American Rescue Plan will provide critical assistance for kids and families
Last Wednesday, Congress gave approval to one of the largest federal aid packages in American history. The $1.9 trillion American Rescue Plan includes a number of key provisions which are expected to have an enormous impact on the many kids and families who have been affected by the ongoing Coronavirus pandemic.
Child Tax Credit expansion
Recent changes to the Child Tax Credit are expected to cut child poverty by nearly half, lifting 57,000 Colorado kids out of poverty. The expansion makes the full CTC available to the lowest earners, and increases the credit’s maximum amount to $3,000 per child ($3,600 for children under 6). Poverty affects nearly every aspect of a child’s life, and the pandemic has only exacerbated the effects of poverty on Colorado children. The expanded CTC will help provide much needed financial assistance and lead to increased well-being among children and families.
In addition to the $600 payments issued through December’s stimulus bill, individuals making up to $75,000 and couples making up to $150,000 per year are eligible to receive a $1,400 check. Stimulus checks are expected to reach about 90 percent of American households, with families receiving an additional $1,400 per child. An estimated $400 billion of the federal aid package will be used to distribute the checks. This financial assistance, in addition to the expanded Child Tax Credit, will be crucial in helping the families most impacted by the pandemic.
For the many students who have shifted to remote classes over the past year, a safe and comfortable place to learn has become more important than ever. With $26 billion set aside to assist people with rent and utilities, the relief plan will help make this a reality for families who have struggled to pay rent due to job loss and economic downturn. In Colorado, this funding is crucial, as the state saw a record number of rental and mortgage assistance requests between Jan. 4 and Feb. 8, totaling $55 million in requests.
Current federal unemployment benefits were set to expire on March 14. The package extends these benefits — which provide an additional $300 a week on top of state benefits — through September 6. The first $10,200 of unemployment payments will be tax-free for households earning less than $150,000 a year. These benefits will provide relief for the many families who have lost work during the pandemic, and the tax break will prevent unexpected billing at the end of the year.
One in seven Colorado kids faced hunger before the pandemic, and this number has only worsened in the past year. The 15 percent increase in food stamp benefits (set to expire in June) has been integral to improving the health of Colorado kids and families. The federal aid package extends these benefits through September and will also allow states to continue administering the Pandemic-EBT program, which provides low-income families with the financial resources to replace the free or reduced-price meals their children would have received while attending in-person school. Moreover, $880 million will go toward the Special Supplement Nutrition Program for Women, Infants and Children (WIC). With approximately 38 percent of Coloradans experiencing food insecurity, these changes are critical to the well-being of our state.
Education and child care
More than $2 billion will be allocated to K-12 schools and child care centers in Colorado to relieve them of some of the challenges they continue to face from the pandemic. These funds will be used to help schools safely reopen for in-person learning, reduce costs for families who need affordable child care, and help child care providers keep their doors open, among other things. As some children have spent almost an entire year learning remotely, there is an even greater necessity to provide schools with the funds necessary to effectively support students in these challenging times. While the funding may not even begin to address the financial and educational disparities that have widened throughout the pandemic, it is a first step of many that seeks to provide relief to school districts and child care centers.
The American Rescue Plan includes a number of provisions aimed at improving the affordability and coverage of health insurance. These measures include expanded eligibility for Affordable Care Act subsidies for those enrolled in marketplace health plans, increased Medicaid coverage, and temporary premium subsidies for Consolidated Omnibus Budget Reconciliation Act (COBRA) continuation coverage, among other things. Especially since 1 in 3 COVID deaths and more than 40 percent of infections across the nation were believed to be related to insurance gaps, these benefits are critical for the health of Colorado families.
Specific provisions of interest to Colorado kids and families include:
- Creating a state Medicaid option to extend postpartum coverage in Medicaid and CHIP for a full year after the end of a pregnancy – Postpartum Medicaid coverage currently ends after about two months. This is important policy for Colorado because the highest number of maternal mortalities occur after 6 weeks postpartum and before 12 months postpartum. People who use Medicaid for their health insurance are more than twice as likely to die than people who do not use Medicaid. Under this option, the federal government would pay their share of Medicaid and CHIP costs to continue this coverage.
- Making marketplace coverage more affordable – The Act ensures that individuals earning less than 150 percent of the federal poverty level ($39,750 in annual income for a family of four in 2021) will be eligible for a health insurance plan with $0 premiums. Individuals with incomes between 150 and – 400 percent FPL (up to $106,000 in annual income for a family of four) will benefit from lower required contributions to their premiums. For the first time, individuals earning more than 400 percent FPL will be eligible for tax credits, and their premium contributions will be capped at 8.5 percent of income. These changes last for two years, though it is hoped that they will be extended permanently. Additionally, individuals who received any unemployment insurance in 2021 can get free or low-cost marketplace coverage.
- Increased support for Indian health providers – The Act covers 100 percent of the cost of care provided by Urban Indian Health Programs for two years.
You can read more about the health coverage components of the bill from:
The past year has been characterized by loss, uncertainty, and immeasurable challenge for so many Coloradans. While the American Rescue Plan may not serve as a long-term solution to the numerous inequities and economic difficulties experienced across the state, it is one positive step toward meeting the moment for kids and families in a time of crisis. As vaccine rollout continues and a greater sense of hope begins to emerge, we must urge our policymakers to prioritize Colorado kids in the near future to ensure they have the opportunities needed to thrive.