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There isn’t an aspect of life that hasn’t been affected by the pandemic this year. What began as a national call for health protection and mitigation efforts quickly transitioned to an entirely new way of life for almost everyone. And with the explosion of online commerce, contactless delivery services, and mask mandates, there’s a new normal for millions of Americans.

Unfortunately, many people were affected by the government-imposed shuttering of businesses in response to the potential health crisis. Millions of Americans didn’t just stay home from work for a few weeks, however. Layoffs and job furloughs earlier on translated to temporary and, for some, a permanent loss of work altogether. And with those job losses, millions also lost their employer-sponsored health insurance plans.

Unemployment trends continue to shift as the economy attempts to surge forward. Many industries are still experiencing loss, though. And as Open Enrollment kicked off earlier this month, many are wondering what the latest unemployment numbers will do to the health exchange. We’ll highlight the various nuances so far and explore what the industry experts are predicting. There could be a few potential impacts on the health exchange that change the way you move forward this year in planning for 2021.

Millions Filed for Unemployment

Forbes reported back in August that in one week alone, 1.106 million people filed for unemployment benefits. By the end of summer, nearly 57.4 million had officially filed in total since March. This is a much larger number than economists had initially predicted. And while some estimate about 20 weeks of overclaiming activity, that could account for about one million Americans, those unemployment numbers are staggering.

You might be diligently keeping up with your local and regional news to see signs of a return to pre-pandemic normalcy. But the truth is, there are still countless industries experiencing hardships including, travel, hospitality, airlines, dining, and entertainment. Unemployment trends suggest the millions of Americans who once worked in these industries are still struggling to regain employment. And it’s not helping that many regions of the U.S. are seeing a resurgence in positive COVID-19 cases, causing economies to step back into mitigation strategies and shutdowns.

There was initial success with the Paycheck Protection Program, whereby government funding was provided to applying businesses to help them continue issuing paychecks to their employees during the shuttering periods. But those loans are now coming due within industries that are facing additional rounds of mitigation efforts and shutdowns. There are still thousands of people without work or who are faced with finding employment elsewhere, through no fault of their own.

A Massive Loss in Healthcare

With the mass layoffs and unemployment came a significant number of individuals and families who lost their employer-sponsored health insurance plans. The Kaiser Family Foundation estimates nearly 50 million workers are unemployed and extends to lost coverage for them and their dependents. Even those workers whose employers subscribed to the PPP funding are now facing unemployment due to many of those businesses closing their doors altogether. Considering we’re in a time of a pandemic, not having health insurance is a terrifying prospect.

Additionally, states were experiencing system issues with the influx of people filing for unemployment, along with hemorrhaging state budgets. And there was a tidal wave of applicants on the health exchanges, seeking health insurance providers. Many analysts speculate, when faced with hardships, families also sought applications for private plans, Medicare, and Medicaid.

Unemployment Benefits Affecting Marketplace Subsidies

Many Americans qualified for pandemic unemployment assistance, and along with it, the additional government boost of $600 each week. In some instances, Americans were earning more money on unemployment than they did at their former jobs. A secondary consideration involves the more than 10.5 million people already enrolled in health plans within the federal exchange or Marketplace. Those individuals who qualified for the extra weekly unemployment funds, and have Marketplace tax benefits, might want to revisit their income calculations. The Cares Act does protect the weekly money from counting against those with Medicaid coverage. However, the eligibility requirement for Marketplace tax credits, unfortunately, include those additional unemployment payments as a part of the income projections thresholds.

Health Insurance Providers Respond to Increased Demand

Many may be more interested in knowing how the pandemic has affected the Marketplace rates for health insurance. And with the increased demand and strain on providers, you can expect increases among premium rates. According to the KFF, because of the impact COVID-19 has had on the member enrollment and secondary effects, premium rates have risen 8.4% for 2021 coverage plans. This percentage is designed to address an increase in acute costs for providers to cover, including testing, treatment, and vaccination of patients. Experts also predict a rise in morbidity concerns due to coping with situations like job loss, bankruptcy, anxiety, or stress. Other secondary effects that analysts predict will impact the marketplace are a wave of potential health conditions that arise due to a halt in preventive care during the shutdowns.

A Spotlight on Areas of Improvement

From a Marketplace perspective, the pandemic has shed light on a variety of flaws. But this allows for improvements that, in the end, will only be better for those who need it most. If COVID-19 has taught us anything, it’s that there is always a need to be better when it comes to health. Insurance providers have expanded to include telehealth services, behavioral health solutions, and better data sharing for an improved patient journey. There is a call for better platforms to promote preventive care and price transparency. And while health insurance plans will continue to evolve with the ever-changing customer needs, there is a keen eye on connecting technology, healthcare, and people.

There’s no question. The pandemic is changing the rules, and industries are quickly adapting for a new normal. The number of people still unemployed suggests that despite an economic turnaround in many regions, the impacts on the health exchange could be long-term. To stay ahead of the unemployment trends and the impacts on the health exchange and to make your best decisions for 2021, contact us. The Softheon team can be your trusted health insurance and Marketplace advisor. And when you need better digital transformation tools to navigate these shifting trends, you can explore our demo to learn more about how we can help.