Coronavirus and the U.S. health insurance system is 'a recipe for disaster'
The economic shock from the coronavirus, or COVID-19, has been brutal on the American workforce.
A recent report from the Economic Policy Institute (EPI) estimates that 3.5 million workers likely lost their employer-provided health insurance as a result of coronavirus layoffs between March 23 and April 2. That doesn’t factor in if these workers have any dependents that were on their health care plan as well.
Taking into account the latest jobless claims numbers, 16,780,000 unemployment claims were filed in three weeks. Meanwhile, 49% of Americans receive insurance through their employer. And given the cost of treatment for COVID-19 (and the cost of health care in the U.S. more generally), that’s a problem.
“The danger is that if there isn’t a concerted effort to address the health care costs, we could see continued growth of uninsured Americans and small and large businesses dropping out of operating health coverage,” Peter Lee, executive director of Covered California, the state’s health care marketplace, told Yahoo Finance. “That could mean in future years that we’re less ready for the next epidemic or more Americans are showing up in emergency rooms without insurance. That’s a recipe for disaster.”
Health care coverage options
If Americans lose employer health coverage because of coronavirus, there are several options available.
Read more: COBRA insurance: How to file if you lose your job
COBRA is one option, which means the individual continues the same health care coverage they had under their employer-based health insurance, though COBRA has higher premium payments since there is no longer an employer contribution. And if income is considered low enough, a person may be eligible for Medicaid.
And because a layoff is considered a qualifying event, an individual is eligible for a special enrollment period, which allows them to sign up for health care coverage through the Obamacare marketplace.
Read more: How to get ACA health insurance if you lose your job
The EPI report recommended that the federal government create a special enrollment period for the 38 states that have a federally-run health care marketplace. However, the Trump administration decided against that route, instead promising “cash payments” to hospitals that treat uninsured patients.
‘A huge unexpected expense for health insurance companies’
Josh Bivens, a research director at EPI, said that the number of people who have lost health insurance because of the coronavirus shock would “definitely” lead to increased health care costs down the line.
“I do think more generally, the coronavirus health shock is going to lead to rising health insurance premiums across the board in the next year or so,” Bivens said. “It’s been a huge unexpected expense for health insurance companies, and they’re going to try to recoup it with higher premiums down the road. I think there’s going to be a lot of upward pressure on premiums across the board.”