During the coronavirus pandemic, the U.S. unemployment rate reached 14.7%, the highest level since the Great Depression. More than 40 million people filed for unemployment insurance between March and May 2020, and official statistics may understate the true extent of job disruptions. Widespread layoffs amid the pandemic threaten to cut off millions of people from their employer-sponsored health insurance plans. Concurrently, health insurance has increased in importance because of the need for coverage of Covid-19 diagnostic testing and treatment. As restrictions are lifted and the economy begins its slow recovery, some people who had been laid off will be able to reclaim their jobs and health benefits. But the economy is unlikely to recover to prepandemic levels in the near future, meaning that the Covid-associated recession will leave many people without jobs and without their usual source of health insurance.
Before the Affordable Care Act (ACA) was implemented, people who lost their jobs had limited choices for health insurance. Newly disabled people could apply for Medicaid if their savings and assets were low enough for them to qualify for Supplemental Security Income, or they could enroll in Medicare after receiving 2 years of benefits from Social Security Disability Insurance. For adults without a disability, many states’ income cutoffs for Medicaid were well below the poverty line, and only people with dependent children could apply. An individual private-insurance market existed, but without insurer regulations — such as guaranteed issue, community rating, actuarial-value standards, and coverage of essential health benefits — plans were skimpy, excluded people with preexisting conditions, and were often unaffordable. Married people who lost their jobs could potentially switch to their partner’s employer-sponsored insurance (ESI) plan. Finally, the Consolidated Omnibus Budget Reconciliation Act of 1985, known as COBRA, allowed former employees and their dependents to temporarily continue their enrollment in employer-based insurance. Former employees who opt for COBRA coverage must pay 102% of the full premium cost (the employee plus employer shares), however, which has led to very low levels of take-up.
The ACA, having created several new options for health insurance unrelated to employment, will protect many recently unemployed people and their families from losing coverage. In the 36 states that opted to expand their Medicaid programs, expansion removed asset tests and categorical eligibility requirements (for example, policies that required enrollees to be disabled, pregnant, or parents of dependent children) and extended eligibility to all U.S. citizens and qualifying documented immigrants with incomes below 138% of the federal poverty level. Many newly displaced workers will therefore be able to apply for Medicaid. Under another ACA provision, young adults can stay or go back on their parents’ plans as dependents through 26 years of age. And by establishing health insurance marketplaces supported by consumer protections and premium tax credits, the law has allowed people to shop directly for subsidized, comprehensive coverage.
To quantify the ACA’s effect on changes in health insurance coverage after job loss, we used national data from the Medical Expenditure Panel Survey to compare the trajectories of nonelderly adults who lost their jobs before 2014 — the year the law’s Medicaid and marketplace provisions went into full effect — with the trajectories of those who lost their jobs in 2014 or later. The sample included adults 19 to 64 years of age who were employed at the beginning of the 2-year longitudinal survey but had left or lost their jobs by the end of it. We examined the insurance status of these participants during the first 3 months and the last 3 months that they were surveyed.
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Pre- and Post-ACA Health Insurance Coverage among Nonelderly Adults with Job Loss.
Bold type indicates a differences-in-differences estimate that is significant at P
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