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New ‘Elder Index’ Seeks to Replace Outdated Federal Poverty Guidelines

California Health Advocates > News > Low-Income Help > New ‘Elder Index’ Seeks to Replace Outdated Federal Poverty Guidelines

Posted by Karen Fletcher on April 23, 2008

The threshold for seniors to qualify for government assistance is so low that most older Californians who have incomes twice that high don’t have enough money to pay for the necessities of living, according to a recent joint study by UCLA’s Center for Health Policy Research, Insight Center for Community Economic Development (CCED), and Wider Opportunities for Women (WOW).

An Emerging Crisis

The 2007 Current Population Survey (CPS), found 34% of California’s population age 65+ was below 200% of poverty (or $20,400 for an individual)

California has the largest elderly population in the nation, with 3.5 million people age 65+

California’s over-65 population is projected to nearly double by 2020 to 6.5 million

The study finds, for example, that a single senior living in a one-bedroom apartment in Alameda County needs $25,153 a year to pay for rent, food, healthcare, transportation and other basic expenses. To qualify for most assistance programs, a senior must have an annual income near the federal poverty level, now at $10,400.

Such disparity blatantly demonstrates that elders cannot make ends meet with incomes at the poverty line, or even at 200% above the poverty line. As a way to reflect this disparity and advocate for change, UCLA’s Center for Health Policy Research calculated the Elder Economic Security Standard Index (EESSI) which identifies the basic income needed to just get by for retired persons ages 65 and older. It reflects actual costs at the county level and varies by housing type and health status. The annual amounts shown are for individuals and couples who own their residences (with and without a mortgage) and who rent. View the EESSI by county online.

Knowing the true cost of living for older adults is crucial for ensuring that elder Californians can meet basic needs and maintain their independence, as noted by Steven P. Wallace, a professor in the UCLA School of Public Health, associate director of the CHPR, and lead author of the report. The Elder Index provides a new way to assess income adequacy for older adults that is designed to replace the Federal Poverty Level (FPL) in policy and practice.

The FPL, the official federal measure of poverty, is an outdated one. Developed four decades ago and using consumption surveys from the 1950s, the federal measure is based solely on the cost of the basic food budget needed to meet minimum nutritional requirements. Not only does FPL fail to account for the costs of housing and transportation, but it does not include medical costs, which can be particularly debilitating for the elderly. It also fails to account for the higher costs of living in California. The Elder Index, in contrast, provides a calculation of a basic cost of living for retired adults age 65 and older for every California county. The Elder Index takes into account the actual costs for housing, food, transportation, out-of-pocket medical expenses and other necessary spending.

The policy brief on the Elder Index was presented at a legislative hearing in Sacramento earlier this year.

To view this policy brief and other information and tools regarding the Elder Index, see the links listed below.

Federal Poverty Guideline Underestimates Costs of Living for Older Persons in California: provides new information on the basic costs of living for California’s older adults, with details for every county. This UCLA Center for Health Policy Research policy brief introduces the new California Elder Economic Security Standard™ Index.

Elders Living on the Edge: The Impact of California Support Programs When Income Falls Short in Retirement: offers an overview of housing, nutrition, health care, and income policies that can help California’s elders achieve basic economic security. The analysis is by Wider Opportunities for Women, which leads the national Elder Economic Security Initiative™ program.

California Elder Economic Security Initiative™ program (Cal-EESI) information sheet: details the statewide coalition efforts led by the Insight Center for Community Economic Development to improve the economic security of the state’s elders.

Frequently Asked Questions (FAQ): supplies key information about the California Elder Economic Security Initiative and Index.

See press coverage at insightcced.org/index.php?page=cal-eesi-press-room.

Receive more information in the future from the Cal-EESI listserv at insightcced.org/index.php?page=ca-eesi-listserv.

Filed Under: Low-Income Help, News

Previous Post: « Members of Congress hear testimony about consumers’ experiences with Medicare Advantage Plans
Next Post: State and National Bills Introduced to Protect Seniors from Fake Financial Experts »

About Karen Fletcher

Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.

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