Most Furloughed Workers Still Covered by Employer-Sponsored Plan

Overall, nationwide healthcare coverage levels have remained steady because many furloughed workers are still receiving healthcare coverage through an employer-sponsored plan, Commonwealth Fund researchers found.

The Commonwealth Fund researchers conducted a survey on employment and healthcare coverage from May to June 2020. The survey encompassed in 2,271 phone interviews. )

“The large share of respondents who said they or a spouse or partner were still getting coverage through a furloughed job accounted for the relative stability of insurance coverage in the findings,” the researchers explained. “Whether those on furlough regain their jobs, or lose them permanently, will determine the longer-term effect of the pandemic on employer-based coverage.”

About one in five of the adults who participated in the survey responded that either they or a spouse or partner had been furloughed or lost their position due to coronavirus.

More than half of those who experienced job disruption due to coronavirus had been furloughed.

Over half of those who were furloughed (53 percent) retained their employer-sponsored health plan coverage.

Two in five adults had received healthcare coverage from their or their partner’s lost job. Some furloughed and laid off employees still have access to a different employer-sponsored health plan through a spouse or partner.

About three in ten respondents who did not have insurance through the affected job were uninsured. The data also indicated that most of these respondents were already uninsured before the coronavirus outbreak. Four factors influenced this:

• Eligibility based on immigration status
• Gaps in the nation’s healthcare coverage due to lack of Medicaid expansion
• High prices on the Affordable Care Act market
• Low consumer education on healthcare coverage options

Others whose job loss did not affect their health insurance were largely enrolled in Medicaid, Medicare, or the individual health insurance market (36 percent).

These findings corroborate Urban Institute research published in late April 2020 which found that income, immigration, and uninsurance prior to the pandemic all played a role in preventing the currently uninsured from obtaining coverage.

According to the Commonwealth Fund researchers, for many adults (59 percent), job loss or a furlough made no impact on their healthcare coverage because the job was not their source of healthcare coverage.

The current job and healthcare climate emphasized the potential turbulence that can result from having healthcare tied to employment, the researchers found.

“When health coverage is not connected to a job, coverage, and access to care can be more stable over time,” they argued. “And given the impact of rising employer plan premiums on many with low and moderate incomes, the availability of federal subsidies through marketplace plans may make such plans a more affordable option for many.”

The researchers offered both short-term and long-term solutions to insurance gaps. In the short-term, they suggested:

• Improving marketing around subsidized Affordable Care Act market plans or Medicaid eligibility
• Streamlining enrollment requirements

For more long-term solutions, the researchers urged the federal government to:

• Design a subsidized insurance option that would be available to the low-income uninsured populations in states that have not engaged in Medicaid expansion
• Improve affordability of subsidized options for higher-income enrollees on the Affordable Care Act market

For those who become unemployed, unemployment compensation can become a barrier to Medicaid eligibility in Medicaid expansion states, Kaiser Family Foundation research recently illuminated.

While Medicaid coverage is still higher in these states, workers who receive unemployment compensation and stimulus money can find themselves ineligible for healthcare coverage assistance because both are counted as income.

“Marketplace subsidies fill in a portion of the gap created by those 15 states’ refusal to expand their Medicaid programs, but until financial assistance is extended to those with lower incomes in those states, many of their residents will be left in highly vulnerable situations when medical needs arise,” the Kaiser Family Foundation researchers emphasized.