Washington, DC, USA. State assistance programs for the uninsured paid off last year in the United States, but little progress was made reducing overall poverty, the U.S. Census Bureau reported on August 26th. The new numbers show a small increase in poverty, bringing the total to 37.3 million people, while median family income rose slightly.

 

But that was before the current economic downturn took hold.

 

“These 2007 results are as good as they get,” said Jared Bernstein, senior economist with the Economic Policy Institute (EPI). “It’s a virtual certainty that poverty is increasing in 2008, and median incomes are falling.”

 

Even after six years of economic growth, the 2007 census report shows median income lower and poverty rates higher than they were when the nation recovered from the last slowdown in 2001, according to the Center for Budget and Policy Priorities (CBPP).

 

But the nation’s health-care crisis appeared to improve. About 1.3 million previously uninsured Americans obtained insurance in 2007, marking the first time in seven years, and the first time under the Bush administration, that the rate — 15.3 percent in 2007, down from 15.8 percent in 2006 — and number of uninsured people have fallen.

 

For most of 2007, inflation was below 3 percent, real wages were rising and unemployment was below 4 percent. Today, unemployment is 5.7 percent and rising, inflation is 5.6 percent and skyrocketing enrollment in Food Stamps and other assistance programs indicate the ranks of the poor are expanding, CBPP said.

 

“The main thing driving the poverty numbers is real estate, the oil shock, the war (in Iraq) and globalization. We can only hope for economic improvement. Otherwise, next year’s numbers are going to be very bad,” Douglas Besharov, poverty expert at the American Enterprise Institute (AEI) told Stateline.org.

 

Based on historical trends, Besharov predicted the economic downturn has caused another half percent increase in poverty between June 2007 and June 2008.

 

Both liberal and conservative experts say the economy is the main driver of the nation’s poverty and health-care problems, but long-term state and federal anti-poverty and health care policies can help.

 

“There are no effective short-term anti-poverty solutions, only long-term remedies,” Besharov said.

 

In the last two years, several states have put poverty at the top of their agendas, with a primary goal of reducing child poverty and analyzing traditional anti-poverty programs to determine what type of low-income assistance works best, said Jack Tweedie, poverty expert with the National Conference of State Legislatures (NCSL).

 

While the 2007 increase in overall poverty was only slight, the number of children living in poverty jumped by 500,000 to 13.3 million, and the child poverty rate climbed from 17.4 percent in 2006 to 18 percent in 2007.

 

Since 2001, child poverty rates have increased more than 40 percent in 13 states: Connecticut, Delaware, Indiana, Iowa, Maryland, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, Rhode Island, South Dakota and Virginia, Tweedie said. “These trends are particularly worrisome, because it can mean a continuation of persistent poverty from one generation to the next,” he said.

 

The 2007 report indicates most of the country was not deeply affected by the changing economy. But in Michigan, where 45,000 more people fell below the poverty line and median income slipped 1.2 percent, the recession came early. In contrast, energy-producing states, including Alaska, Montana, Oklahoma, Utah and Wyoming, got a boost from the energy crisis that is still hurting the rest of the country.

 

At $68,080, Maryland had the highest median household income and Mississippi had the lowest at $35,338.

 

Mississippi also had the highest poverty rate at 20.6 percent, followed by Louisiana (18.6 percent), New Mexico (18.1 percent), Arkansas (17.9 percent) and Kentucky (17.3). New Hampshire had the lowest poverty rate at 7.1 percent, followed by Connecticut (7.9 percent), Hawaii (8 percent) and Maryland (8.3 percent).

 

The decline in the number of uninsured came entirely because of increased government subsidies such as Medicaid, the state-federal low-income health program, and the State Children’s Health Insurance Program (SCHIP). During the same period, the rate of employers offering coverage fell slightly, from 59.7 percent to 59.3 percent.

 

Experts predict that the worsening economy will further depress the number of businesses offering health insurance and states’ budget woes will mean curtailed use of Medicaid to cover the uninsured. As a result, the number of uninsured, like poverty levels, is expected to rise.

 

But in at least one state, a dramatic decline in the ranks of the uninsured points to the success of a new policy initiative. Massachusetts’ ambitious universal health care plan, which took effect in 2006, requires anyone who can afford it to buy insurance, while the state subsidizes coverage for those with income levels up to three times the federal poverty level. Now the Bay State is tied with Hawaii for the lowest percentage of uninsured citizens – 8.3 percent – over a three-year average.

 

That compares to 24.4 percent in Texas, the state with the highest rate of uninsured, and a national average of 15.4 percent.

 

Massachusetts’ Division of Health Care Finance and Policy reported earlier this month that 439,000 new people got coverage from June 2006 through March 2008.

 

In contrast, California, Gov. Arnold Schwarzenegger (R) last year failed in his effort to get a universal health care law enacted, leaving about 6.7 million people without coverage, the most in the nation.

 

 

 

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