Newsletter
New Formula Shows Twice as Many Senior Americans Living in Poverty Than Previously Thought
Date: 10/22/2009By Dan Prescher
October 22, 2009 -- The number of Americans living in poverty has been revised thanks to new formulas developed by the National Academy of Sciences.
The new formulas, which unlike government Census Bureau formulas take into account health, transportation, and child care costs, show 47.4 million Americans living in poverty – 7 million more than government figures.
The Census Bureau formulas have been in use since 1955 and ignore rising health care, child care, and transportation costs and fail to account for regional differences in cost of living.
When these factors are included in the NAS figures, the actual number of Americans living in poverty turns out to be 15.8 percent, or 1 in 6 Americans, rather than the Census Bureau’s 13.2 percent figure.
That’s a difference of an additional 7 million Americans living in poverty than Census Bureau figures indicated.
NAS statistics show seniors in much worse shape than previously thought, with nearly twice as many Americans 65 and older (18.7 percent) living in poverty compared to the old formula (9.7 percent).
The increase is almost all attributed to rising Medicare premiums, out-of-pocket health care expenses, deductibles, and a coverage gap in the prescription drug benefit.
Put those same seniors in a country with lower health care costs, and they would immediately rise above the poverty line.
For example, many seniors have already moved to Mexico, Ecuador, and other Latin American countries where national health plans keep the cost of comprehensive health coverage as low as $300 - $400 per year. In these same countries, out-of-pocket expenses can be tiny compared to the U.S. Doctor’s exams may cost just $35. Dental work and minor and major surgery can cost a third of less than in the States.