Despite the success of Obamacare and the expansion of government medical programs like Medicaid and Medicare, out of pocket medical costs still force people into poverty. According to the US Census Bureau 11.2 million people fell below the poverty line in 2015 due directly to out of pocket medical expenses. This drove up the supplemental poverty rate by 3.5%. Interestingly this is occurring while the number of people without health insurance has declined. Currently 45.6 million people in total live below the poverty line in the US.
The traditional measurement of poverty was established in the 1960s. It was originally set at three times the cost of food (pegged at 30% of income) then adjusted for the rate of inflation. It takes into account wages and government benefits like social security. However it does not take into account programs like food stamps and certain tax credits or changes in spending habits, taxes, work expenses, or medical expenses and is not adjusted for changes in the standard of living. This means the poverty rate you’re used to hearing about is inaccurate at best.
In addition to the traditional poverty rate, the Census Bureau releases another figure called the supplemental poverty measure or (SPM). The SPM is a modern and more accurate measure of poverty. It takes into account not only food costs but clothing, shelter and utilities as well. It also accounts for income not just taking into account cash income from work or government programs, but also taxes, work expenses, medical expenses, and geographic differences in housing costs. The result usually ends up being a poverty level slightly higher than the traditional standard.
This number may be shocking but it hasn’t really changed in recent years. It just continues to show that for millions of Americans particularly those living on low incomes, medical costs continue to be a major financial burden. One way to reduce this burden is personal importation. By ordering prescription medications from reputable online pharmacies Americans can at least reduce the financial burden of high drug prices and save money. People should not fall into poverty due to medical expenses.