In 2012, Indiana was ranked 40th for its lack of providing health care to low-income residents by the Corporation for Enterprise Development. This ranking resulted from comparing the disparity in health care coverage between the bottom 20-percent of low-income residents and upper-income residents, according to the advocacy group.

In Indiana, 5.1 percent of those in the top income brackets were uninsured, compared to 24.6 percent in the lowest income bracket, the group said. In other words, the poorest 20 percent of Indiana residents were more than four times as likely to have no insurance as the top 20 percent.

The Corporation for Enterprise Development is a nonprofit organization that advocates for programs it believes can assist low- and moderate-income households increase and protect their financial assets.

The group said Indiana also seems to be badly lagging some of its neighbors in responding to its children’s health needs. The group found the percentage of Indiana’s uninsured low-income children — 11.6 percent — was more than twice as high as those in neighboring Illinois and Michigan.

Indiana, its governor fearful the federal government will not provide adequate future funding, declined to extend the federal Medicaid health care program to an estimated 300,000 low-income Hoosiers with no insurance, as part of the 2010 Affordable Care Act, also known as Obamacare.

Republican Gov. Mike Pence’s stance not to expand Medicaid in Indiana has set Indiana apart from many of its Midwest neighbors. Illinois, Michigan, Ohio, Kentucky and Minnesota have all joined the expanded health care program for the poor and elderly that gives states federal dollars to cover individuals making up to 133 percent of the federal poverty level.

“We are not extremely generous, let’s put it that way,” said Katharine Byers, co-director of The Institute for Family and Social Responsibility at Indiana University.

“I think in some ways there’s kind of a political ‘let’s beat up on poor people’ attitude,” she said.

State Sen. Ed Charbonneau, R-Valparaiso, said beyond the debate over Medicaid expansion is the real-world issue of providing health care to those in need.

The former president and chief executive officer of Methodist Hospitals is hoping that at some point the state can take care of many of these people through an agreement with the federal government to expand its Healthy Indiana Program.

THE WORKING POOR

The majority of the poor are employed. The minimum wage alone is not enough to lift some people out of poverty; for some service workers, even getting to the minimum wage can be a struggle.

“It’s not your grandmother’s poverty, anymore,” said Jodie Levin-Epstein, deputy director of the Center for Law and Social Policy.

According to the center, 66 percent of families with children that fall below the poverty level have at least one member who works: 40 percent of these families have a family member with a full-time job; 26 percent have at least one member who works part time.

Anna Schoon, director of business development for Northwest Indiana Community Action, said that also is true with the population her agency serves in Northwest Indiana.

“Most of them are employed,” Schoon said.

Levin-Epstein said some federal poverty programs like the Supplemental Nutrition Assistance Program have done a good job helping low-income residents.

Levin-Epstein said the bigger problem is, even when those who rely on assistance are able to find work, the jobs are not enough to lift them out of poverty.

In addition to low wages, the jobs may not provide workers with enough hours — or, in some cases, not pay them for the hours they do work. The latter situation, also known as wage theft, can be tough to police, according poverty advocates.

According to the Corporation for Enterprise Development, 43.2 percent of Indiana’s families are asset-poor, meaning they only have enough savings to last for three months if they were to become unemployed.

Levin-Epstein believes part of the problem has to do with the change in the economy as more jobs shifted from manufacturing to the service sector.

For some jobs, the minimum wage hasn’t been raised since 1991. The wage for waiters and waitresses is $2.13 per hour, with the idea they can make additional money through tips. Seven states, including Minnesota, have raised the minimum wage for those workers to the same level it is for other workers.

State Sen. Charbonneau notes that some will argue a minimum wage increase could result in throwing additional people out of work as companies look for savings to pay the higher wages. Before he would vote to raise the rate he said he would want to hear a lot more from the two camps on the issue. 

Those living paycheck to paycheck may have few options when faced with an emergency need for cash. One option is payday loan services. The rates charged by such services have been a bone of contention.

“Some states regulate how much the predatory lenders can charge,” said Jennifer Brooks, director of state and local policy for the Corporation for Enterprise Development, who believes the maximum is more than 36 percent.

Northwest Indiana Community Action’s Schoon said even 36 percent is high, but at least it’s not 300 percent, which some lenders reportedly charge.

