Countless Americans Have Lost Employer Coverage. What Can Be Done?

Losing access to health insurance is anxiety-inducing in the best of times -- but amid a global pandemic, when infection is only ever one unmasked and unlucky interaction away, the prospect is downright frightening.

Over the last several months, COVID-19 has created a tremendous amount of economic uncertainty. Businesses of all industries and sizes have felt the effects and needed to furlough or lay off their staff. Millions of people have lost their jobs and, with them, their employer-provided health insurance.

Recent statistics shared by the Washington Post indicate that in the three months between April and June, the United States lost 1.85 million businesses, and millions more struggled to access financing and operate at reduced capacity. The Labor Department reports that 3.7 million people lost their jobs in June; these losses remained steady through July and are likely to increase to 8.7 million by the end of the year.

Moreover, many of the jobs lost will be permanently gone. At the end of July, Goldman Sachs released an analysis noting that while 83% of the job losses reported between February and June had been categorized as temporary, only 35% of the losses recorded in July were deemed as such.

“What’s happening now is more companies that thought they could survive are giving up. The most painful time to lose your job may well be coming up,” Nicholas Bloom, an economics professor at Stanford, recently told reporters for Politico.

These permanent losses are problematic, Bloom goes onto explain, because they tend to lead to long-term unemployment and slower economic recovery. Rather than returning to work once economic conditions stabilize, permanently laid-off workers need to wait for employers to create a new job that matches their skills, and then apply for the role. But during this period, they lose their employer-supported health insurance and need to either pay out of pocket for an alternate plan or go without coverage.

In usual times, over 156 million Americans-- or about 49% of the country’s total population -- receive employer-sponsored insurance. But in the four months between February and May, roughly 5.4 American workers lost their coverage. The nonpartisan consumer advocacy group that shared these findings noted that the increase in uninsured workers was nearly 40% higher than the next-highest increase, which took place during the 2008 recession.

The consequences of going without health insurance can be painfully severe. As one writer for the Center of Infectious Disease Research and Policy summarized this summer: “Going without coverage can have serious health consequences for the uninsured because they receive less preventive care; and delayed care often results in serious illness or other health problems. The financial consequences of not having insurance can also be severe, leading to difficulties paying medical bills and higher rates of medical debt among the uninsured.”

The last point is particularly pressing during the pandemic. Analysts for the Kaiser Family Foundation estimate that between two and seven percent of uninsured people will need hospitalization for COVID-19. Even for less severe cases, the bill for inpatient treatment of respiratory infections with complications can cost over $13,000, if one uses average Medicare payments as a baseline. Analysts note that for severe hospitalizations that require ventilator support for several days, the bill can run even higher -- over $40,000.

To add insult to injury, most uninsured patients shoulder a higher cost burden because they don’t have the clout to negotiate with a hospital. Moreover, while the Emergency Medical Treatment and Labor Act mandates that hospitals screen and stabilize patients with emergent conditions, they are not required to do so for free, nor are they compelled to treat non-life-threatening conditions. As a result, uninsured patients tend to be less willing to seek emergency care when ill, and often face high charges when they visit care centers.

A recent report from KFF further notes that as a result of these factors, uninsured patients “will likely likely face unique barriers accessing COVID-19 testing and treatment services.” Researchers pointed out that over half of uninsured patients in the U.S. do not have a go-to place for medicare care, and 20% of uninsured patients chose to forego necessary care due to cost in 2018.

“Studies repeatedly demonstrate that uninsured people are less likely than those with insurance to receive services for major health conditions and chronic diseases,” KFF researchers wrote. “Without a usual source of care, the uninsured may not know where to go to get tested if they think they have been exposed to the virus and may forego testing or care out of fear of having to pay out-of-pocket for the test.”

This trend poses a real and pressing threat to public health, especially since we are unlikely to have a vaccine available for widespread distribution until next year. Even then, it will take a while for people to vaccinate, the economy to recover, and insurance-providing jobs to reappear.

So, if we assume that rates of employer-provided health insurance will not recover for at least a year or two, those of us in the healthcare sector need to ask ourselves -- what can we do to patch the insurance shortfall? How can we connect people to insurance? There is a clear and pressing need to do so, given that higher rates of uninsurance prevent people from accessing testing and care.

To answer this question, we first need to consider what the federal government is already doing. The actions taken to date have been invaluable, but also painfully limited in their scope. The Families First Coronavirus Response Act, which was passed in March, gives states the option to expand their Medicaid coverage to encompass COVID-19 testing and diagnosis for uninsured individuals. However, the Act does not cover the cost of treatment if a patient is confirmed to have the virus.

As we move forward, we need to prioritize a funding solution that provides uninsured patients with the coverage and financial reassurance they need to seek testing, receive care, and stay home until they are well. Otherwise, we will continue to see avoidable disease spread and a drawn-out pandemic recovery.

The presidential election will be paramount to this policymaking process. While it is unclear what the next presidential term will bring to the nation’s COVID-19 response, it is clear that the federal government will need to address how they plan to expand protections to cover the insurance shortfall caused by economic contraction.

One factor to consider during the next several months will be the persistence or fall of the Affordable Care Act. If the current administration’s efforts to remove the program succeed, the disappearance of the ACA could remove coverage for up to 23 million Americans -- unless a replacement program is instituted. As of now, there is no replacement in place for the potential repeal; this lack could drastically exacerbate the public health problem we already see developing among uninsured, unemployed, and at-risk patients.

While it remains to be seen what steps will be taken, the need to potent the un- and underinsured during the pandemic is clear. We must hope that the ACA will not be repealed during this tense time -- or that, at the very least, measures will be taken to fill the gap and bridge the shortfall before the program’s repeal leaves even more unemployed people vulnerable.

Mary Tolan, is co-founder and managing partner of Chicago Pacific Founder.