The widespread impact of COVID-19 on all areas of our lives has been remarkable. State budgets are being hit hard, driving lawmakers to pass legislation to protect and support vital programs and policies as best they can. Here’s an overview of just how deep and wide the virus’ influence has been.
As the novel coronavirus began to spread across the country, the public health and health care systems were the first sectors affected and the first to respond.
To date, governors in every state and territory have declared emergencies, allowing greater authority and flexibility to respond to COVID-19. Even with many state legislatures suspending or postponing sessions, more than 20 states, the District of Columbia and Puerto Rico have passed more than 35 health-related bills that appropriated money and supported other efforts in the health care and public health systems. Here’s a look at state responses to the pandemic.
Bolstering the health care system
To address concerns about health care system capacity, states loosened requirements around the health care workforce and telehealth. Most of the changes are for the duration of the pandemic only and, to date, have been led by the executive branch.
More than 40 states have modified licensing requirements and expedited approvals for physicians and other health care providers to recruit out-of-state, inactive and retired providers to expand the state’s workforce. At least 29 states also expanded the scope of practice for nurse practitioners and physician assistants, allowing them greater independence in providing care to patients.
Telehealth was used early in the crisis, particularly to help determine whether people’s symptoms required a test or hospital visit. Other uses included managing chronic conditions and providing mental health care or substance use disorder treatment at home to reduce the need to visit a health care facility.
Federal and state action expanded telehealth by ensuring coverage and relaxing a number of restrictions, such as requirements related to providers and telehealth methods. Although governors’ orders led many state changes, legislatures in Alaska, Maine, New Jersey and Puerto Rico also took similar action.
Ensuring affordability and accessibility of care
As the virus spreads, coverage and access to needed health care services, including COVID-19 testing and treatment, remains critical. Federal and state leaders first focused on reducing patients’ costs, such as copays and deductibles, for testing.
The Families First Coronavirus Response Act requires insurers to cover testing for the virus without any cost to patients or prior authorization requirements. The federal law also gives states the option to cover COVID-19 testing and test-related visits for uninsured individuals. So far, 12 states have taken advantage of this flexibility, according to the Kaiser Family Foundation.
A handful of states have gone further, adopting measures to waive cost sharing for treatment as well as testing, through mandates or insurer agreements. Many insurers have also committed to waiving costs associated with seeking treatment.
For individuals without health insurance, 11 states and the District of Columbia have created a special open enrollment period on their state-based exchanges, allowing anyone to buy a plan. Other states are allowing longer grace periods for premium payments or placing moratoriums on the cancellation of insurance policies for not paying premiums.
All states have received Medicaid Section 1135 waivers—available during emergencies—to ease requirements in areas like prior authorizations for services, provider credentialing, and reporting and oversight. States also are exercising flexibility using State Plan Amendments, Section 1115 waivers, and home- and community-based services waivers.
In an effort to flatten the curve and prevent health systems from being overwhelmed, most governors or state health commissioners issued statewide stay-at-home orders, closed schools and certain businesses, and placed limits on gatherings, according to tracking by the National Governors Association. As state leaders begin easing restrictions, they are closely watching the data.
Widespread testing and contact tracing are key to reopening states, according to most public health experts and guidance from the White House, NGA, the Association of State and Territorial Health Officials and others.
Testing and contact tracing help monitor and control the spread of the virus by identifying hot spots or outbreaks and isolating infected people.
Despite progress in the last few weeks, widespread testing for COVID-19 still lags in terms of per capita testing. At the lower end, one report estimates the U.S. needs 750,000 tests per week, while another estimate suggests millions per day.
While state leaders seek more testing kits, state and local public health departments are scrambling to ramp up the workforce to the level necessary for comprehensive contact tracing.
“We have the knowledge and the skill [to do contact tracing]—we just need the numbers,” said ASTHO’s chief executive officer, Mike Fraser, in a recent NCSL webinar.
The country needs close to 100,000 tracers, according to ASTHO. State needs range from 176 in less populous states like Wyoming to 12,000 or more in states like Texas and California.
Most experts agree that social distancing may be necessary for many months ahead, and many argue that states won’t fully return to “normal” until there is a vaccine.
While effective treatment for COVID-19 is likely to come more quickly, researchers, pharmaceutical companies and federal agencies are working to accelerate the development of a vaccine. Recent reports indicate progress in identifying potential treatments and vaccines, though many estimate it will be 12 to18 months before a vaccine is available.
Still, public health experts caution about obstacles in the road ahead. CDC Director Dr. Robert Redfield warned that states could experience significant challenges this winter. “We’re going to have the flu epidemic and the coronavirus epidemic at the same time,” he told The Washington Post.
Federal and state leaders also will be tackling emerging consequences of the virus, including the disproportionate effect it has had on communities of color, the financial hit already unstable rural health facilities have taken, and the potential for increased enrollment in Medicaid as a result of the economic downturn.
The pandemic will continue to evolve, as will the responses from public health and health care systems to improve prevention, mitigation and treatment of the virus.
