Good news on health insurance in pandemic

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September 27, 2022 Good news on health insurance in pandemic

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To paraphrase one US senator in 1977, the government’s moral test is how it treats the sick, the poor, and its children. This is especially true during a historic public health emergency like COVID.

Congress came up with financial relief to blunt the effects of the pandemic, and the money flowing through the economy provided health insurance to more Americans, while also alleviating poverty.

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Several newly released US Census reports “show how vigorous policies can help prevent poverty and maintain access to health care,” concluded the Center on Budget and Policy Priorities.

Insured. During the pandemic, the share of all adults lacking health insurance declined from 9.2% in 2019 to 8.6% in 2021, reversing the trend of increasing uninsured rates in prior years. By passing larger premium deductions for policies purchased on federal and state exchanges and requiring states receiving Medicaid funds to expand their coverage of poor and low-income workers during the pandemic, Congress has stymied the spread of COVID-19. The rate declined during the period as access and affordability improved.

Congress has extended the premium deduction until 2025, but federal enhancements to Medicaid are set to expire, leaving states to determine the extent to which they will cover their low-income workers in the future.

Poor. According to the census, COVID aid passed by Congress lifted nearly 14 million Americans out of poverty over the past two years. This statistic aligns with earlier research showing that financial aid was particularly effective in helping low-income workers and those who were struggling financially before the pandemic.

The official poverty rate, 11.6 percent in 2021, was largely unchanged, the census said. But an alternative poverty measure that better reflects the impact of government aid – the Supplemental Poverty Measure, or SPM – fell to 7.8 percent for the third year in a row, its lowest level since it was first published six decades ago. Poverty experts argue that SPM is preferable in this instance because it includes items that standard poverty measures do not, such as special child care payments to parents and federal stimulus payments and increased unemployment benefits passed by Congress.

Children. The SPM for children was cut in half last year to 5.2 percent, widely seen as a response to Congress’s approval of temporary cash payments to parents.

On the health insurance front, some 475,000 more children were also covered in 2021 compared to 2020, and their uninsured rate dropped to just 5 percent. The Census Bureau attributed the increase in coverage to two health insurance programs for poor and low-income families and their children: Medicaid and the Children’s Health Insurance Program known as CHIP.

The country’s insured and poverty rates have improved. But the future is uncertain as much of this financial aid is running out.

Squared Away author Kim Blanton invites you to follow us on Twitter @SquaredAwayBC, To stay current on our blog, please join our free email list. You’ll only receive one email each week when you sign up here – with links to two new posts for that week. This blog is supported by the Center for Retirement Research at Boston College.

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