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Despite the pandemic, poverty fell thanks to stimulus controls

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

But even though the official poverty rate has also increased, an additional measure that takes into account stimulus payments found that poverty actually fell as incomes rose.

In other words, the public health calamity turned out not to be an economic calamity, or at least a calamity, thanks to government programs that provided help to people. Government programs that provided people with health insurance probably helped people as well, although the evidence for that is a bit more obscure.

Shortly after the first cases of coronavirus in the United States were confirmed, Congress enacted the Coronavirus Aid, Relief and Economic Security Act, creating a massive wage subsidy for small businesses, the biggest insurance expansion on record. -unemployment and an unprecedented relief payment of $ 1,200 for the vast majority of American adults.

Stimulus payments, in particular, had a big effect, raising incomes by 4 percent and pushing more than 11 million households above the poverty line, for a 2.6 percentage point drop in the poverty rate. poverty at 9.1%, according to Census Bureau Supplementary Poverty Measure.

The official measure of the poverty rate, which omits payments because they were technically tax credits, rose 1 percentage point to 11.4%, while median household income, excluding payments, fell by 2, 9% to $ 67,521.

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

Congress followed the CARES bill payments with a series of $ 600 checks in December, then a $ 1,400 payment earlier this year. The payments have proven popular, and Democrats have implemented recurring monthly checks of up to $ 300 per child for most households this year.

Now Democrats hope to continue payments for children until 2025, but face some opposition from members of their own party. And Sen. Joe Manchin (DW.Va.), a key vote in the Senate, said on Sunday he didn’t think households with no working income should be eligible for the payments.

“Don’t you think that if we want to help children, people should make an effort? said Manchin.

Children had higher poverty rates than adults or the elderly in 2020, according to additional and official poverty measures. Experts said monthly children’s payments are likely to significantly reduce child poverty.

No change among the uninsured, possibly due to Obamacare

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

Overall, the proportion of the population without coverage has remained essentially the same. It went from 8.5% in 2018 to 8.6% in 2020, a small change that is well within the margin of error.

The result is in accordance with other recent studies, including one from the Urban Institute and one from the U.S. Centers for Disease Control and Prevention, which found no significant change in the number of uninsured Americans despite so many people who lost their insurance because they lost their jobs.

The most likely explanation for this, the researchers agreed, is the existence of government insurance programs – in particular, the Affordable Care Act, or “Obamacare,” which made Medicaid and private insurance subsidized. available to many more Americans. Official data from Medicaid, the US Department of Health and Human Services, shows that registrations have increased considerably between early 2020 and early 2021.

But there’s a wrinkle in the census report: It saw no increase in Medicaid enrollments, even though it saw a decline in employer-sponsored insurance. One possible explanation is that Americans with low incomes were less likely to answer, or at least answer accurately, questions about health insurance.

While this is still an issue with survey data, it may have been particularly serious during the pandemic, as the Census Bureau made clear in a report. accompanying blog post. Among other things, COVID-19 relief measures have prevented states from requiring people to reinstate their Medicaid eligibility, as they frequently do, during the public health emergency. As a result, many people on Medicaid may not realize that they are still covered.

“We know, based on actual state data, that Medicaid enrollments have increased dramatically, so the census survey is most likely an undercoverage of the number of people covered by Medicaid,” Larry Levitt, executive vice president of the Henry J. Kaiser Family Foundation, told HuffPost. “The census report is based on people self-reporting their health insurance coverage, which is subject to error, and probably especially during a time of turmoil like this. States have been prohibited from terminating Medicaid eligibility for anyone participating in the program during the pandemic, which may leave some people particularly confused. “

A separate finding in the census report offers more reason to believe that government programs have made a difference. As always, the office has broken down insurance coverage by state, making it possible to compare what has happened in states that have expanded Medicaid eligibility to cover all of their low-income populations, in taking advantage of the funds made available by the Affordable Care Act, and those who have not.

Among non-elderly adults living at or below the poverty line, the uninsured rate has barely changed in expanding states. But it increased 2.6 points in states that did not develop.

There are a dozen of these states, including Florida, Georgia and Texas, most of which are scattered across the South and all under the control of Republican officials.

The dramatic differences in insurance coverage between states that have extended Medicaid and those that have not are nothing new. But the finding is particularly relevant today, because a key part of the spending bill that President Joe Biden and the Democrats are trying to push through would fund insurance coverage for low-income people living in those states and currently ineligible for Medicaid.

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