The Census Bureau’s latest headline numbers on income, poverty and health insurance received wide coverage: The poverty rate fell in 2013 while real (inflation-adjusted) median household income was little changed and the share of Americans without health insurance coverage fell. Here’s a look behind the headlines, courtesy of my Center on Budget and Policy Priorities colleagues’ deep dive into the Census reports, and a few reminders about how better policy could produce better results.

A significant drop in poverty is always welcome, but last year’s decrease was only the second statistically significant one in 13 years (see chart). Moreover, at 14.5 percent the 2013 poverty rate was still a full two percentage points higher than in 2007, before the Great Recession, and 45.3 million Americans were poor last year. Similarly, real median household income (the dividing line between the richer half of households and the poorer half) was little changed from 2012 and 8 percent lower than it was in 2007.



U.S. Census Bureau/Center on Budget and Policy Priorities

As I argued previously here, our austere budget policies of recent years have dragged out the jobs slump that followed the recession. That’s an important reason why median incomes stayed flat last year and the poverty rate did not drop more.

We shouldn’t be surprised that in an economic recovery that has left workers behind, the Census data show income inequality remaining historically high. CBPP reports that the share of the nation’s income going to the bottom fifth of households (3.2 percent) is tied for the lowest level on record, while median income of the top fifth of households was more than 12 times higher than that of the bottom fifth for the first time on record, with data back to 1967.

The Census data also strengthen the case for expanding the Earned Income Tax Credit for childless adults (including non-custodial parents), the lone group that the federal tax system taxes into poverty. As CBPP highlights, the poverty and income trends for families with children and those for families and individuals without them diverged significantly (see chart). For the former, both poverty and income improved last year. For the latter, poverty reached its highest rates in over 30 years.



U.S. Census Bureau/Center on Budget and Policy Priorities

As for health insurance, the Census data show a slight decline in the share of Americans without health coverage in 2013 , but the real action for health insurance coverage begins this year. CBPP points to preliminary data from the Centers for Disease Control and Prevention – the first government survey data that reflect the early impact of health reform’s coverage expansions (the Medicaid expansion and subsidized marketplace coverage) – showing that the number of uninsured fell by 3.8 million in the first quarter of 2014.

That’s the good news on health insurance. The bad news, as CBPP points out, is that the coverage gap between states that have expanded Medicaid and those that have not is widening.

The Census data for 2013 – before the expansions took effect – show that there was already a coverage gap between the 27 expansion states (including Washington, D.C.), where 14.1 percent were uninsured, and the 24 non-expansion states where 17.3 percent were uninsured. The uninsured rate likely will drop much more in 2014 in expansion states, where the expansions will raise coverage among low-income adults, than in non-expansion states.

Figures for the first part of 2014 bear this out. Preliminary CDC data (see chart) show that the uninsured rate for non-elderly adults fell 2.7 percentage points in expansion states (from 18.4 to 15.7 percent) but only 1.2 percentage points in non-expansion states (from 22.7 to 21.5 percent).



U.S. Census Bureau/Center on Budget and Policy Priorities