Employer-Sponsored Healthcare Coverage Fell by 3.3 M, 2M Uninsured

September 22, 2020 - Employer-sponsored healthcare coverage dropped nearly two percent between late-April 2020 and mid-July 2020, according to a Robert Wood Johnson Foundation (RWJF) report that corroborates a couple projections of previous studies.

The RWJF report leveraged data from the Census Bureau’s Household Pulse Survey. The survey first fielded every week between April 23 and July 21, 2020. The average weekly sample size was 90,000 participants.

The researchers found that between late April and mid-July, approximately 3.3 million individuals lost employer sponsored health plan coverage. Additionally, the number of uninsured individuals increased by around two million.

Of those who lost their employer-sponsored health plan coverage, three million were men.

Additionally, 1.6 million—or nearly half of those who lost employer-sponsored insurance—were Hispanic individuals. The non-Hispanic Asian population saw a 7.6 percent drop in employer-sponsored health plan coverage between late April and mid-July paired with a 5 percent increase in public payer coverage.

Meanwhile, the non-Hispanic White community suffered only a 0.8 percent drop in employer-sponsored insurance. Employer-sponsored healthcare coverage in the non-Hispanic Black community actually rose by 1.5 percent.

The age group between 18 and 39 saw a 2.4 percentage point decrease in employer-sponsored health plan coverage and 2.1 million of those who received a high school education or less lost their employer-sponsored coverage.

Demographics that experienced high levels of employer-sponsored insurance loss were also likely to see increased levels of uninsurance.

Uninsurance was also slightly more prevalent in states that did not engage in Medicaid expansion. The twelve states that have not expanded Medicaid saw uninsurance rise by 1.7 percentage points or 1.1 million adults, while the 39 Medicaid expansion states saw an insignificant rise in uninsurance that left 800,000 more individuals without coverage.

Missouri and Oklahoma have both decided to expand their Medicaid programs during the coronavirus pandemic, in light of burgeoning uninsurance.

“These labor market circumstances also suggest many people remain at risk of losing coverage as the recession continues and more job losses become permanent,” the report stated.

The RWJF researchers urged policymakers to consider expanding subsidies on the Affordable Care Act marketplaces. Furthermore, they recommended measures to increase outreach and enrollment assistance.

The September 2020 RWJF report supports various reports that preceded it.

This is certainly not the first attempt to gauge the impact that the coronavirus pandemic inflicted on insurance coverage. Previous reports had projected very high employer-sponsored insurance losses. One report estimated that as many as 27 million individuals could lose their employer-sponsored health plans.

When the numbers turned out to be much lower—3.3 million as of mid-July 2020, according to the September RWJF report— experts found that coronavirus-driven unemployment struck hardest at industries that typically do not offer employer-sponsored health insurance.

This is underscored by the fact that the individuals most likely to lose their employer-sponsored health insurance are low-income and have lower levels of formal education, a July 2020 RWJF report indicated.

This latest September 2020 report from RWJF supports another consistent theme from these studies: that coronavirus-related unemployment would drive racial disparities in healthcare coverage even deeper.

For example, a recent Avalere report anticipated that by the end of 2020 three million Hispanic individuals—or 13 percent of the Hispanic community—may have lost their employer-sponsored health insurance.

Lastly, the RWJF report underscores how Medicaid expansion can soften the blow of coronavirus-related job loss.

At a hypothetical 20 percent unemployment, Urban Institute projected that at least 25 percent of the populations in the Medicaid expansion states would be uninsured. At the same hypothetical unemployment rate in nonexpansion states, uninsurance would be at least 40 percent in the nonexpansion states.

The current unemployment rate is 14.5 percent in April 2020 and dropped to 8.4 percent by August 2020, never hitting 20 percent unemployment so far.

Nonetheless, the general expectation that uninsurance levels in nonexpansion states would be a little less than double the uninsurance in Medicaid expansion states is close to proving true—1.7 percentage point increase in uninsurance in nonexpansion states versus a 0.6 percent increase in Medicaid expansion states.

Between more states expanding their Medicaid programs and uncertainties around the economic future, circumstances are constantly changing, proving the need for studies like these. But the primary solution to employer-sponsored insurance loss remains the same.

“Ultimately, stemming coverage losses will require improved efforts to reduce transmission of the novel coronavirus so that more segments of the economy can reopen safely and foster a sustained labor market recovery,” the researchers reminded.