Economist: Census poverty data masks expected blows

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(Minnesota News Connection)
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Minnesotans have until September 30 to make use of a digital tool to help households navigate new Medicaid work requirements. Meanwhile, federal safety net program cuts are on the minds of economists with new financial well-being data out.

The U.S. Census Bureau has released its annual summary of household income, poverty and health coverage. Median incomes last year topped $87,000, the highest on record, while the official poverty rate fell to 10.2% but the holistic poverty rate was unchanged.

Steven Durlauf, professor of public policy and director of the Stone Center for Research on Wealth Inequality and Mobility at the University of Chicago, said 2025's tax and policy bill, House Resolution 1, is not yet showing up in the numbers.

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"These data do not fully capture the ways in which Medicaid and SNAP have been reduced and so I expect those numbers to get worse next year," Durlauf explained.

He warned energy price shocks have yet to fully play out and inflationary pressure continues to overshadow positive wage growth, especially for lower-income brackets. The new Medicaid work requirements begin January 1, and the Minnesota Department of Human Services has an online portal for enrollees to determine how they are affected. The changes are forecast to push 140,000 Minnesotans off Medicaid in the coming years.

Durlauf said it is troubling to see the supplemental poverty rate, which factors in non-cash assets and spending on necessities, still hovering around 13%.

"That is indicative of something which we sort of already know, which is that the nature of poverty in the United States is very persistent," Durlauf observed.

As for the Medicaid navigation tool, state officials said it may make the 2027 renewal process easier with less paperwork. Once it goes away at the end of the month, enrollees may need to call or visit their county, tribe or the Minnesota Department of Human Services to report possible exemptions or qualifying activities meeting the requirements.