The COVID-19 pandemic presents complex challenges for the US health care system and social safety net programs. In a new blog post series, IMPAQ health, workforce, and advanced analytics experts bring you timely updates and informed insights on the intersection of COVID-19 and pressing policy issues.
According to new unemployment filings, since March 22, 26 million Americans have lost their jobs due to COVID-19 shutdowns—the largest number in American history—with each week adding millions more Americans out of work. This scale of job loss far exceeds anything since the Great Depression. The health impacts of the virus are equally grim. As of April 29, over one million Americans have contracted COVID-19, and over 60,000 have died.
According to the latest statistics, 54 percent of Americans received health insurance through their employer in 2019. For the tens of millions who are unemployed as a result of the coronavirus, this presents a major threat to their access to insurance coverage. Some unemployed Americans have the option to enroll in Medicaid while others may opt for COBRA coverage, which provides temporary insurance coverage through their employer’s plan, but they are likely to face very high premiums. The Affordable Care Act (ACA) provides additional options to protect those without sufficient employer-based insurance through two major streams: Medicaid Expansion and Qualified Health Plans (QHPs) available through a federal or state-based exchange.
Given that unemployment is expected to continue to rise and many are vulnerable to contracting COVID-19 in the months to come, what are the options for those seeking protection? As you may have guessed, the answer varies significantly by where you live in America.
What are my insurance options and how does that vary based on my state?
In all 50 states and Washington, D.C., QHPs are available on either a federal or state health insurance exchange, often at a subsidized rate to those with low to moderate incomes. Currently, 38 states rely on the federal health insurance exchange, which is operated by the federal government. Thirteen states created their own state-based exchanges, which allow those states to operate independently from the federal government. Below, we break down how health insurance options vary by states using the federal or state-based exchanges, and how Medicaid expansion plays a role.
ACA Safety Net Coverage Options by State
State-based exchanges with Medicaid expansion are in the minority, but offer the largest safety net for Americans affected by coronavirus.
States on the Federal Health Insurance Exchange (Healthcare.gov)
For the Americans living in the 38 states which rely on the federal exchange platform, or healthcare.gov, individuals and families can typically enroll in a QHP from November 1–December 15 during a period known as Open Enrollment (OE). OE is restricted to this timeframe to reduce the risk of adverse selection (i.e., signing up for an insurance plan only when you become sick).
For the 237 million Americans who live in these states, outside of OE, enrollment in a QHP is still possible through a Special Enrollment Period (SEP). SEPs are granted following qualifying life events such as loss of job-based health coverage, changes to one’s family structure, or other special circumstances. The federal government has the authority to determine what qualifies for a SEP on the federal exchange and controls the marketing budget for this coverage option.
As of now, the president and his administration do not plan to re-open health insurance enrollment for the states using the federal exchange. Instead, the recently approved Coronavirus Aid, Relief and Economic Security (CARES) Act allocated a $100 billion hospital aid fund to be used, in part, to reimburse hospitals for COVID-19 services rendered to uninsured patients. On April 24, another $75 billion was allocated for hospitals in the second aid package. The federal funding packages allow uninsured individuals to seek care quickly but may place a financial burden on hospitals and providers awaiting reimbursement. States that have not expanded Medicaid are responsible for a larger share of these costs, which may pose a challenge as tax revenue dwindles due to increased job losses.
Health insurance options for individuals living in federal exchange states are further influenced by whether or not the state has opted to expand Medicaid:
- States on the Federal Exchange without Medicaid Expansion (15 States)
Americans living in the 15 states using the federal exchange that have not expanded Medicaid coverage face a much greater challenge accessing health insurance than other Americans. As of 2018, 2,324,000 adults in these states are neither eligible for Medicaid or ACA exchange subsidies. A larger proportion of Black Americans live in these states, making them disproportionately affected by limited insurance access. In addition, COVID-19 is disproportionately affecting people of color throughout the United States, further highlighting the lack of a critical safety net during this pandemic.
- States on the Federal Exchange with Medicaid Expansion (23 states)
There are 23 states that use the federal exchange and have expanded Medicaid. Since the Trump administration did not create a SEP for COVID-19, these states do not have the authority to create SEPs for public health emergencies and have limited ability to market insurance plans directly to their residents. As a result, even though they are eligible, many newly unemployed individuals may not attempt to enroll in health insurance or may enroll in COBRA coverage only to face expensive, unsubsidized costs. Low-income adults with incomes up to 138 percent of the federal poverty level (around $12,760 for individuals and $21,720 for a family of three) in these states can enroll in Medicaid, but will have a less streamlined application experience.
While these states provide a safety net for many low-income adults through Medicaid, they lack the flexibility to provide affordable coverage to all residents who need it.
State-based Exchanges with Medicaid Expansion (13 states)
Currently, 12 states and the District of Columbia operate their own health insurance exchanges. Every state that created its own exchange also opted to expand Medicaid. These states provide the largest safety net for Americans by offering increased access to health insurance and greater flexibility in obtaining health insurance.
