Unemployed Turn to Affordable Care Act Health Plans for Coverage

After losing their employer-sponsored health plans, many adults are shifting to public and non-group plans, emphasizing the important role that the Affordable Care Act plays in health insurance, an Urban Institute survey indicated.

Over 3 million adults lost employer-sponsored health plan coverage between late March and September 2020, the Urban Institute researchers found. These results were similar to a report that the Robert Wood Johnson Foundation and Urban Institute released in September 2020.

However, the Urban Institute found that the Affordable Care Act provided a cushion of coverage for most of those who lost their employer-sponsored health plans.

“Preventing a rise in the uninsured rate is critical, especially while we face a pandemic and resulting recession,” said Mona Shah, senior program officer at the Robert Wood Johnson Foundation. “These data demonstrate that the Affordable Care Act’s protections are working as intended.”

This new data comes from the Urban Institute’s Coronavirus Tracking Survey. The national, online survey collected data from over 4,000 non-elderly adults, according to a press release HealthPayerIntelligence received by email. Urban Institute conducted the second wave of the survey in mid-September 2020.

The 3.1 million Americans who lost their employer-sponsored health plan represented a 1.5 percentage point drop in employer-sponsored coverage nationwide. Employer-sponsored health plans covered 64.9 percent of the nonelderly adult population in late March and 63.4 percent in September.

Critically, however, the 1.5 percentage point drop did not translate into a 1.5 percentage point surge in the uninsurance rate. Instead, the uninsurance rate rose an estimated 0.4 percentage points from 11.5 percent to 11.9 percent in the same timeframe.

However, loss of employer-sponsored health plan may have a larger impact on the family of the individual who lost coverage, as these percentage shifts are much greater.

One in seven respondents noted that a spouse or partner had experienced job loss or a lay-off. The adults in these families saw a nearly eight percentage point drop in employer-sponsored health plan coverage.

Employer-sponsored healthcare coverage for this group went from 55.9 percent coverage in late March 2020 to below half (48 percent) in just four months.

While the uninsured rate among these adults rose 1.5 percentage points, the increases in non-group and Medicaid or Children’s Health Insurance Program (CHIP) coverage were more than double that. Adults in this category saw a 4.0 percentage point increase in Medicaid or CHIP coverage, from 12.8 percent to 16.8 percent. Their nongroup enrollment rose 3.2 percent.

To the researchers, this signaled that more people were gaining coverage from plans bolstered by the Affordable Care Act.

“People experiencing layoffs are also losing their health insurance coverage at work, but the health care safety net strengthened by the ACA has helped mitigate the impact of those coverage losses,” said Michael Karpman, senior research associate at the Urban Institute.  

The Supreme Court case considering the Affordable Care Act’s constitutionality will hear oral arguments on November 10, 2020. The decision may not be released until the end of the term, which concludes in June 2021.

Experts have expressed confidence that the legal battle against the Affordable Care Act will not end in the law being overturned.

“I think there are a lot of ways that the ACA can get upheld and there are many fewer ways that the court can rule that would be damaging to the ACA in terms of striking down operative provisions of the ACA,” Michael Kolber, partner at Manatt Health, told HealthPayerIntelligence.

Nonetheless, reports have come out in recent weeks elucidating the impacts of overturning the Affordable Care Act, including effects beyond coverage loss. These reports underscore a general sentiment in the payer industry which, according to Joel Ario, managing director at Manatt Health, is largely in support of the judicial branch leaving the Act untouched.

“The insurance industry would certainly find this very disruptive, which is why I am not aware of any of the carriers that are supporting this litigation,” Ario told HealthPayerIntelligence in the same interview as his colleague, Kolber.

“Really any of the stakeholders in the system that actually work in healthcare day-to-day, they—as far as can I tell—unanimously are hoping to not disrupt the ACA and that changes to the ACA should happen through a normal political process, not through the court process.”

However, the Commonwealth Fund’s 2020 State Scorecard pointed out ways in which the coronavirus pandemic also exacerbated problems that existed under the Affordable Care Act. Racial disparities increased as life expectancy declined and millions remain without coverage, the scorecard charged.

It blamed Trump Administration policies from holding back the Affordable Care Act from achieving its full potential with policies such as the public charge rule.