The new federal poverty guidelines, which are adjusted for inflation each January, provide an opportunity to reflect on the challenges faced by low-income families, and they help illustrate why state and federal policymakers ought to help more Americans gain access to health care.  

These guidelines largely control who is eligible for low or no-cost health care. They show, for example, that single parents with one child are currently ineligible for BadgerCare if they have a full-time job that pays more than $8.38 per hour! This leaves behind many families struggling to make ends meet.

The new federal poverty guidelines  issued a few weeks ago increased the Federal Poverty Level (FPL) by 1.1 percent for most family sizes. The adjustments for inflation slightly increase eligibility for many federal benefit programs, such as Medicaid, FoodShare and child care subsidies. An updated table on the Wisconsin Budget Project website shows what the poverty level is for different family sizes and how that affects eligibility for different public benefits. It also translates the annual poverty level figures into monthly and hourly incomes.

The positive thing about the new guidelines is that the modest inflation adjustment expands eligibility to include a small number of people who had a tiny bit too much income to qualify for benefits in December. But that’s only true if they didn’t get a raise this year greater than the small increase in the poverty guidelines. For a family of three, the poverty level is now $21,960, which is $240 more than last year.

Examining the table on our website helps show why many low-income adults in Wisconsin are still uninsured – despite the substantial progress made in 2014 and 2015 in reducing our state’s uninsured population.

Here are a few interesting and troublesome implications of how the 2021 poverty levels relate to BadgerCare eligibility:

• For a single parent with one child, the BadgerCare income limit amounts to $8.38 per hour (assuming a 40-hour work week). In other words, an adult in a two-person family will be ineligible for BadgerCare if they make just $1.14 per hour more than the minimum wage.
• For single childless adults, the BadgerCare income ceiling is $1,073 per month, which is equivalent to working 34 hours per week at the minimum wage. If they have a full-time minimum wage job they will have to seek subsidized private coverage through the federal Marketplace, but the higher cost-sharing in those plans puts that out of reach for many people working in low-wage jobs.
• In states that used the ACA to expand BadgerCare eligibility for adults to 138% of FPL, as Governor Evers has recommended, the income limit amounts to $8.55 per hour for a childless adult and $11.56 for a single parent with one child.

The Kids Forward website has an infographic that contains the new federal poverty levels and shows how they relate to different categories of eligibility for BadgerCare and subsidized coverage in the federal health insurance Marketplace.

We believe that everyone has a right to see a doctor if they get sick and shouldn’t have to worry about going bankrupt because of a medical emergency. However, Wisconsin’s current income limits for BadgerCare exclude many families working hard just to get by. Because of long-term, systemic employment and economic discrimination, Black and Brown people have higher rates of unemployment and under-employment than white people and are more likely to have lower paying jobs that do not offer health coverage. In our state, the burden of being uninsured falls disproportionately on Black, Native American, and Latinx Wisconsinites. Failing to meet the health care needs of families trying to make ends meet on near-poverty-level wages continues to trap them in cycles of poverty and health disparities.

The COVID-19 pandemic has shined a painful light on the racism and inequity built into our current health system and has underscored the need for fundamental changes. It has become even more obvious that we need to reimagine the health care system so it is more equitable and everyone has affordable, quality health care. In the short-term however, our state must do what it can to provide health coverage to thousands of struggling Wisconsinites by expanding BadgerCare.  

The ACA allowed states to make substantial progress in reducing racial disparities in insurance coverage and gave millions of people access to more affordable health care. However, there is much left to do, and the progress we have made is under threat. Republican governors and the Trump administration initiated a lawsuit challenging the legality of the ACA, and the case will be decided by the U.S. Supreme Court in the coming months.

As policymakers debate Medicaid expansion and judges consider the future of the ACA, think about the financial challenges facing a single parent in Wisconsin who has one child and is making a little more than $8.38, but makes too much money to qualify for BadgerCare. Try to imagine how you would cover rent, utilities, food, clothing, transportation and other necessities for your family, and then pay health insurance premiums, deductibles, and copays on top of all that. There’s a lot of work to do, and we can’t afford to move backwards.

Jon Peacock and William Parke-Sutherland