CFED Scorecard

Kentucky ranks poorly in financial security and jobs, high in health care access

Catilin Bowling
Inside Louisville
Jan 25, 2016

Like the broader United States, Kentucky is seeing signs that the economy is improving.

Home sales are up across the state; its unemployment rate is at 5 percent, 0.5 percentage points below the national average; and generally, people seem more confident in the economy.

However, a recently released study by Washington, D.C.-based nonprofit Corporation for Enterprise Development found that some U.S. residents are being left behind.

“There certainly are positive signs that the nation’s economy is improving,” Andrea Levere, CFED’s president, said in a news release. “But there also is very compelling evidence that many households are stuck in a financial hole and are struggling to dig themselves out.” In Kentucky, 52 percent of households live in financial insecurity and are unable to save money in the event of an emergency, CFED reported. Also, nearly 31 percent of the state’s jobs are considered low-wage, below the poverty line positions, compared to 25.6 percent nationally.

CFED conducts an annual study that ranks the states and Washington, D.C., based on jobs, finances, education, housing and health care. In 2015, Kentucky dropped six places to 44th.

The information used to develop the scores is taken from 61, mostly public, sources such as the U.S Census Bureau, according to its website. However, the nonprofit also purchases some private data including foreclosures and delinquent mortgages from the Mortgage Bankers Association.

The lack of financial security and low-paying jobs no doubt connect to the fact that only 22.2 percent of Kentucky residents graduate from a four-year college and 29.9 percent graduate from a two-year college, CFED reported. Those who do graduate also are more likely than students in other states to default on their student loans; Kentucky has the third highest rate of defaults in the country.

And sales at businesses owned by white residents are 2.3 times higher than those at businesses owned by resident of other races. Sales at male-owned businesses in Kentucky are 3.2 times higher than those at women-owned businesses.

“The research …found that state policies area doing little to improve the financial security of Kentucky residents,” the release states, adding that black and Latino residents are more greatly impacted.

Holden Weisman, state and local policy manager at CFED, identified several policy changes that the nonprofit believes could help. Kentucky leaders should lift asset limits on welfare programs TANF (Temporary Assistance to Needy Families) and LIHEAP (Low Income Home Energy Assistance Program) as it already has done for its food stamps program, he told Insider Louisville.

In Kentucky, residents with $2,000 or more in assets aren’t eligible for TANF. The same applies for LIHEAP, with an exception for people with catastrophic illnesses. Proponents of assets tests say it helps prevent welfare abuse, while opponents say it discourages struggling families from saving any money for fear of losing the help.

Weisman also suggested the state implement an Earned Income Tax Credit, a credit for low- and middle-income individuals and families, and pass stronger legislation protecting residents from payday lending and other high-cost loans.

The report on Kentucky wasn’t all bad, however.

The state ranked 18th overall in terms access to health care. A big factor in the ranking is that less than 10 percent of its population remains uninsured and only 5.2 percent of children remain uninsured.

Kentucky was one of 13 states to set up its own health care exchange, Kynect. However, new Gov. Matt Bevin has declared his intent to dissolve the state-run exchange.

People will need to change over to the federally run exchange, but it is unclear if that will impact the number of insured Kentuckians, Weisman said.

He applauded Bevin for pulling back on his campaign promise to dismantle a Medicaid expansion that provided health insurance to an additional 400,000 Kentuckians.

“We really would like to continue to point to Kentucky as a model of a state working hard to implement good policies for its low- and middle-income residents, particularly on the health care front,” Weisman said. “We would caution against making too many drastic changes.”

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