For example, many state-based exchanges provide information on private plans and Medicaid on the same website, offer state-specific enrollment assistance, and dedicate more of their budget to target outreach to vulnerable populations.
For the 89 million Americans living in 12 of these 13 states—Idaho excluded—, there are now new SEPs due to COVID-19. These SEPs are open to anyone and are equivalent to OE. These COVID-19 SEPs vary in length from one month in Connecticut to three months in Maryland.
The White House, Congress, and Advocates Weigh In
Alex Azar, Secretary of the Department of Health and Human Services, recently reminded those who have lost employer-based insurance that, “You would be eligible for a special enrollment period on the health care exchanges and depending on your state, you may be eligible for Medicaid.” In the same April 3rd press briefing, Secretary Azar stated that the CARES Act would reimburse providers at Medicare rates while prohibiting balance billing—the practice of billing patients for the amount not covered by their insurer—often catching patients by surprise.
While the CARES Act is intended to address the costs of treating the uninsured, it is unclear how much of the funds will be used to cover the estimated $14-42 billion in services for COVID-19 hospitalizations. Given that the White House does not plan to open enrollment on the federal exchange, Democrats in the Congress and Senate are now pushing for additional Medicaid funding and COBRA subsidies.
Several advocacy groups, including the Association for Community Affiliated Plans and the Alliance of Community Health Plans, urged the president to re-open the remaining 38 exchanges to ensure the goals of the ACA are realized—providing care for the most vulnerable Americans. The Health Management Associates, a healthcare policy firm, anticipates that as many as 35 million adults could lose their employer-based insurance as COVID-19 continues to eliminate jobs.
In a conversation with the IMPAQ authors of this post, Sabrina Corlette, J.D., founder and co-director of the Georgetown University Center on Health Insurance Reforms, offered additional insight into the benefits of creating a COVID-19-related SEP on the federal exchange. “Early anecdotal reports suggest that these SEPs are serving as a critical safety net for people who did not enroll in the fall,” said Corlette, who went on to explain that early age demographic data suggests that these new enrollees are younger, which may strengthen the overall risk pool.
In contrast, Corlette also provided insight into why Americans living in states without COVID-19-related SEPs may have trouble signing up for an SEP they may be eligible for due to job loss. “Individuals who apply for coverage through an SEP will be asked to project their yearly income, which is difficult for many to predict in these uncertain times,” she said.
Adding to the confusion, there is an overall lack of resources available for consumers and navigators using the federal exchange to explain how aid such as unemployment benefits and stimulus checks impact projected income. Without the ability or knowledge of how to accurately enroll in health insurance provided by the ACA, individuals remain vulnerable to high health care costs and limited access to care.
Looking Forward: Will our ACA Safety Net Hold?
States operating their own exchanges are ultimately in better positions to offer accessible care to those most vulnerable during the pandemic. By providing greater access to health insurance, these states are in turn increasing access to health care.
Uninsured individuals in the 38 states using healthcare.gov can still access free care in theory, but safety net providers are facing increasingly strained resources, which make providing quality care and accessing providers more difficult—especially in rural areas. Providers face additional financial strain by postponing lucrative elective procedures to conserve resources for treating COVID-19. Health care layoffs have already begun, accounting for 43,000 job losses in March alone. While these jobs are likely to see a resurgence following the pandemic, it is alarming that so many are left vulnerable from what is typically a growing industry.
Disproportionate Impacts on People of Color
The effects of limited private insurance access and Medicaid eligibility will most negatively affect communities of color during this pandemic. People of color are contracting and dying from the coronavirus at higher rates than their white counterparts. Black and Latino Americans are also more likely to be uninsured than white Americans, and the disparities are even greater in states that have not expanded Medicaid. Additionally, more Blacks and Latinos work in the service industries most vulnerable to job loss and/or contracting COVID-19 as frontline essential workers.
Research indicates that a person’s ZIP code is a high predictor of their health outcomes and life expectancy, with even greater implications during a public health crisis. Monitoring QHP and Medicaid enrollment, along with health outcomes by state, will outline the vulnerabilities in varying state healthcare models.
IMPAQ will continue to leverage our experts in both the health and workforce sectors to analyze whether our national safety net will hold under rising unemployment and challenges to health insurance access. We are also prepared to help states, health care providers, employers, and community-based organizations navigate these difficult times ahead.
 The 13 state-based exchanges with Medicaid expansion as of April 2020 include California, Colorado, Connecticut, Washington, D.C., Idaho, Maryland, Massachusetts, Minnesota, Nevada, New York, Rhode Island, Vermont, and Washington. Pennsylvania and New Jersey will fully transition to state-based exchanges in Fall 2020. Idaho did not create a COVID-19 related SEP. Nebraska adopted Medicaid expansion in 2018 but has yet to implement the program. Wisconsin did not implement Medicaid expansion but covers adults up to 100% FPL under Medicaid.
Kevin Van Dyke, Managing Director, IMPAQ Health
Talia Fish, Senior Policy Analyst, IMPAQ Health
Emily Baranski, Policy Analyst, IMPAQ Health
Beth Brinly, Vice President of Workforce Innovation, Maher & Maher