State legislatures are likely to take a larger role in the coming months, as many reconvene not only to tackle ongoing issues and new funding challenges, but also to examine and confront the weaknesses in public health and health care systems exposed by the coronavirus.
States welcomed the new decade and 2020 with strong economic growth and healthy finances. Tax collections were robust. Spending was keeping pace with revenues. Rainy day funds were full, unemployment was low and business was booming. True, a few dark clouds hung over oil- and gas-producing states because of low energy prices, but, by and large, the fiscal outlook for states was bright.
Fast forward a few weeks, and boom! It’s all gone in a flash with the arrival of the coronavirus. Heading into fiscal year 2021, states face an economic downturn of unprecedented magnitude and a dismal fiscal outlook.
Efforts to curb the spread of COVID-19 with stay-at-home orders have wreaked havoc on state budgets. Not only did state revenues come to a screeching halt as economic activity paused, but the legislative process itself was interrupted. Most states suspended legislative sessions in mid-March, leaving about half the states without enacted budgets.
Since then, lawmakers have scrambled to ensure continued funding because state laws require balanced budgets prior to the new fiscal year, which starts for 46 states on July 1. At the end of April, 30 states had enacted FY 2021 budgets. In some cases, they were modified versions, while other states passed skeletal or bare-bones budgets that can be filled in later or approved continuing resolutions. Some states took more unusual measures. For example, New Jersey changed the date of its fiscal year—pushing it back three months, from July 1 to Oct. 1. Kentucky lawmakers diverted from the regular two-year budget and passed an annual budget because of economic uncertainty. Sixteen of the states with enacted FY 2021 budgets have biennial budgets that were approved during 2019 legislative sessions, long before COVID-19 was on anyone’s radar.
The landscape has changed. Now, thousands of people are sick and millions more are out of work. Health care spending and unemployment benefits have skyrocketed, while state tax collections have plunged. As a result, many states with previously enacted FY 2021 budgets will need to reconvene to reconcile those budgets with the new economic reality.
Yet, what that new reality will look like remains unclear. State economists are struggling to grasp the magnitude of the revenue impact. Sales tax figures for March (the first month of mass closures) are just starting to come in. Income tax collections were delayed by extended filing deadlines, making forecasting more difficult. Early estimates of state revenue losses are upwards of 15 to 20% and increasing the longer the shutdown continues. At least 12 states have already authorized the use of reserve funds to address lost revenues.
It’s still too early to know what measures legislators will take to balance state budgets when they convene. However, some insight can be gleaned by looking back at what they did during the last recession to address big budget shortfalls. In 2009-10, states generally made across-the-board budget reductions first, followed by specific cuts and public employee furloughs. Many tax increases were temporary and often targeted high-income earners. States also raised revenues by broadening income and sales tax bases through reduced exemptions and credits.
Looking ahead, the future for state finances seems bleak. But there is one small glimmer amidst the gloom: Most states are better prepared for a downturn now than ever before. Having learned an important lesson during the Great Recession, policymakers took measures over the past decade to build up their rainy day funds. At the beginning of 2020, states, on average, had reserve funds hovering around 10% of general fund spending. This won’t last long if business activity doesn’t resume quickly, but it will provide a little breathing room as policymakers grapple with the catastrophic revenue fallout of the COVID-19 pandemic.
Adapting to virtual learning, with challenges ahead
Education has been dramatically affected by COVID-19. All states eventually shut down college campuses and K-12 schools through at least mid-May, and most turned to online learning. School leaders and teachers face significant challenges to ensure students have access to technology, whether that be devices or internet connections.
And, as not all teachers are trained to deliver instruction in this way, they had to learn quickly how to adapt their delivery to a virtual platform, whether their students were in kindergarten or graduating seniors. Schools, too, are struggling to get materials and meals to students in rural areas who qualify for free and reduced lunch. Meanwhile, higher education is working to ensure that students who were quickly displaced have a safe place to live and access to distance learning.
Even as schools—and the policymakers who work with them—face these immediate and significant challenges, state policymakers are trying to determine how best to help them. They have applied for waivers from the federal government’s required testing, held harmless K-12 grades, released schools from taking attendance and suspended enforcement of accountability requirements for struggling K-12 schools.
As legislatures reconvene this summer and fall, they will need to deal with not only the immediate challenges that come with attempting to reopen a school system by fall, but also the long-term impact to the entire system. They will need to address how the education system can help students recover from the learning loss sustained this spring and through the summer and the mental health challenges that have been exacerbated during this turbulent time. They also will have the daunting task of determining how to ensure that inevitable education budget cuts will not further the inequities exposed since the Great Recession and protect those school-related factors that most affect student success.
Job front remains rocky for some industries
State economies face a long, steep climb out of record-breaking unemployment claims, with millions of Americans out of work. Especially hard hit were jobs in leisure and hospitality, health care and social assistance, and business and professional services areas, according to the Bureau of Labor Statistics. Those three sectors alone lost 572,200 jobs in March.
