For purposes of determining medical indigence, the county shall establish an annual income guideline for the person which is derived as follows:
(1) Using the housing index established in § 28-13-32.6, determine the housing index for the person's county of residence. Multiply the county index by three hundred six dollars, the median gross rent of residences in South Dakota in 1996;
(2) Using the federal poverty guidelines adopted in rules promulgated by the Department of Social Services pursuant to chapter 1-26, determine the federal poverty level for the household size and multiply that figure by one hundred seventy-five percent; and
(3) Add the results of subdivisions (1) and (2) of this section and multiply by twelve.