New Report Estimates Major Exodus in Commercial Insurance Market

New Report Estimates Major Exodus in Commercial Insurance Market

According to estimates from the Kaiser Family Foundation’s recent report, 27 million Americans could potentially lose job-based insurance and become uninsured following job loss. KFF crunched this number after studying the 31 million Americans who filed for unemployment insurance between March 1 and May 2 due to the COVID-19 pandemic.

The impact of unemployment and coverage loss vary by state. Eight states (California, Texas, New York, Pennsylvania, Georgia, Florida, Michigan and Ohio) account for 49% of all people who lose job-based coverage.

If one loses job-based insurance coverage, he or she may be eligible for Medicaid if his or her income falls below state Medicaid eligibility requirements. This is more likely to happen if the state in which one resides has expanded Medicaid. Of the 27 million Americans, nearly half (12.7 million) are eligible for Medicaid.

If one is not eligible for Medicaid, he or she can qualify for a special enrollment period due to job loss for marketplace coverage. Roughly one-third (8.4 million) are eligible for marketplace subsidies.

Roughly one-fifth of the 27 million (10.7 million) will struggle to gain coverage due to being in a “coverage gap” for a state that did not expand Medicaid or because they are ineligible for other kinds of subsidized coverage.

KFF estimates the dynamics of the exodus out of the commercial insurance market will change as unemployment benefits expire by January 2021. The markets are expected to tilt towards Medicaid. By this time, 17 million are estimated to be eligible for Medicaid, up from 12.7 million. 6 million will then be eligible for marketplace subsidies, down from 8.4 million. By this time, those in the “coverage gap” will increase to 1.9 million from 150,000.

If one chooses to extend his or her job-based insurance coverage, he or she can do so through COBRA, though the employee would likely be footing the bill for the entire premium. The House’s latest relief bill would fully subsidize the cost of maintaining an employer plan through COBRA, according to Axios.

Another coverage option for those losing job-based insurance coverage is short-term plans. These plans carry lower premiums, as they offer more limited benefits. Marketplace subsidies do not apply towards these plans, which can be offered up to a year.

Sources:

  1. https://www.axios.com/coronavirus-27-million-lost-employer-health-insurance-c77fe46a-691d-49b3-9cd2-3ad6d19df159.html
  2. https://www.kff.org/coronavirus-covid-19/issue-brief/eligibility-for-aca-health-coverage-following-job-loss/

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