Yet, despite those numbers, some industries, such as shipping and delivery, are booming. Amazon is hiring more than 175,000 workers and UPS and FedEx are hiring to help deliver the growing amount of e-commerce orders. Grocery stores, pharmacies and other major retailers are bumping up their staff as well. Walmart hired 150,000 new workers and promises to add another 50,000 to its payroll, and other big-box stores including Target and Costco are also looking to ramp up hiring. Gig jobs in food delivery are thriving.
Online learning companies are hiring thousands of teachers, and remote meeting and communications companies are trying to keep up with demand as millions of students and workers now regularly using telecommunication and videoconferencing tools.
The question remains, as states begin letting businesses open, how many jobs will return?
An important employment issue that has arisen in the wake of the COVID-19 crisis is whether workers’ compensation comes into play for employees infected with the virus.
Workers’ compensation covers medical expenses and lost wages when workers become injured or ill as a direct result of their job. But, generally, it does not cover routine community-spread illnesses such as the cold or flu because these conditions cannot be directly tied to the workplace. Severe respiratory illnesses among firefighters and other first responders, however, are presumed to be work-related and covered by workers’ compensation in at least 20 states.
So, should COVID-19 be treated differently than a cold or flu? Without state intervention, perhaps. The determination would likely be made on a case-by-case basis by the workers’ compensation insurer and may depend on specific circumstances, such as who infected the worker and what that worker was doing at the time.
State policymakers can define the extent to which workers infected with COVID-19 are covered. A handful of states, including Minnesota, North Dakota and Washington, have strengthened the coverage for first responders, health care workers and other essential workers with a high risk of exposure.
And, for some, workers’ compensation may not be the best option. Other benefits, such as paid sick leave or personal health insurance, may provide faster support with less red tape. In COVID-19 cases resulting in loss of life, however, workers’ compensation can provide valuable financial death benefits for a worker’s family.
HOUSING AND HUMAN SERVICES
Vulnerable populations face heightened risk
The COVID-19 crisis is affecting households at all socioeconomic levels; however, the economic pain is being experienced most acutely by the same populations that were disadvantaged going into the crisis. Race, ethnicity, occupation, social status and the presence of a disability have been historic drivers of economic disparity in the United States, and COVID-19 has laid them bare again.
The shortage of safe, stable and affordable housing in the United States was severe before the COVID-19 pandemic, and with millions of workers losing their incomes, many more adults and families are now unable to make rent and mortgage payments. COVID-19 is giving rise to concerns about a potential new wave of homelessness, and to calls for strategies to mitigate the health and safety risks faced by those already experiencing homelessness.
Child welfare and early care and education systems have experienced significant disruptions, putting tremendous strain on children, youth and families, as well as the caseworkers, caregivers, home visitors and early intervention specialists who support the healthy development and well-being of the next generation.
COVID-19 has put the vulnerable populations of children and youth in child welfare systems at heightened risk and is asking more of the already-stretched child welfare workforce. NCSL has developed four resource guides to inform legislators and legislative staff about issues and potential remedies related to child welfare caseworkers, congregate care facilities, foster and kinship caregivers, and older system-involved youth.
Child care may be one of the most pronounced crises within the larger COVID-19 emergency. Advocates are already calling on state and federal lawmakers to address the economically unsustainable pact of families, child care providers and employers at large.
COVID-19 has become a Gordian knot for families bound together by child support or visitation orders. Parents on both sides of the financial equation—noncustodial parents with child support obligations and custodial parents at risk of not receiving payments—are concerned about the flow of child support payments. Questions and concerns about court-ordered access and visitation amid a pandemic are also on the table.
Lawmakers at all levels are being called on to address the basic needs of millions of Americans, and, in the months ahead, constituents will be looking to their legislators for strategies to rapidly connect people to a brighter, safer future. Visit NCSL’s Human Services COVID-19 Resource Hub or contact NCSL staff with your research or technical assistance request.
Courts, law enforcement see big impacts
COVID-19 is forcing federal, state and local governments to make decisions that will affect the big-picture operation of their criminal and juvenile justice systems.
Courts at every level have postponed or canceled proceedings. Many jurisdictions have converted to virtual court proceedings when possible. The U.S. Supreme Court building is closed but will remain open for official business. The justices postponed March and April oral arguments but will continue to hold conferences and issue scheduled orders, with some justices participating by telephone.
The daily work of law enforcement officers also has been greatly affected by the coronavirus. Many departments have expanded citation in lieu of arrest policies or limited arrests within already established statutory limits. Arrest rates and jail bookings have decreased significantly, and jail populations have fallen in local jurisdictions by as much as 70% in some cases.
The federal Bureau of Prisons, state corrections departments, local jail administrators and juvenile justice agencies all have taken steps to prevent the spread of COVID-19 in adult correctional and juvenile detention facilities. For example, facilities are releasing vulnerable people and low-level offenders from jails and prisons when possible and reducing or suspending visitation.