Changes to federal poverty guidelines could cause millions to lose eligibility

OAKLAND, Calif. (KTVU) - The Trump administration is considering a change to the way the federal poverty line is calculated, and that could make millions of Californians ineligible for federal aid including Medi-Cal, health insurance subsidies, the food stamps, and dozens of other federal assistance programs.

For many people, it is difficult to make ends meet in the Bay Area regardless of your salary.

"Mostly our groceries and rent...those are our biggest expenses every month," said Meriane Morselli, an Oakland resident.

Surviving if you're on or below the federal poverty line can feel nearly impossible. 

"That would be me. I make $900 a month. And that's what I struggle to live on," said Art Jackson of Oakland who says he used to be a UPS mechanic until he hurt his foot.

The 2019 federal poverty line is $12,490 dollar in annual income for a single person, $25,750 for a family of four.

On May 7th, the Trump administration announced it would be considering a change in the formula for defining the poverty level. 

Currently the government uses the standard Consumer Price Index or CPI to adjust the federal poverty line for inflation. Now, the Office of Management and Budget says it could change to a lower Chained Consumer Price Index or C-CPI standard. The C-CPI is based on a premise that consumers adjust their spending and substitute cheaper items for more expensive items. 

"I think that this is a change that really shouldn't be put in place," said Ian Eve Perry, a researcher at the U.C. Berkeley Labor Center who analyzed the Trump administration's proposal.

Perry says the C-CPI would mean smaller and smaller increases to the federal poverty line to adjust for inflation, and that could gradually make millions of Californians ineligible for federal aid. 

Perry's analysis showed if the change takes effect in 2021, 30,000 adults and 30,000 children on Medi-Cal would lose eligibility

One million people or more on Covered California health insurance, the state's Affordable Care Act program, would either lose or have smaller subsidies.

Also, 3.7 million Californians on CalFresh, the state's food stamp program, could lose food subsidies

Researchers say the poverty line formula is outdated and should be revised.

"The way that we calculate poverty now is actually based on a technique that was developed in the 1960's and it's primarily just based on the cost of food for people. These more modern techniques take into account rent, health care costs, child care. Things that are totally ignored in the current poverty threshold," said Perry, adding that if anything, the poverty line should be increased. 

For some people in poverty, losing that aid could be devastating.

"It would mean eating less and having to use other food sources,' said Lulu Light, a low-income Oakland resident.

Art Jackson knows the pain of poverty firsthand and says housing costs should be included in federal poverty line calculations. He was living in Hayward when he was told his rent would double under new owners.

"They raised the rent from $1,500 to $2,400," said Jackson, "I think it's utterly ridiculous. And I think some of these people who think you can live off that type of wage and get on that type of wage and see how they do."

The Office of Management and Budget will be accepting public comment on the proposed change to the federal poverty line calculations. 

The deadline for public comment is Friday June 21st.