WASHINGTON, D.C. – Roughly 27 million Americans and their families have lost their health insurance after sweeping layoffs and business closures during the coronavirus lockdown. Nearly 80 percent of Americans who lost their employer-backed health plans might be eligible for coverage from state-administered Medicaid plans and other plans through the Affordable Care Act, but such could prove unlikely for a number of reasons.
Millions of others — including dependents who relied on plans from another member of their family — are ineligible, leaving them without any insurance options, according to a report from the Kaiser Family Foundation, The Independent reported.
Roughly 6 million people who lost their employer-provided insurance won’t be eligible for subsidized coverage, including nearly 4 million others whose family’s income falls above eligibility limits and thousands of others who don’t meet citizenship or immigration requirements, the report says.
Few Americans will fall into the so-called “coverage gap” after losing their job because of wages earned before they were laid off combined with unemployment benefits and a temporary $600-a-week boost from supplemental relief, which could push the annual income for many newly unemployed Americans into a threshold making them ineligible for Medicaid marketplace subsidies in states that didn’t expand them.
By January 2021, as unemployment benefits shrink, that coverage gap could grow by 80 percent, with nearly 2 million Americans enrolling in Medicaid or other subsidized plans. But many states facing shrinking tax revenues are bracing for deep cuts to Medicaid, leaving the program’s future for many Americans in jeopardy.
More than 33 million Americans have filed for unemployment insurance within the last two months, according to the Bureau of Labour Statistics. Analysts predict nationwide unemployment reaching 20 percent or higher, not seen since the Great Depression.
In their latest bill, Congressional Democrats have proposed subsidizing the cost of COBRA benefits, which allow people to continue their employer-backed health coverage after they leave a job, but the beneficiary is responsible for picking up both their share and former employer’s share of the premium costs, in addition to all out-of-pocket costs.
COBRA is prohibitively expensive for most Americans, with fewer than 10 percent of workers using the plan. Employer premiums average $7,188 for a single person and $20,576 for a family of four, plus a 2 percent administrative fee. It’s meant as a temporary stop-gap between jobs. The HEROES Act proposes that the government absorbs those costs while Americans are out of work.
Critics have called the plan a “bailout” for the health insurance industry, which is losing customers at the same rate of jobless claims. Health insurance companies would reap the benefits of federally subsidized costs, while the legislation would also retain current disparities in coverage — laid-off workers with more-expensive plans could continue their coverage, for example.
Before the pandemic, more than 26 million people already were uninsured, and millions of others were considered “underinsured” with costly plans that leave them with little if any room to cover out-of-pocket expenses. Lawmakers have instead supported a plan that would open federal Medicare coverage to people who lost their plans for the duration of the COVID-19 lockdown.
Adam Gaffney, a critical care doctor and president of Physicians for a National Health Program, said that “subsidizing the insurers is not going to cut it. … We need emergency Medicare expansion for the uninsured, and coverage of out-of-pocket costs for the insured, now.”
Wendell Potter, a former health insurance executive and Medicare for All advocate, told The Independent that:
“It is mind-boggling that [Congress] would be willing to spend more money, more taxpayers’ dollars, to make sure people have access to the care they need, under the COBRA plan, rather than existing Medicare program”.
“It is maddening to think our elected officials would think that’s the preferred choice,” he said.