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Millions Are Uninsured Due To COVID-19: What This Means for Payers

Between February and May of this year, 5.4 million individuals became uninsured due to layoffs in the midst of a pandemic that’s continuing to sweep the nation. While this significantly impacts many individuals and families, it also affects payers in regards to revenue, enrollment, and premium rates for 2021.

A Closer Look at the Numbers: How Many People Will Lose Insurance Coverage

The Urban Institute used “projections data on employment losses by industry, state, and demographic characteristics regularly published by the U.S. Department of Labor” to estimate the following through the end of 2020:

  • 48 million people will live in a household in which someone loses a job due to COVID-19
  • 10.1 million will lose employer-sponsored insurance coverage
  • Of those, 3.3 million will switch to a family member’s employer-sponsored insurance
  • 2.8 will enroll in Medicaid or CHIP
  • 600,000 will enroll in the individual/non-group market
  • 3.5 million will become uninsured

Medicaid Enrollment

The Kaiser Family Foundation estimates that close to 13 million individuals who became uninsured due to job loss in March are eligible for Medicaid. Medicaid enrollment hit 72.3 million in April, a growth of 1.3 million since February. The number of people covered by Medicaid is expected to continue rising throughout the summer.

One potential reason for fewer than expected enrollees—lack of education about eligibility. The Urban Institute study estimates that 34 percent of individuals losing employer coverage will become uninsured in expansion states while 55 percent will become uninsured in non-expansion states.

Linda Blumberg, PhD, lead researcher on the Urban Institute study told HealthPayerIntelligence.com that educating individuals on Medicaid eligibility falls on the state and federal governments but that former employers, social workers and care navigators, as well as Medicaid and CHIP programs can and should all collaborate to ensure patients are educated about potential insurance options.

Impact to Payers & Policy Changes

With the COVID-19 pandemic, it was predicted that payers—particularly employer-sponsored plans—would be significantly impacted. One study estimated a high of $546.6 billion in payer healthcare spending related to COVID-19.

However the Urban Institute found that the majority of individuals losing employment were not covered under employer-sponsored insurance before the pandemic started—aligning with evidence that the pandemic is hitting lower income people hardest.

To help people continue to receive coverage and necessary care, the Centers for Medicare and Medicaid Services (CMS) announced a temporary policy to allow issuers to offer premium reductions in the individual and small group markets.

Looking Forward

According to the Kaiser Family Foundation, “each year, insurers planning to offer health plans on the Affordable Care Act (ACA) marketplaces must submit filings to state regulators detailing their plan offerings and justifying their premiums for the upcoming year.”

While rates and participation aren’t yet finalized, preliminary filings provide an early look into how COVID-19 will impact rates.

  • Overall proposed changes range from a 12 percent decrease to a nearly 32 percent increase—with more than half falling between a 2 percent decrease and 6 percent increase
  • Of 63 filings, 43 percent did not factor COVID-related costs due to uncertainty

In addition to potential changes to premiums, payers play a role in helping employers transition their workforce back to the office. An Optum survey found that 61 percent of organizations will be partnering with their health insurer for assistance while transitioning back to the worksite.

A key focus of this assistance is for behavioral and mental health services. It’s been predicted that mental health utilization will be a key driver of healthcare costs in 2021 and only around half of respondents to the Optum survey reported having emotional and behavioral health resources in place for the transition back to work.

By including behavioral and mental health in payer-employer partnerships, payers can take advantage of the opportunity to better support employers and employers can then support employees by ensuring they have the tools and resources they need to manage their mental health.

Brittany Eastman
Content Marketing Specialist
brittany.eastman@collectivemedical.com