COVID-19 Recession to Increase Uninsurance Rates, Test Medicaid

As the economic impact of the coronavirus pandemic continues to worsen, uninsurance rates will increase rapidly and place unprecedented strain on Medicaid programs and the ability of uninsured individuals to seek medical care, according to the Urban Institute.

For more coronavirus updates, visit our resource page, updated twice daily by Xtelligent Healthcare Media.

With the support of the Robert Wood Johnson Foundation, researchers analyzed health insurance coverage prior to, during, and after the previous economic recession to gauge the potential impact of the COVID-19 recession on unemployment rates and access to health insurance.

The Urban Institute analysis found that Medicaid expansion will determine the scale of uninsurance rates across the United States, necessitating policy changes to avoid disproportionate access to medical care.

“Our findings indicate that though joblessness will likely affect uninsurance rates throughout the country, states that did not expand Medicaid under the ACA will see larger increases in uninsurance if current policy fails to adapt,” write authors Anuj Gangopadhyaya and Bowen Garrett.

That said, record unemployment will place outsize strain on existing Medicaid programs in expansion states.

“Moreover, our findings also indicate that Medicaid coverage will sharply increase as workers become unemployed, particularly in Medicaid expansion states,” the authors continue. “However, given that jobless rates may reach unprecedented heights under the COVID-19 pandemic, steep increases in Medicaid coverage will strain state budgets, restricting already limited resources in the very communities hardest hit by the pandemic.”

The comparative analysis showed that the Affordable Care Act was instrumental to reducing uninsurance rates among the unemployed population from 46 percent pre-implementation (2011–2013) to roughly 30 percent post-implementation (2014–2018). And Medicaid expansion was the catalyst for the change.

“The ACA created new pathways for unemployed adults and other working-age adults not in the labor force to obtain health insurance coverage,” Gangopadhyaya and Garrett explain. “Unemployed workers have been far less likely to be uninsured since 2014, following implementation of the ACA’s main coverage provisions. However, uninsurance rates fell much more in states that took advantage of the ACA’s Medicaid expansion.”

Barring Congressional action, the imminent surge in unemployment will pose significant challenges to care access and utilization, which the legal battle of the ACA could exacerbate further.

“The COVID-19 crisis focuses attention on long-standing gaps in the economic and health care safety nets,” the authors maintain. “Depending on what new legislation emerges, many workers will simultaneously lose their health insurance and their ability to earn a living. With the ACA in place, these gaps will be far smaller than they would otherwise be. Though all states will experience severe adverse effects from this crisis, those that expanded Medicaid will be somewhat better positioned to face the difficult months ahead.”

The analysis presents several avenues for federal legislators to explore to mitigate these adverse effects.

“Enabling temporary (at a minimum) and speedy Medicaid expansions in the 15 nonexpansion states and expanding the income range for eligibility for premium subsidies in the ACA marketplaces could help mitigate the rise in uninsurance,” the authors observe. “Providing subsidies for COBRA coverage could help make previously held employer-sponsored coverage options affordable for those who are unemployed but ineligible for Medicaid or marketplace subsidies.”

To buttress Medicaid programs, the research points to further increases in the federal matching to protect the states with the greatest need. According to the analysis, “enhancing Medicaid matching rates beyond those mandated under the Families First Coronavirus Response Act will help secure state finances as states prepare to provide Medicaid coverage to what will likely be record-setting numbers of new enrollees, especially in Medicaid expansion states.”

The Urban Institute report echoes previous analysis by the Kaiser Family Foundation. In a brief published last month, the authors highlighted actions states can take under existing rules to strengthen Medicaid coverage for individuals negatively impacted by the coronavirus pandemic: broadening eligibility, ensuring that eligible residents are enrolled or do enroll in Medicaid, and submitting additional waivers for greater flexibility in coverage and care access from the Centers for Medicare & Medicaid Services.