Kentucky Thinks People Are Poor Because They Don't Know How Bank Accounts Work

By Molly Osberg | January 24, 2018 | 5:49pm

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Last week, when Kentucky announced it would become the first state to impose work requirements on Medicaid recipients, state lawmakers endorsed the idea that people who utilize health services do so because they lack a moral compass. But the state’s new rules also include a bizarre set of educational mandates for people who may be out of work, suggesting lawmakers believe the cycle of poverty is caused by, say, not understanding how an overdraft fee works.

When the state’s rules were approved by the Trump administration, Governor Matt Bevin, who has been pushing for the changes for years, invoked the “dignity” and “opportunity” people would supposedly get by being forced to prove they worked volunteer or job hours so they could retain their basic health care. “I was raised by a father who said, ‘Don’t take something that is not earned,” Bevin told the local media, reciting the longstanding Republican belief that being poor is a matter of individual choice.

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Also included in the rules, in something of an aside, is a truly unfathomable clause about “financial and health care literacy” classes. In Kentucky, if you’re kicked off your coverage because you’re out of work or unable to navigate the bureaucratic nightmare of proving your employment, you could be forced into a pass-fail educational program. This week, when the New York Times asked the state agency responsible for details on the program, the agency admitted it hadn’t been entirely worked out yet, but that it would likely include “household budgeting, opening a checking account, weight management, and chronic disease management” as well as “healthy habits” and “understanding commercial market insurance concepts.”

Kentucky residents looking to regain coverage will be required to pass quizzes on these and other subjects.

As the Times noted, Kentucky’s “literacy” requirements echo racist voter registration laws in the Jim Crow south, and will likely punish people with language barriers and low education levels. There are no standard definitions for “healthy habits,” and most Americans—even those with higher incomes—have trouble with basic financial literacy tests, which generally include questions about mortgages and interest rates.

But these tests are rooted in an even more malicious logic: The idea that it is a lack of “knowledge,” rather than cyclical, institutional failures such as finding yourself both jobless and saddled with medical debt, that keep people from clawing their way into the middle class.

The Times story, which was written by Austin Frakt, a healthcare policy wonk and professor at Boston University, runs through some standard options for what could be included in the classes—though since Kentucky still has not provided any clarity, we don’t know for sure what will make the final cut.

Ironically, these subjects, while ostensibly framed as issues of personal responsibility, wind up showing only how predatory institutions make (and keep) people both poor and sick.

One is the subject of mortgages and lending rates—two things managed by industries that intentionally obscure risk or straight-up lie, particularly when it comes to low-income borrowers and communities of color. Another is how medical testing and billing works—a famously opaque process that trips up even people with insurance. Self-management for chronic issues such as diabetes also made the list. It’s a disease that overwhelmingly afflicts people who live in poverty, and which studies suggest is linked to the stress and isolation of not having money, the high cost of healthy food, and out-of-pocket costs for such basics as blood sugar testing strips. Even something as basic as opening a bank account can be disastrous when you’re living without a steady paycheck: As has been proven endlessly, financial counseling has little impact when banks disproportionately charge low-balance account holders with relentless and insane overdraft fees.

All of which is to say: If Kentucky wanted its people to live with dignity, there are many more glaring examples of people taking what they haven’t earned.