Missoulian - State's poverty rate up slightly

More than 4,000 Montanans slipped into poverty last year, joining a statewide demographic now more than 130,400 residents strong.

Montana's poverty rate increased slightly last year, to 14.4 percent, even as the state's median household income continued to rise, according to U.S. Census Bureau reports released Tuesday.

With a median household income of $39,301 in 2005, Montana was one of 28 states and districts in the nation to clock in below the national average of $46,326. It was one of only a handful of Western states to list household incomes below the national average, along with Arizona, Idaho, New Mexico and Oregon.

Seven other Western states - Alaska, California, Colorado, Hawaii, Nevada, Utah and Washington - boasted median incomes above the national average, while Wyoming's was roughly equal to the national average.

One Census Bureau report also revealed that Montana has the lowest median household income in the region; surrounding states all claim annual household incomes of more than $40,000. In fact, Montana ranked 10th from the bottom in a national comparison.

Here's the good news: That's actually much better than the fifth-from-last-place ranking Montana earned just a few years ago, when the state's median household income was $34,449.

The Census Bureau reports, which compiled data gleaned from the bureau's 2005 Current Population and American Community surveys, showed that real median household income in the United States rose by 1.1 percent between 2004 and 2005 - the first year since 1999 in which the nation's real median household income showed an annual increase.

They also found that the nation's official poverty rate has been holding steady for the past three years at 12.6 percent. The Census Bureau used a blanket definition of poverty from the Office of Management and Budget, updated for inflation using the Consumer Price Index, that set the average poverty threshold for a family of four at $19,971. For a family of two, the threshold was $12,755, and for unrelated individuals the threshold was $9,973.

New Hampshire had the lowest poverty rate in the nation, at 7.5 percent. Mississippi had the highest, at 21.3 percent.

Montana's poverty rate of 14.4 percent placed it 15th from the bottom in a national ranking. The state's poverty rate has not changed significantly for years.

In 1979, the percentage of Montanans living in poverty was 12.3 percent. In 1989 it was 16.1 percent, and in 1999 it was 14.6 percent, said Larry Swanson, director of the O'Connor Center for the Rocky Mountain West on the University of Montana campus.

“We're moving pretty much laterally,” Swanson said.

Montana's poverty rate saw a slight increase at the end of the '90s, a period of economic deterioration, he added. The state's economy was restructuring for fairly rapid growth in a new direction - away from an economy based on natural resource extraction and toward an economy based on services, health care and construction.

“We've had a relatively strong economy in Montana, and Montana has had a fairly strong income growth,” Swanson said. “What's disappointing when you look at these income figures is that we don't have incomes as a percent growing and then improving these overall poverty statistics.”

However, it's in line with a nationwide trend in which incomes are expanding - most notably at the upper end of the wealth distribution chart - but poverty is not reducing, he said.

The Montana poverty rate has traditionally tended to be a few percentage points above the national rate - which, Swanson noted, isn't adjusted to consider variations in the cost of living and consequently tends to overestimate poverty in urban areas while underestimating poverty in rural areas.

One Census Bureau report found that, on a three-year average, Montana has one of the highest uninsured rates in the nation. In fact, with its uninsured rate of 18.1, Montana is tied for sixth place with Louisiana.

Minnesota had the lowest uninsured rate, at 8.7 percent, and Texas had the highest, at 24.6 percent.

Nationally, the number of people with health insurance increased from 245.9 million in 2004 to 247.3 million in 2005. At the same time, the percentage of Americans lacking health insurance increased from 15.6 percent to 15.9 percent.

This means that, at last count, 46.6 million Americans are going without health care coverage.

The new Census Bureau reports also include a comparison of earnings for men and women, and found that men's median earnings were higher than women's in every state and the District of Columbia.

Men in the United States have median earnings of $41,965. Women's median earnings are about 76.7 percent of that, or $32,168.

In Montana, the gap was even greater: The state's median income for men was $35,728, while women's was $25,177 - or 70.5 percent of the median income for men.

Reporter Tyler Christensen can be reached at 523-5215 or at tyler.christensen@lee.net

New CHIP contract means more openings

By MIKE DENNISON of the Missoulian State Bureau

HELENA - The state plans to ink a new contract with Blue Cross/Blue Shield to manage the publicly funded Children's Health Insurance Program, creating as many as 1,000 new slots to cover kids from low-income families.

The new contract offers a “significant savings” over Blue Cross' current price to cover children on the CHIP program, thus freeing up more money to expand coverage, said Jackie Forba, chief of the state Health Resources Bureau.

“I think it's great for uninsured kids,” she said Monday. “Additional kids will be able to be enrolled and more of our dollars will be providing health care for kids, and less will go to administrative costs.”

CHIP currently provides health insurance to 13,170 kids whose families earn up to 150 percent of the federal poverty level, or $19,800 for a family of two.

Advocates for CHIP hailed the new contract as a step in the right direction, but said the state can save even more money if it would take over administration of the program entirely.

“I'm very happy with (the new contract),” said Rep. Mary Caferro, D-Helena. “(But) it's still our goal that CHIP will be a fully public product. That way even more children will have access to health care.”

Caferro and others have been arguing for more than two years that Blue Cross, the state's largest health insurer, was extracting too much profit from the CHIP contract, keeping as much as 20 percent for administrative costs.

Blue Cross agreed to return some of that money to the state, but company officials said the firm deserved to profit on the contract because it was assuming the risk.

Under the new contract, Blue Cross will process insurance claims for kids on CHIP, but the state will assume the risk.

That means if the cost of claims exceeds the amount of money for the program, the state is on the hook for covering the cost. However, an overrun hasn't occurred since the program began in 1999.

Forba said the state will be paying Blue Cross less for the new administrative contract, but that the final details have yet to be negotiated. The current contract expires next month.

Blue Cross officials familiar with the contract could not be reached for comment Monday.

CHIP is a federal-state program that offers health insurance to kids who are not eligible for any other assistance programs. The federal government covers 80 percent of the program costs.

The 2005 Montana Legislature voted to expand CHIP, upping state funding and the federal match to finance an additional 3,000 slots in the program. The program insured about 10,900 kids at the time.

As more money becomes available for CHIP, the state should consider increasing the income ceiling for eligibility, Caferro said.

“It's a good use of tax dollars,” she said, noting that every state dollar spent on CHIP brings in $4 of federal money, while insuring children who otherwise don't have health coverage.

Sen. Mike Cooney, D-Helena, who sponsored a bill last year to increase the CHIP eligibility, said he'll consider introducing a similar bill at the 2007 Legislature, if he's re-elected.

The bill gave the state the power to increase CHIP eligibility if enough money is available to cover more kids.

“I have great faith that (the state) would be able to manage something like that very successfully, and I'd like to give them the tools to do it,” he said Monday.

“We know that if we go a little bit above 150 percent (of the federal poverty level), we can start helping a good chunk of the population that desperately needs health care.”

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