Regardless of whether a household lives above or below the federal poverty line, it doesn’t necessarily give a clear indication of its ability to afford daily living expenses. The federal government releases annual poverty rates according to the rate of inflation, but actual cost of living varies geographically across the U.S. In Alabama, a high percentage of residents live in poverty, but subsidy programs are available to many households that exceed the federal poverty limit as well.
State Poverty Rates
The U.S. Department of Health and Human Services determines the annual poverty limit to help states determine who is eligible for government subsidies and entitlement programs, such as Medicaid and food stamps. According to the U.S. Census Bureau's 2009 estimate, 17.5 percent of Alabama’s residents live below the federal poverty rate, which is significantly higher than the national poverty average of 14.3 percent. Additionally, nearly half of female-headed households live in poverty in the state.
The federal government and the state of Alabama each provide public entitlements to low-income families to assist with daily living expenses. Many benefits, such as Medicaid and food stamps, have no time limits for coverage and are available as long as enrollees continue to meet program requirements. Other programs, such as the Temporary Assistance for Needy Families cash assistance program, are only available for up to five years in an individual’s lifetime.
Alabama public assistance programs carry differing low-income qualification guidelines, although families that qualify for temporary cash assistance automatically qualify for food stamps as well. Medicaid income limits are not as simple, however, as limits change according to the age and health of the individuals in each household. For example, pregnant women and young children qualify for Medicaid with household incomes of up to 133 percent of the federal poverty limit, while children older than 6 only qualify if their household incomes are less that 100 percent of the federal poverty line.
According to Kristina Scott, executive director of the Alabama Poverty Project, when natural disasters strike, areas of high poverty rates suffer the most due to their lack of resources during and after the disaster. In the past, Alabama suffered from major hurricanes, such as Hurricane Katrina, and in 2011, disaster struck when tornadoes pummeled the state, leaving federally qualifying disaster areas in 36 counties with already high rates of poverty. Though federal emergency aid and charitable assistance is available to many low-income individuals following such disasters, low-income families could be more prepared for natural disasters if they could afford hazard insurance--for which there is no government subsidy.