Health Insurance For Unemployed Individuals – The economic fallout from the coronavirus pandemic has led to historic levels of job losses in the United States. Social distancing policies required to deal with the crisis have led many businesses to reduce hours, suspend operations or close altogether. Between March 1st
And as of May 2, 2020, more than 31 million people had applied for unemployment insurance. The actual loss of jobs and income is likely even higher, as some people may be marginally employed or may not have applied for benefits. Some of those unemployed may return to work as social distancing restrictions are eased, although further job losses are also possible if the economic downturn continues or deepens.
Health Insurance For Unemployed Individuals
In addition to loss of income, losing a job carries the risk of losing health insurance for people who were receiving health coverage as a benefit through their employer. People who frequently lose their employer-sponsored insurance (ESI) may choose to continue it for a period by paying the full premium (called COBRA continuation) or may become eligible for Medicaid or subsidized coverage through Affordable Care Marketplaces Act (ACA). Over time, as unemployment benefits run out, some may fall into the “coverage gap” that exists in states that have not expanded Medicaid under the ACA.
Many Americans Are Getting More Money From Unemployment Than They Were From Their Jobs
In this analysis, we examine the potential loss of ESI among individuals in families where someone lost their job between March 1
, 2020 and calculate their eligibility for ACA coverage, including Medicaid and marketplace subsidies, as well as private coverage as a dependent (see detailed methods at the end of this brief). To show their eligibility as state and federal unemployment insurance (UI) benefits end, we show eligibility for this population from May 2020 and January 2021, when most will have exhausted their UI benefits.
Eligibility for health coverage for people who lose ESI depends on many factors, including income while working and household income while unemployed, residency status, and marital status. Some people may not qualify for coverage options and others may be eligible but not enrolled. Some employers may temporarily continue coverage after a job loss (for example, until the end of the month), but such coverage extensions are usually limited to short periods.
Medicaid: Some people who lose their jobs and health coverage—especially those who live in states that expanded Medicaid under the ACA—may become newly eligible1 for Medicaid if their income falls below state eligibility limits ( 138% of poverty in states that expanded under the ACA). For Medicaid eligibility, income is calculated based on other income in the family plus any state unemployment benefits received (although the federal supplemental payment of $600 per week available through the end of July is excluded). Income is determined on a current basis, so past pay for workers who are recently unemployed is not relevant. In states that have not expanded Medicaid under the ACA, eligibility is generally limited to parents with very low incomes (usually below 50% of poverty, and in some states much less). As a result, many adults may fall into the “coverage gap” that exists for those with incomes above Medicaid limits but below poverty (which is the minimum eligibility threshold for purchase subsidies under the ACA). Undocumented immigrants are not eligible for Medicaid, and recent immigrants (those who have been here for less than five years) are not eligible in most cases.
An Unemployment Insurance Universal Coverage Guarantee
Purchase: ACA Marketplace coverage is available to legal residents who do not qualify for Medicaid and do not have an affordable ESI offering. Market coverage subsidies are available to people with household incomes between 100% and 400% of poverty. Some people who lose ESI may be newly eligible for income-based subsidies, based on other family income plus any state and new federal unemployment benefits they received (including the $600-a-week federal supplement, unlike Medicaid).2 While current income is used for Medicaid eligibility, annual income for the calendar year is used for purchase subsidy eligibility. Advance grants are available based on estimated annual income, but grants are reconciled based on actual income on the tax return filed the following year. Individuals who lose ESI due to job loss are eligible for a special enrollment period (SEP) to purchase coverage.3 As with Medicaid, undocumented immigrants are not eligible for coverage or purchase subsidies. However, recent immigrants, including those whose income makes them otherwise eligible for Medicaid, may receive purchase subsidies.
ESI Dependent Coverage: Individuals who lose their jobs may be eligible for ESI as dependents under a spouse’s or parent’s employment-based coverage. Some people may have been covered as a dependent before losing their job, and some may switch from their own coverage to coverage as a dependent.