However, Amy Cantu, a spokeswoman for the Community Financial Services Association, argues the restrictions on payday loans can have unintended consequences.

A payday loan may charge $15 for a two-week loan of $100, which Cantu said is cheaper than an overdraft fee of $36, or more that some consumers might face if they were not able to get the payday loan.

She said a 36 percent rate would only allow for a $4.14 return on a $300 loan, and no one is going to make that type of loan. Imposing such restrictions can cause the payday loan firms to leave and drive consumers to unregulated, online lenders for money, Cantu said.

Indiana does not regulate payday loans to this extent, although it does regulate rates on loans backed by individual’s auto titles. Illinois does not regulate either one.

CHARGING THE POOR

Two of the biggest federal programs to serve the poor are the Temporary Cash Assistance for Needy Families program, called TANF, and the Supplemental Nutrition Assistance Program, called SNAP, which was previously known as the food stamp program. In Indiana, and other states, bank fees can decrease the amount actually going to low-income residents.

Such benefits are often paid using an Electronic Benefits Transfer card that can be used at an ATM. Brooks, of the enterprise development group, said the state will contract with banks to offer the cards, and the state has discretion in regulating what type of rates will be charged.

“In Indiana, there is apparently no regulation on what type of fee the bank can charge for these withdrawals, which reduces the amount of money going to the poor,” Brooks said.

Over the last two years, most states have improved their unemployment cards by eliminating overdraft fees and reducing many point-of-service and ATM fees, according to the enterprise development group. While 42 states offer the cards, Indiana is one of five states that requires workers to receive benefits only through the prepaid card, according to the organization.

The enterprise development group contends this violates federal law, which prohibits requiring consumers to have an account at a particular institution to receive public benefits.

Of the five states that require such cards, California offers the best ones, which allow for multiple free ways to access cash, including through some out-of-network ATMS as well as no penalty fees, the group said.

The Temporary Cash Assistance for Needy Families has remained stable in Indiana for several years, amounting to $288 per month for a family of three. Some states, such as Texas and Connecticut, have chosen to supplement the amount and tie increases to indexes such as the consumer price index.

“I think attaching it to some external factor is always a good idea,” Brooks, of the enterprise development group, said.

By comparison, while Indiana does not tie its assistance for needy families to an index, it does tie legislators’ per diems to the federal index. The current per diem for a state legislator’s expenses is $156 per day during session.

Minnesota, like many other states, also has kept its TANF benefits the same, but its base is $532, compared to $288 per month for Indiana. It also recently elected to provide $110 per month in housing assistance to begin in July 2015.

Some states have actually decreased TANF benefits, including Arizona, which went to $278 from $347, and Washington, which went to $478 from $546. 

Temporary assistance for needy families is so small, less than 20 percent of the federal poverty level in Indiana, that people aren’t staying on the program just for the money, said Scott Allard, associate professor with the school of social service administration at the University of Chicago.

“It is so small compared to what you need to live on,” he said.

Unlike funding education, Allard said there is probably not going to be a return to the taxpayer for their investment. In such cases, residents of the state need to consider what their moral obligation is to provide such assistance, he said.

DEPLETING THE POOR

Many states have what is known as an “asset test” that requires individuals in some states like Indiana to reduce their assets, or savings, to low levels to qualify for various benefits.

“In states that look at assets, you may have to spend down all your long-term savings to get the benefits,” said Brooks, of the Corporation for Enterprise Development.

“It sends a message that you can’t save at all” and is contrary to the express goals of the programs, she said.

Indiana still has an asset test in place for both TANF and SNAP. Thirty-six states have gotten rid of the asset test for the food assistance program. Eight states, including recently Illinois, have gotten rid of the asset test for the temporary cash assistance program.

In Indiana, to get federal cash assistance, new applicants can have only $1,000 in assets, and existing clients can have only $1,500 in assets. For the food assistance program, the asset limit is $2,000, or $3,250 if the household includes an elderly or disabled individual.

There are asset exemptions in both cases. For instance, a family can have one vehicle worth less than $5,000.

“It certainly does not serve anyone’s long-term interest to have them be devastated before they are eligible for benefits,” said Northwest Indiana Community Action’s Schoon.

