Posts Tagged "CARES Act"
July 8, 2021
ACA Proves Itself but Race Disparity Persists
The U.S. Supreme Court’s decision in June to reject another challenge to the Affordable Care Act was widely seen as the final word: the law is here to stay.
But it was COVID-19 that underscored how important it is.
The federal government said nearly 10 million people signed up for Medicaid health coverage during the pandemic year that ended in January 2021. A decade after passage of the Affordable Care Act (ACA), which expanded Medicaid to include more low-income Americans by increasing the income limit for eligibility, the new sign-ups pushed total Medicaid enrollment to a record high of 80 million.
The recent increase was largely due to the spike in sign-ups among the unemployed or workers who saw their hours reduced and lost some of their wages. The relief packages passed by Congress in March 2020 and this year encouraged Medicaid enrollment by giving states additional funding to pay medical costs and sign up more people.
Beyond Medicaid, sales of regular health insurance policies sold on the state insurance exchanges also rose last year, as COVID-19 raced through the population. A 5 percent increase in enrollment in the policies, which are often subsidized, pushed total enrollment to 12 million.
Earlier this year, the American Rescue Plan continued to shore up health coverage by reducing insurance premiums for people who buy the policies. Unfortunately, these and earlier federal supports were temporary measures put in place for the pandemic, and some progress will be reversed when the supports expire at the end of this year or next year.
Despite the recent coverage gains, it has been a bumpy ride. Prior to COVID-19, sales of ACA policies had been slowing after years of marked progress in reducing the U.S. uninsured rate. And in the states that have not expanded Medicaid to reach more residents, the uninsured rates are nearly double the rates in the expansion states – 15.5 percent vs 8.3 percent. …Learn More
February 4, 2021
CARES Act’s Loan Forbearance is Working
As the pandemic was sinking into our collective consciousness a year ago, Congress, fearing economic calamity, allowed Americans to temporarily halt their mortgage and student loan payments.
By the end of October – seven months after President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act – Americans had postponed some $43 billion in debt, including car loans and credit cards, which many lenders deferred voluntarily. Billions more are still being added to the total amount in forbearance.
Fast action in Congress “resulted in substantial financial relief for households,” says a new study by researchers at some of the nation’s top business schools. Their recent analysis found that the assistance went where it was needed – to “financially vulnerable borrowers living in regions that experienced the highest COVID-19 infection rates and the greatest deterioration in their economic conditions.”
When lenders grant forbearance they agree to waive their customers’ debt payments for a specified period of time. For example, Congress said borrowers could request that their payments on federally backed mortgages be deferred by six months to a year.
Although forbearance was less visible than the checks taxpayers also received under the CARES Act, the financial lift was equally potent. Customers who received loan forbearance saved an average of $3,200 just on their mortgages last year – this compares with $3,400 in stimulus checks for a family of four.
Congress also automatically suspended all payments on federal student loans, saving borrowers an average $140 last year, and President Biden has just extended the forbearance until at least Oct. 1. Lenders, in an attempt to prevent massive loan defaults on their books, voluntarily gave consumers a break last year on two types of loans that weren’t part of the CARES Act: automobile loans ($430 saved) and credit cards ($70 saved).
Forbearance is only temporary relief, because the missed payments will eventually have to be made up. But in a telling indication that borrowers didn’t want to fall behind, just a third of the people who asked for debt relief actually used it. In these cases, forbearance “acts as a credit line” borrowers can draw on – if they really need it. …Learn More
December 15, 2020
Crisis for Renters Threatens to Get Worse
Many unemployed and underemployed workers have run out of options for paying the rent. The National Low Income Housing Coalition, the Aspen Institute, and other organizations estimate that up to 40 million renters risk being evicted this winter. Congress is currently negotiating a new COVID-19 relief package but it’s not yet known whether it will extend a CDC moratorium on evictions or go beyond the Cares Act last spring and provide rental assistance to help renters and, by extension, their landlords.
Squared Away spoke with Sarah Saadian, vice president of public policy for the National Low Income Housing Coalition, about what she describes as an impending calamity.
Q: How bad is the current situation?
Saadian: It’s really hard to get data on how many people have been evicted because there isn’t a national database – only state data. But we know that nearly one in five renters are behind on their rent, and they’re disproportionately Black and brown renters. When the CDC moratorium on evictions expires Dec. 31, renters are going to owe somewhere between $25 billion and $70 billion. That’s a huge amount of back rent that renters realistically can’t afford to pay off. So what we’re likely to see is a huge increase in evictions and, in the worse cases, homelessness unless Congress extends the moratorium and provides really robust resources for emergency rental assistance.
Q: What do you expect if the moratorium isn’t extended beyond Dec. 31?
It would be a calamity. Because of the loopholes in the CDC moratorium and because of the sheer amount of rent renters owe, if there’s any gap between when the moratorium expires and the Biden administration takes action – if they do – you’re going to see potentially millions of people lose their homes in the dead of winter when we’re dealing with a resurgence of COVID. It’s an emergency on top of an emergency.
Q: A UCLA study said that 44 states had moratoriums but that 27 have lifted them and that the resulting evictions have resulted in more than 10,000 deaths. Make the connection between housing and health.
When low-income people are evicted from their homes, they don’t have a lot of good options. They either are doubling or tripling up with other families, or they go into homeless shelters. In either case, it’s more difficult to social distance, and it’s easier for the virus to spread. If Congress doesn’t take action, it harms all of us. Not only does it mean more of us dying from COVID but it puts more strain on our health care system.
Q: This is a complicated issue, because small landlords have to pay their mortgages and can’t necessarily afford to cover tenants’ rents. What is your position on that?
The best solution for both renters and landlords is emergency rental assistance because that eliminates the back rent renters owe and makes up the lost income landlords need to operate their property. It is not every day that landlords and renters can agree. A lot of landlords don’t like the moratorium but it’s absolutely essential to have an extension of the CDC moratorium at least until state and local governments can distribute rental money to people in need. Even if Congress provides emergency rental assistance, but doesn’t extend the CDC moratorium, then millions of people will still lose their homes.
Q: You mentioned minorities are particularly affected by evictions. How about particular states or income groups? Rural vs urban renters? …Learn More