Did You Lose Your Health Insurance Because of the Coronavirus Pandemic? Coverage Options for Laid-Off Workers and Others
More than 26 million people filed unemployment claims with the U.S. Department of Labor over the five-week period ending April 18. This unprecedented number of filings may climb if more businesses lay off workers as the economic fallout from the coronavirus pandemic continues. Forecasters estimate that the unemployment rate could hit 20 percent for the month of April. For context, during the Great Depression, unemployment peaked at 25 percent.
Millions of workers who have lost their jobs also will lose their health insurance. The potential severity of COVID-19 means that being uninsured could leave people at risk for catastrophic health care costs. Here are some key things people who lose their jobs or who are currently uninsured should know.
Coverage Options for People Who Lose Their Jobs or Are Uninsured
If you have insurance through the job you lost: Maintaining your coverage through COBRA is a possibility but you might find a cheaper option through the Affordable Care Act’s marketplaces. As always, even though open enrollment is closed, anyone who loses a job with health insurance is automatically eligible for a special enrollment period through the marketplaces. The first thing to do after losing job-based coverage is visit HealthCare.gov to check out options. If you qualify for a premium subsidy or Medicaid, there may be options much cheaper than COBRA.
If you have coverage through the ACA marketplaces: If you lost your job, your income is likely dropping, which means you may qualify for a subsidy, or a larger subsidy if you already receive one. Unemployment benefits and the additional $600 temporary supplement count toward your income, but stimulus payments you receive from the government do not. Go to HealthCare.gov and update your income information.
If you have coverage through Medicaid: Keep your coverage and make sure your enrollment status is up to date, so you don’t lose your coverage if you forget to reenroll.
If you are uninsured, you have two options:
- If your monthly income has fallen below 138 percent of the federal poverty level ($1,467 for an individual, or $3,013 for a family of four) and you live in one of the 36 states (or D.C.) that have expanded Medicaid, you may be eligible for Medicaid. If you are receiving unemployment benefits, they count toward your monthly income, but the additional $600 temporary supplement does not count. Medicaid enrollment is open all year; you can sign up anytime. Medicaid eligibility is based on current monthly income, so even if your total annual income is expected to be higher, you may be eligible for Medicaid right now. The best way to apply for Medicaid is through your state Medicaid office.
- If your monthly income exceeds the amount that makes you eligible for Medicaid, you may be able to get covered through the marketplaces. Eleven states and D.C. have opened their marketplaces for a special-enrollment period because of the pandemic.1 Deadlines range from April through mid-June. People with incomes below 400 percent of poverty — $49,960 for an individual and $103,000 for a family of four — are eligible for subsidies. Unemployment benefits count toward your monthly income, as does the $600 supplement payment. Stimulus payments do not count. If you do not live in one of these states, you cannot enroll in marketplace coverage unless you lose your health coverage as a result of losing your job. You can go to HealthCare.gov, click on “See if I can enroll,” and enter your zip code.
Recent Legislation and Executive Branch Actions on Coverage
Congress has passed four major emergency spending bills to address the pandemic and the administration has declared a national emergency. Here is what you should know about what this means for coverage:
- Coverage for coronavirus testing at no cost.
- If you have private insurance, all insurers and employers are required to cover — without cost-sharing — tests and services associated with tests (but only if the visit results in a test) through the duration of the crisis. This does not apply to any treatment you may need. While most plans will likely cover treatment, standard deductibles and copayments will apply. Some health plans, however, have waived copayments for treatment.
- If you have Medicaid, testing is covered without cost-sharing. Whether treatment is subject to copayments will vary by state.
- If you are uninsured, states have the option of using Medicaid to cover testing for uninsured people and those with substandard health plans like short-term policies. Again, this does not apply to any treatment you may need.
What More Could the Trump Administration and Congress Do?
Insurance coverage protects both patients and providers from potentially catastrophic health care costs from severe cases of COVID-19. Patients with poor or no coverage could be hit with significant hospital bills they will likely be unable to pay in full. This also affects hospitals that must cover those costs. While the legislation includes new direct payments to hospitals for COVID-19 related treatment, they will receive less than what they would get from an insured patient. The administration and Congress can do more to financially protect patients, hospitals, community health centers, and physicians including:
- Expand the new Medicaid eligibility option for states to cover COVID-19 treatment without cost-sharing for any uninsured person or someone in a plan that has substandard coverage.
- Require all private insurers, employers, and Medicaid to cover COVID-19 treatment without cost-sharing.
- Create a nationwide special enrollment period for the marketplaces to give uninsured people a chance to get covered. The administration has decided against this option, but it could make sure that all Americans who lose their job-based health insurance know they are eligible for a special-enrollment period. In addition, it could temporarily reduce the documentation required to enroll.
The staggering economic disruption triggered by the coronavirus pandemic is revealing the importance of the Affordable Care Act in providing coverage options for people who lose their job-based insurance. But the pandemic also shines a bright light on the remaining holes in the system: 30 million people uninsured and at least 44 million who are underinsured because of unaffordable deductibles and copayments. The crisis will place added pressure on the states that have not yet expanded Medicaid and may encourage them to move forward with expansion. It also may push Congress to permanently patch the holes in our insurance system. If it does, the next time we face a public health crisis we can be secure in the knowledge that everyone has health coverage and that illness will not be compounded by personal financial catastrophe because of health care costs.
The author thanks Timothy Jost for helpful comments and Gabriella Aboulafia for research assistance.