Michigan has bucked the recent trend of states getting rid of the tests and actually reinstated it for the food assistance program after a scandal in which lottery winners were found to be still receiving the benefits. Brooks said her enterprise development organization thinks the state overreacted. She said all the state needed to do was say that lottery winnings should be treated as income when it comes to the benefits.

A HEALTHY WORKPLACE

It can be difficult for many of the working poor to take off work to care for themselves or their children. Some states and communities require paid time off for employers of a certain size, and many have pre-school programs that take care of young children of low-income workers.

Jodie Levin-Epstein, deputy director of the Center for Law and Social Policy, said poor people need to be able to go to work — and there are many issues to address when it comes to the workplace.

Being able to work may mean finding someone to take care of your child. She notes Indiana is one of 10 states with no state-funded pre-school program, although the General Assembly authorized a small pilot program in five counties this year.

When it comes to early education, the University of Chicago’s Allard said there is ample evidence that such investments can reap great taxpayer returns.

In many cases, jobs do not provide paid days off when a parent or child is sick. Connecticut as well as some other cities around the nation require companies of a certain size to provide some paid time off, Levin-Epstein said.

“It’s a way bigger topic than … in the past,” said Levin-Epstein, who adds that such a policy is not going to cost the government anything.

Schoon, of Northwest Indiana Community Action, said the loss of wages that can result due to the lack of paid sick time can have a ripple effect through the lives of a low-income family.

“In my opinion, it is unrealistic to not take care of people, full-time people, who are going to get sick or going to need sick time during the year,” she said.

Byers, a co-director with The Institute for Family and Social Responsibility at Indiana University, said if she is eating out in a restaurant, “I really want that person to be healthy. I don’t want them to be coughing over my food.”

Indiana does not require companies to provide any paid time off. Conversely, the state passed legislation prohibiting communities from imposing such requirements on companies.

The Family Medical Leave Act allowing up to 12 weeks off work “is a big benefit,” said Levin-Epstein, “but not to people who can’t afford to take it.”

She said there is a bill in Congress to create paid family leave, while three states already require paid medical leave.

The Family Medical Leave Act only covers some workers — those who work for firms with 50 or more employers, those who have longer tenure, or have worked at least 1,250 annual hours.

THE TAX REFUND

The earned income tax credit is a federal program that can provide a cash refund to low- and moderate-income workers. In addition, some states provide their own tax credit equal to a percentage of the federal credit.

Brooks, of the Corporation for Enterprise Development, said the state needs to be more generous when it comes to providing income tax relief for economically disadvantaged residents.

The earned income tax credit is cited as one of the biggest means to aid low-income residents. In cases where the credit is more than the income earned, it can mean a direct payment to qualifying individuals and families.

“It has a substantial impact in lifting people out of poverty,” Brooks said.

Indiana is among about half the states that help supplement this credit by providing an additional proportional tax break of 9 percent. Brooks’ organization, however, believes the state’s tax credit should be at least 15 percent of the federal tax credit. In Minnesota, the rate can be between 25 to 45 percent depending on the poverty rate.

Illinois went to 10 percent from 5 percent in 2011, and there has been a proposal to increase it in phases over four years to 20 percent.

According to Brooks, based on conversations with advocates and others, a 15 percent figure is what her organization believes would be meaningful in terms of having an impact on low-income families and feasible to implement. 

Some low-income Indiana residents may not even enjoy the full benefit of the low-income tax credit, because the state does not regulate tax preparers, according to Brooks’ organization.

Brooks said that in some cases, preparers will offer tax anticipation checks to low-income residents. Minnesota does not allow for additional fees to be charged for these anticipation checks.

Schoon, of Northwest Indiana Community Action, said her agency definitely discourages people from getting these types of advances because of the exorbitant fees they can charge. 

“It’s just another industry that benefits on the back of poor people,” she said.

The agency does operate a Voluntary Income Tax Assistance program that allows low-income residents to avoid such charges. The demand for the volunteer assistance program, however, definitely outweighs the manpower available, Schoon said.

According to the Corporation for Enterprise Development, only California, Maryland and Oregon regulate tax preparers, and seven states, including Illinois and Minnesota, prohibit add-on fees to products that allow consumers to deduct payments for tax services from their refunds.