When COVID Aid Stopped, Millions of Children Lost Out
To gauge how much the federal government’s COVID assistance helped the nation’s disadvantaged children, consider what happened after the relief stopped.
Millions of low-income children have lost their health insurance and the COVID tax relief that had lifted their families out of poverty.
In March 2020, President Trump signed the Families First Coronavirus Response Act, which, among other provisions, barred state Medicaid programs from dropping adults and children from their public health insurance rolls. One year later, with the virus still raging, President Biden signed the American Rescue Plan to provide another form of support: temporarily increasing the child tax credit and expanding it to include more low-income families.
Both provisions have expired, and the impact is now being tallied.
In 2022, nearly 9 million children under 18 were in families that fell below the Supplemental Poverty Measure, which takes into account a family’s earnings from working and any government assistance they receive. The 2022 poverty rate under this measure was 12.4 percent.
If the enhanced child tax credit had not expired in December 2021, Columbia University’s Center on Poverty and Social Policy estimates that it would’ve prevented 3 million children from falling into poverty, which would’ve cut the 2022 rate to 8.1 percent.
“The increase in child poverty in 2022,” the center’s report concluded, “is largely the result of the expanded child tax credit’s expiration.”
The federal government has provided a child tax credit for nearly 30 years. But the enhanced credit during the pandemic benefited low-income families in particular. The $2,000 credit increased for one year to $3,600 for children under age 6 and to $3,000 for children ages 6 to 17. The American Rescue Plan also made the full credit available to more families and converted the assistance from a credit taken at tax time to a monthly cash infusion to pay the bills.
House and Senate negotiators recently reached a compromise that would again expand the number of families eligible for child tax credits. The bipartisan proposal, which contains different provisions from the 2021 law, has been approved by the House but passage in the Senate is not certain.
Georgetown University’s McCourt School of Public Policy estimates that 3.5 million children have also lost their health insurance since the March 2023 expiration of the Families First Act’s requirement for continuous enrollment in Medicaid and the Children’s Health Insurance Program, or CHIP.
The provision was responsible for pushing down the uninsured rate among children from 5.6 percent in 2019 to 5.1 percent in 2022, according to KFF, the healthcare research organization. States have returned to their pre-COVID practices and once again require residents to verify their eligibility to renew coverage.
KFF estimates that a majority of the individuals losing their coverage are having problems with the procedures or paperwork required to enroll. This has raised concerns that eligible children are being dropped, along with those whose parents have found a job with insurance or are earning more than Medicaid’s income limit.
Medicaid and the tax credits were especially important to Black and Hispanic children, whose families felt the brunt of COVID’s damage. The millions of children who have lost the assistance are a stark reminder of the stakes involved in determining who gets federal aid.
Squared Away writer Kim Blanton invites you to follow us @SquaredAwayBC on X, formerly known as Twitter. To stay current on our blog, join our free email list. You’ll receive just one email each week – with links to the two new posts for that week – when you sign up here. This blog is supported by the Center for Retirement Research at Boston College.