Julie Miller
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Millions of people's lives have been influenced by the work of Mollie Orshansky, even though very few people know who she
is. Dozens of health-related programs throughout history have benefitted from Mollie's contributions, including programs through
HHS, charitable agencies, private companies and managed care. In 1963, it was Mollie—an accomplished mathematical genius and
daughter of a poor immigrant family—who developed the U.S. government's official measure of poverty and the guidelines for
what we call the Federal Poverty Level (FPL) today.
While working for the Social Security Administration, she used the cost of a "nutritionally adequate diet" as the foundation
for a family's cost-of-living expenses, knowing that the U.S. Department of Agriculture, where she had worked for 13 years,
had established that a typical American family spent one-third of its income on food. She multiplied the cost of food by three
and established thresholds. In 1965, the poverty level for a family of four was $3,130; in 1975, it was $5,050; in 1985, $10,650;
and in 1995, $15,150. This year's Federal Poverty Level is $20,650 for a family of four.
The emerging universal coverage proposals aimed at establishing health coverage for the poor and the uninsured use the FPL
and percentages of it as a qualifier for subsidies, which makes sense since it's already tied to so many social and health
programs. A little foresight might be in order, however, because critics of the FPL formula continue to challenge its accuracy.
Even though the cost of living varies greatly from city to city, the poverty thresholds are uniform across the country. The
level applied to rural Kansas is the same as the level in metro New York. Likewise, poverty figures for trend measurement
don't distinguish temporary financial struggles, such as a short-term job loss, from chronic hardship. Mollie didn't need
to take into account families where both parents work, day-care expenses, gas prices and taxes, but these issues are heavy
burdens on today's moms and dads. These and other sticking points have kept the debate over Mollie's formula going for years.
Alternative measures are being tested, but with no definitive plans to make changes, at least not yet. Obviously, there are
profound economic, social and political consequences tied to how we as a country define poverty. Clearly, any health program
or coverage qualifier based on the FPL stands to be affected by significant changes in the formula. Health plans and other
payers are wise to keep an eye on this debate.
IRONIC TWIST
Mollie herself, who contributed so much to family welfare, experienced the distress of a broken system a few years ago. As
her health began to decline, a caseworker with Adult Protective Services took Mollie against her will to a hospital and began
guardianship proceedings, in spite of the fact that Mollie's niece served as a proxy with legal authority to make her healthcare
decisions. A long legal battle ensued, Mollie was forced to stay in a hospital room (until her niece snuck her out), and in
the end, a judge was charged with abuse of discretion. So where is she now? To the best of my knowledge, Mollie, who is in
her 90s, is being well cared for by her family and home-care nurses in a New York apartment, which, fortunately, is exactly
what she wanted.
Julie Miller is editor-in-chief of MANAGED HEALTHCARE EXECUTIVE. She can be reached at julie.miller@advanstar.com
