Editorial: What keeps us from addressing poverty?

Published: 01-26-2024 9:30 PM

Modified: 01-29-2024 9:17 AM

Of all the hardships that can befall working families, loss of health insurance is among the hardest. That is the situation that nearly 30,000 Vermonters find themselves in now, having been “disenrolled” from (that is, booted off) Medicaid since last April, many of them for “procedural reasons” — that is, because of red tape. This is a critical shortcoming for a state that prides itself on its concern for the common good.

Medicaid is the country’s main public health insurance program for lower-income people. Financed by the federal and state governments, it covers one in five Americans and is administered by the states under broad federal guidelines.

During the pandemic emergency, Congress wisely provided extra federal funding to states to keep people continuously enrolled in the program. But that provision expired on March 31 last year. Since then, an estimated 14 million Americans have lost Medicaid coverage. Of those, an estimated 70% — as in Vermont — were thrown overboard for procedural reasons such as incorrectly or incompletely filling out a renewal application, the lack of required documents or failing to meet a deadline, according to KFF, a health policy think tank.

VtDigger reports that 20,152 of the 27,984 Vermonters who lost coverage were removed from the rolls for such administrative reasons. (The others presumably became ineligible for valid reasons, such as an increase in income beyond the eligibility guidelines.) No one seems to know how many of those lost to the bureaucracy are actually ineligible, as the state is only about halfway through the process of making that determination, with no end date in sight, according to VtDigger.

Vermont should have done better in aggressively reaching out to the people at risk of losing coverage and quickly verifying their eligibility. Even if they are eventually re-enrolled in the program, those vulnerable Vermonters will have experienced a lapse of coverage that could have severe health consequences.

In the bigger picture, though, the winding down of the federal Medicaid continuous enrollment program raises the question of what America learned from the COVID-19 pandemic, specifically why it has abandoned a suite of programs that not only rescued the economy from catastrophe in relatively short order but also improved the economic security of millions of Americans through such measures as stimulus payments, rental aid, food assistance and an expanded child tax credit.

Matthew Desmond, a Princeton sociologist and Pulitzer-Prize winning author of “Evicted: Poverty and Profit in the American City,” writes in the current New York Review of Books that one of the three major COVID relief bills, the American Rescue Plan Act of 2021, passed by Democrats in Congress and signed into law by President Biden, was “unquestionably the most important intervention the federal government has made in the lives of low-income Americans since the Great Society.” For instance, he says that the law, especially its expanded child tax credit, “reduced child poverty to its lowest rate in U.S. history, driving it down by 44% in six months.” The number of children living in poverty was reduced by 5.5 million.

But when the pandemic era programs ended, childhood poverty more than doubled, from 5.2% to 12.4%. Evictions spiked, as did homelessness and demand for food assistance. “As pandemic aid programs have dried up,” Desmond concludes, “many families find themselves considerably worse off than they were during lockdown.”

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Terrible as it was, the pandemic demonstrated that the country has the capacity to materially improve life for millions of low-income families. Yes, there was some wasteful spending, but in the aggregate, the government’s intervention was highly successful.

So the question is, why not extend policies that did so much good for so many people?

It’s certainly not that the United States can’t afford it. Desmond estimates that $1 trillion in taxes go uncollected every year. Moreover, tax rates for the highest earners are low: the marginal tax rate for that bracket is now 37%; during the Eisenhower administration, a time of widespread prosperity and shrinking income inequality, it was 91%. Obscenely wealthy hedge fund managers are allowed to treat their riches as investment income rather than compensation that is subject to higher, ordinary income taxes. The list goes on and on. The resources are there if we choose to use them.

But why don’t we? Political gridlock is a short answer, but in our view, the problem runs deeper: It is a lack of political will and an inability to think big. A society is at risk when it is so shortsighted that it fails to recognize that economic security for the vulnerable — access to good health care, decent housing, nutritious food and a robust system of public education — is the foundation for a just society and a prosperous and secure future for everyone.