Nearly 38 million Americans have filed claims for unemployment insurance, and many more live in households in which someone has lost a job. As a result, nearly 27 million people could lose their employer coverage and become uninsured. Among this group, about half could be eligible for Medicaid, and several million more would be eligible for subsidies under the Affordable Care Act (ACA). However, major gaps in coverage and affordability would remain. If the unemployment rate reaches 20 percent, Oliver Wyman estimates that the number of uninsured will increase by about 9 million people.
To respond to this crisis and help as many people as quickly as possible, this column proposes emergency health coverage for the unemployed and uninsured. This emergency health coverage would build on one of the most popular parts of the ACA—its Medicaid expansion—by automatically enrolling the unemployed into Medicaid. In doing so, it would guarantee immediate coverage for all of the unemployed.
By leveraging the existing Medicaid infrastructure and program rules, it is possible to rapidly enroll the unemployed in coverage in 2020 and 2021. Such a proposal could be paired with reforms that enhance premium and cost-sharing subsidies for higher-income enrollees in ACA coverage—and that could be implemented relatively quickly—in 2021. And after 2021, this proposal could form the building blocks for broader reforms that expand public coverage further and streamline the system.
Additionally, by expanding Medicaid, this proposal is cost-effective, with the lowest possible cost per enrollee and the most comprehensive coverage. The Center for American Progress estimates that under the plan, 23 million people would receive comprehensive coverage in 2021 at a cost of only $90 billion. Simply put, this proposal meets the scale and urgency of the current crisis.
Gaps in health coverage
The pandemic and economic crisis have exposed major gaps in health coverage. Individuals who lose their jobs and employer coverage could fall through four cracks:
- In states that did not expand Medicaid, families could fall into the “coverage gap.” In these states, income eligibility for Medicaid typically ends below 50 percent of the federal poverty level, but income eligibility for ACA subsidies does not begin until 100 percent of the federal poverty level. The Kaiser Family Foundation estimates that 9 million people will fall into the coverage gap by January 2021.
- Families could have incomes above 400 percent of the federal poverty level in 2020, making them ineligible for ACA subsidies. Because income eligibility is determined on a calendar-year basis and unemployment insurance benefits count as income, unemployed individuals could have incomes above 400 percent of the poverty level even if they have no current wages. The Kaiser Family Foundation estimates that 7 million people will be ineligible for subsidies due to the way income is counted.
- Families could be eligible…
Read More: Emergency Health Coverage for the Unemployed and Uninsured in Response to the