The Effect of Elevating the Supplemental Poverty Measure on Government Program Eligibility and Spending

Abstract

Abstract A recent National Academy of Sciences report recommends elevating the Supplemental Poverty Measure (SPM) to the “nation’s headline poverty statistic.” I project how making the SPM the official poverty measure would affect eligibility for government assistance programs whose eligibility thresholds are tied to the official poverty line. Making the SPM the official poverty measure would increase the poverty line for a family of four by 20 percent in 2024. The eligibility threshold for a family of four would consequentially increase by $8320 for the Supplemental Nutrition Assistance Program (SNAP), $8512 for Medicaid adults, and by larger amounts for Medicare Part D Low Income Subsidies, the National School Lunch Program, and Affordable Care Act premium subsidies (once temporarily relaxed eligibility rules are restored in 2026). Effects on eligibility thresholds would grow over time because the SPM thresholds grow faster over time than the current official thresholds. As a result of the higher eligibility thresholds, I estimate that in 2024 SNAP would cover 2.0 million additional households with spending rising by $2.6 billion, and that Medicaid would cover 1.3 million additional recipients with spending rising by $5.6 billion.