Despite Pandemic, Poverty Declined Thanks To Stimulus Checks

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Incomes rose and poverty fell as stimulus payments approved by Congress last year, while health insurance levels remained stagnant.

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The coronavirus pandemic threw millions of Americans into unemployment last year, causing the first drop in household income since 2011, according to a new report from the US Census Bureau.

But even though the official poverty rate also increased, a complementary measure that accounts for stimulus payments found that poverty actually fell while incomes increased.


In other words, the public health disaster was not an economic disaster, or at least one, thanks to government programs that provided aid to the people. Government programs providing people with health insurance probably helped people as well, though the evidence on that is a bit vague.

Shortly after the first coronavirus cases were confirmed in the US, Congress enacted the Coronavirus Aid, Relief and Economic Security Act, providing massive payroll subsidies for small businesses, the largest-ever expansion of unemployment insurance, and an unprecedented $1,200 relief. Payment done. For the vast majority of American adults.

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Stimulus payments, in particular, had a major impact, increasing incomes by 4% and lifting more than 11 million households above the poverty line, for a 2.6 percent reduction in the poverty rate to 9.1%. Census Bureau Supplemental Poverty Measures.

NS official poverty rate measure, which excludes payments because they were technically tax credits, increased 1 percentage point to 11.4%, while median income for households, not counting payments, decreased 2.9% to $67,521.

It wasn’t the first time Congress sent stimulus payments, but it was the first time lawmakers also sent payments to families who had no income, meaning the money was particularly useful in pushing households above the poverty line. was effective.

Congress followed up the CARES Act payment with a round of $600 checks in December and then $1,400 earlier this year. The payments proved popular, and Democrats this year instituted a recurring monthly check of $300 per child for most families.

Now Democrats are hoping to continue child payments until 2025, but they face some opposition from members of their own party. And Sen. Joe Manchin (DW.Va.), a major vote in the Senate, said Sunday he doesn’t think families with no work income should be eligible for pay.

“Don’t you think, if we’re going to help kids, people should put in some effort?” Manchin said.

According to both the supplementary and official poverty measures, the poverty rate for children in 2020 was higher than that of adults or seniors. Experts have said that monthly child payments will significantly reduce child poverty.

No change in uninsured, probably because of Obamacare

For health insurance, the new census report focuses on comparisons between 2020 and 2018, not 2019, to provide a more accurate picture of how coverage changed before the pandemic.

Overall, the proportion of the population without coverage remained basically the same. This increased from 8.5% in 2018 to 8.6% in 2020, a small change that is within the margin of error.

the result is consistent Other Recent Studies, another from the Urban Institute and the US Centers for Disease Control and Prevention, which found no significant change in the number of uninsured Americans because they lost their jobs, despite so many people losing insurance.

The most likely explanation for this, scholars agree, is the existence of government insurance programs—specifically, the Affordable Care Act, or “Obamacare,” which made Medicaid and subsidized private insurance available to many more Americans. Official Medicaid data from the US Department of Health and Human Services shows that Enrollment increased significantly Between the beginning of 2020 and the beginning of 2021.

But the Census report has a wrinkle: It did not generate any Medicaid enrollment growth, even though it found a decline in employer-sponsored insurance. One possible explanation is that low-income Americans were less likely to answer, or at least give accurate answers, questions about health insurance.

While this is always a problem with survey data, it can be particularly serious during pandemics, as the Census Bureau explained in one. accompanying blog post. Among other things, COVID-19 relief measures blocked state By requiring people to re-establish their eligibility for Medicaid during a public health emergency, as they often do. As a result, many people on Medicaid may not realize that they still have coverage.

“We know based on anecdotal data from states that Medicaid enrollment has increased significantly, so the census survey underestimates how many people are covered by Medicaid,” Larry LevitaExecutive Vice President of the Henry J. Kaiser Family Foundation. “The census report is based on people self-reporting their health insurance coverage, which is subject to error, and perhaps especially during turbulent periods like this. Medicaid eligibility for anyone in the program during a pandemic States are prohibited from terminating, which may be particularly confusing to some people.”

A separate finding in the census report provides further reason to think that government programs have made a difference. As always, the bureau breaks down insurance coverage by state, making it possible to compare what happened in states that expanded Medicaid eligibility to cover their entire low-income populations, with the Affordable Care Act available. Taking advantage of the money made, and those who have not.

Among non-elderly adults living at or below the poverty line, there was no change in the insured rate in the originally expanded states. But the states that did not expand saw an increase of 2.6 points.

There are a dozen such states, including Florida, Georgia and Texas, which are mostly scattered in the South and all under the control of Republican officials.

Dramatic differences in insurance coverage between states that have and are not expanding Medicaid are nothing new. But the discovery has special relevance today, because a a significant portion of the spending bill President Joe Biden and Democrats are trying to pass insurance coverage to low-income people living in those states and those currently ineligible for Medicaid.


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