COBRA: Many people who lose job-based insurance can continue that coverage through COBRA, though it’s usually quite expensive since unemployed workers generally have to pay the full premium — employer premiums average $7,188 for an individual and $20,576 for a family of four – plus an additional 2%. People who qualify for subsidized coverage through Medicaid or the marketplaces are likely to choose this coverage over COBRA, although COBRA may be the only option available to some people who do not meet the income requirements for ACA coverage.
Short-term plans: Short-term plans, which can be offered for up to a year and are sometimes renewable under revised rules from the Trump administration, are also a possible option for people who lose employer-sponsored insurance. These plans generally have lower premiums than COBRA- or ACA-compliant coverage, as they often provide more limited benefits and typically deny coverage to people with pre-existing conditions. Even when coverage is issued, insurers may generally dispute claims for benefits they believe stemmed from pre-existing medical problems. Given the long delay between initial infection and illness with COVID-19, these plans are more risky than usual during the current pandemic. People cannot use ACA subsidies for short-term plan premiums.
What To Do After Applying For Health Care On Paper Or By Phone
Our analysis looks at eligibility for Medicaid, purchase subsidies, and dependent ESI coverage. We do not count COBRA enrollment, short-term plans, or temporary continuation of ESI. See Methods for more details.
Between March 1, 2020 and May 2, 2020, we estimate that nearly 78 million people lived in a household where someone lost their job. Most people in these families (61%, or 47.5 million) were covered by ESI before the job loss. Nearly one in five (17%) had Medicaid, and nearly one in ten (9%) were uninsured. The remaining share either had direct purchase (purchase) coverage (7%) or had other coverage such as Medicare or military coverage (6%) (Figure 1).
Figure 1: Health insurance coverage before and after job loss among family members experiencing job loss as of May 2, 2020
We estimate that, as of May 2, 2020, nearly 27 million people could potentially lose ESI and become uninsured after losing a job (Figure 1). This total includes people who lost their own ESI and those who lost dependent coverage when a family member lost a job and ESI. In addition, some people who would otherwise lose ESI can maintain work-based coverage by switching to a plan offered to a family member: we estimate that 19 million people switch to coverage offered by the employer of a working spouse or parent. A very small number of people who lose ESI (1.6 million) also had another source of coverage at the same time (such as Medicare) and maintain that other coverage. These coverage loss estimates are based on our assumptions about who most likely applied for UI as of May 2
Indiana Health Insurance
Among people who become uninsured after job loss, we estimate that nearly half (12.7 million) are eligible for Medicaid, and an additional 8.4 million are eligible for purchase subsidies, as of May 2020 (Figure 2). Overall, 79% of those who lose ESI and become uninsured are eligible for publicly subsidized coverage in May. About 5.7 million people who lose ESI due to job loss are ineligible for subsidized coverage, including nearly 150,000 people who fall into the coverage gap, 3.7 million people ineligible because of family income above eligibility limits, 1.3 million people we estimate have an affordable ESI offering through another working family member, and about 530,000 people who do not meet the citizenship or immigration requirements. We predict that very few people fall into the coverage gap immediately after job loss (as of May 2020) because pre-job loss wages plus unemployment benefits (including the $600-a-week temporary federal supplement added by Congress) push the annual income for many unemployed nonexpansion states above the poverty level, making them eligible for ACA purchase subsidies for the remainder of the calendar year.
By January 2021, when UI benefits end for most people, we estimate that eligibility shifts to nearly 17 million eligible for Medicaid and about 6 million eligible for purchase subsidies (Figure 2), assuming those they are recently unemployed have not found a job. Many unemployed workers eligible for ACA marketplace subsidies during 2020 would be eligible for Medicaid or fall into the coverage gap during 2021. The number in the coverage gap rises to 1.9 million (a more than 80% increase
