Federal Poverty Level Threshold For Programs Still Uses 1960s Formula

Published: Monday, July 3, 2017 - 3:30pm
Updated: Monday, July 3, 2017 - 4:24pm

We hear a lot about the federal poverty level, especially surrounding the health-care debate. You can qualify for a subsidy if you make up to 400 percent of the poverty level, or you qualify for Medicaid if you’re income is below 138 percent of the poverty level.

But what does any of this really mean?

The Federal Poverty Level is issued every year by the Department of Health and Human Services, and it’s used to gauge eligibility for certain federal programs — like Medicaid, or food stamps, or the Children’s Health Insurance program. 

The standard was first adopted in 1963 during President Lyndon Johnson’s “War on Poverty,” and then updated by the author Mollie Orshansky in 1965.

Back then, a single person was considered living in poverty with an income of about $1,700 a year. In 2017, it was $12,000 — a jump, but, some say, it’s not nearly a big enough one.

The federal poverty threshold still uses a 1960s formula and many argue it should be twice as high to be reasonable for a person or a family to live on.

To discuss what this marker means — both back in the '60s and today — I spoke with Dr. James Ziliak.

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