Millions of Americans Have Lost Their Health Insurance in the Middle of a Pandemic

The COVID-19 pandemic has upended the US economy and produced record-high unemployment. To make matters worse, more than half of the US adult population—about 158 million people—receives health insurance through their employer. This means that the current economic crisis has the potential to strip millions of people of their health insurance. This has far-reaching consequences, particularly in the middle of a global pandemic, and policymakers must act to stem insurance losses and improve coverage going forward.

The tremendous uncertainty around future unemployment levels and health insurance losses only complicates this crisis. In April, a few weeks after the start of the pandemic, unemployment hit a historic peak: 23.1 million people had lost their jobs, the highest level since the Great Depression. This unemployment level has since trended downward to 12.6 million people in September. Experts predict that a second wave of the coronavirus is imminent and future efforts to contain the spread of the virus could result in another spike in unemployment. Until a vaccine becomes available, the US economic outlook will remain dire.

We don’t yet know how many people will become uninsured as a result of these job losses and definitive data won’t be available until mid to late 2021. A recent Urban Institute report uses a predictive model to forecast health insurance losses due to the coronavirus recession. The report forecasts that 10.1 million people will lose coverage by the end of 2020 due to a coronavirus-related job loss in the family. This is even higher than the 8.3 million total people who lost employer-based coverage in the 2007-2009 Great Recession.

The majority of these 10.1 million people who are expected to lose health insurance will likely enroll in alternative coverage. The study estimates that 32% will switch to another family member’s employer-based coverage or enroll in COBRA, 28% will enroll in Medicaid, and 6% will enroll in marketplace coverage. However, people enrolling in new coverage following a job loss still face challenges. Switching plans often means losing access to preferred physicians and providers, resulting in negative effects on healthcare outcomes and costs.

Furthermore, premiums associated with COBRA—a federal act that allows a person who loses their job to keep their old employer’s health coverage for up to 36 months—are often prohibitively expensive. Individuals who choose to continue their coverage through COBRA pay on average four times more than the amount they paid while employed.

The report also finds that an additional 3.5 million people in the US are likely to lose their insurance and remain uninsured following a pandemic-related job loss in 2020. These losses will bring the total number of uninsured people in the US to over 30 million, the most since the Affordable Care Act (ACA) was fully rolled out in 2014. The highest concentration of these coverage losses will be in the 14 states that have not expanded access to Medicaid.

People who are uninsured or underinsured could face staggering costs if they contract the coronavirus. The virus has sent the seriously ill to hospital intensive care units for weeks at a time, sometimes requiring surgery or the use of a ventilator. The fear of high costs often prevents these people from seeking treatment or medical advice, complicating efforts to contain the spread of the virus and prevent deaths. During a global pandemic, it’s critical that everyone who becomes infected is able to seek effective treatment. Not doing so will exacerbate the spread of the virus.

This is the first recession in which the ACA is in place to serve as a safety net. The pandemic has revealed the importance of the ACA in providing options for people who lose their employer-based coverage. Still, there will be over 30 million uninsured people in the U.S. by the end of the year as well as at least an additional 44 million who are underinsured because of unaffordable deductibles and copayments. These statistics point to lingering gaps in the US health insurance system, including a lack of Medicaid expansion in 14 states, affordability barriers in buying coverage through the marketplaces or COBRA, and a general lack of awareness of coverage options, exacerbated by the pullback of advertising for the ACA’s enrollment options.

Policymakers have many options available to them to prevent a spike in uninsured Americans. In March, for example, Congress passed the Families First Act which amends Medicaid to cover uninsured people for coronavirus testing services. This act is a good first step but insufficient in two key ways: it does not expand full insurance coverage nor does it cover any coronavirus treatment services.

An aggressive advertising and outreach effort to notify people who have lost employer-based coverage that they may be eligible for marketplace coverage or Medicaid would have a material impact on the number of people enrolled in these options. An expansion of the Families First Act to cover coronavirus treatment services would guarantee emergency coverage for people who are uninsured or underinsured. A nationwide special enrollment period for the marketplace would ensure all people who lose coverage know they are eligible to enroll in a new plan and would also reduce the documentation needed to do so.

We do not know the future course of the pandemic or how long the accompanying economic crisis will last. However, the US can ensure that everyone has access to affordable health care. Doing so would not only relieve a major source of insecurity for millions of households, but also strengthen our ability to contain and control the spread of the virus. Future pandemics are inevitable, but an expansion of coverage now will help reduce their severity in the future.