Three Percent Increase May Help Some Families Qualify for Benefits

Late last week the federal government released the 2012 Federal Poverty Income Guidelines, better known as the “federal poverty level” (FPL). Wisconsin uses the guidelines to determine eligibility for a number of public assistance programs, such as BadgerCare and child care subsidies (Wisconsin Shares). See the new guidelines on the WCCF website: Tables for Annual, Monthly and Hourly Earnings at Various Percentages of the Poverty Level.   

The new guidelines are about 3 percent higher than the ones used in 2011, which had grown only 0.6 percent in the previous two years combined (relative to the 2009 level). In the short run, the increase in the poverty level may make additional families eligible for public benefits, such as BadgerCare, or may decrease their cost-sharing. Of course, over the longer haul such gains usually evaporate – if or when families enjoy wage increases that track the cost of living. The Department of Health Services (DHS) said this week that it will send letters to BadgerCare participants who are affected by the new poverty levels.  DHS notes that the change may drop some families below 200% of FPL. That will enable some parents to become eligible for BadgerCare (by paying a monthly premium), and their children would move from the Benchmark plan to the Standard plan. Other families already enrolled could have their premiums reduced.

WCCF has posted updated tables, which we prepare each year, showing the federal poverty level (and various percentages of that level) for different sized families.  Our tables also translate the annual poverty level figures into monthly and hourly amounts.

This year we included a column in the table for the income at 133% of the poverty level because that is likely to be an important standard in BadgerCare. DHS has proposed making individuals over that income level ineligible for BadgerCare if they have access to employer coverage with premiums that would cost less than 9.5% of family income. Although federal officials are unlikely to grant a waiver allowing that change to apply to children, they said in a December letter to DHS that the state does not need a waiver to apply that policy to adults over 133% of FPL.

A somewhat similar but more focused table, which was developed by the Dept. of Children and Families specifically for purposes of the the child care subsidy program and W-2, can be found in a new “operations memo” (no. 12-06).  DHS has also revised its manuals, which now reflect the updated income standards for the following programs:
  –  BadgerCare Plus:  dhs.wisconsin.gov/badgercareplus/fpl.htm
  –  Medicaid for the Elderly, Blind or Disabled:  dhs.wisconsin.gov/medicaid/fpl/fpl.htm
  –  SeniorCare:   dhs.wisconsin.gov/seniorCare/fpl.htm

Much of the tax code, like the poverty level, is adjusted each year to reflect increases in the cost of living. However, one part of the tax code that isn’t being adjusted – thanks to a decision in the last budget bill – is the Homestead Tax Credit, which provides targeted property tax relief to low-income households.  You can read more about that problem in our other blog post today.

Jon Peacock