPL.

A little history. The FPL was first adopted in 1965, researchers say, based on surveys that indicated the average American family in the 1950s spent one-third of their income on food. Since then, the tool has been adjusted by the consumer price index but has not been altered to reflect the rising costs of living or that we might spend more on mortgages or rentals each month than we do on food.

So, because of the FPL, some Californians find they don’t have enough money to cover their basic needs but aren’t deemed poor enough to qualify for various aid programs.  And let’s not forget that those assistance programs, including government funding for hospitals, are facing enormous whacks from lawmakers in DC and Sacramento.

To quote from the UCLA Center for Health Policy Research brief: “Having data that can accurately capture the complexity of the current social and economic reality in California can contribute to innovative solutions to help California’s most vulnerable populations.”

Translation:  We’re using an antiquated tool because it’s become embedded in the world of wonks who divvy up dollars and, ultimately, deny or limit healthcare.

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