This is Just the Beginning
“I got to go find work, I got to get my health coverage. Because I got a lot of people depends on me. I got a wife, I got grandkids. I got kids. I got a lot of people and I can’t fail them. I can’t fail them.”
– Rodney Watts, Georgia resident
It’s been some time since we’ve written a healthcare post, so today’s the day.
The Economic Policy Institute (EPI) estimates that 6 million people have lost healthcare insurance since the pandemic began – and since most workers have spouses and children, the total estimate of those who’ve lost insurance is 12 million.
Newly-unemployed workers may not be ineligible (“too rich”) for Medicaid, which uses the federal poverty level as its baseline, although even the cheapest Affordable Care Act (ACA) Bronze plans are out of reach financially for many newly-unemployed. This leaves millions of people caught in the middle – too much income for Medicaid, too little for a private plan. [Note: we’ll have to wait some months before that figure – of those who end up uninsured entirely – becomes clear. There are already around 30 million uninsured in the U.S., and another 60 million under-insured.]
The HEROES Act, passed by the House in May, included full funding to allow the newly-unemployed to retain employer-sponsored healthcare (employer + employee contributions), but the HEALS Act voted on by the Senate last week contained nothing. In any case, it failed, so this is now a moot point.
But there are also millions of people whose income has fallen off the cliff and are newly eligible for Medicaid – a public-sponsored healthcare program partly funded by the federal government and partly by individual states. To date, 38 states have voted to “expand” Medicaid, making the program available to those with more resources than previously.
In Nevada, hit especially hard by the pandemic given its reliance on the entertainment and hospitality industry (the state unemployment rate in April was 30.1%, the highest monthly rate ever recorded for a single state), Medicaid enrollment went from 644,000 (February) to 731,000 (through August) in a state with a total population just over 3 million:
“That 13.5 percent increase places Nevada among at least three states, along with Kentucky and Minnesota, where the cadre of people on Medicaid has spiked that much, including families … who have never before asked for government help. But increases are widespread: Caseloads had risen on average 8.4 percent through July in 30 states for which researchers have enrollment information. And in 14 states with enrollment data through August, the average is 10 percent.” [Emphasis added]
While about one-third of Nevada’s laid-off workers are back on the job now, many are working too few hours to qualify for benefits, including healthcare. (The state’s unemployment rate in July was 14%, still higher than the highest unemployment rate registered during the Great Recession.)
Here’s the rub:
“The spiraling demand for Medicaid is colliding with a diminished ability by the state to pay for it. With Nevada confronting a $1.2 billion deficit and a requirement to balance its budget, the legislature has taken steps to slow the program’s spending — notably, curbing payments to doctors, hospitals and others who care for Medicaid patients to save $53 million through next summer. That 6 percent rate cut is the largest so far in the nation.” [Emphasis added]
The state of Nevada is cutting $233 million from Medicaid spending (which accounts for about one-third of the state budget). Gone are: adult prosthetics; optometry services; most dental care apart from children and pregnant women; physical therapy (limited to 12 sessions). And providers received a 6% pay cut.
This in turn puts added pressure on providers (physicians, hospitals, specialist care providers), who are now facing the prospect of providing care that costs more than reimbursements provide.
And this is just the beginning:
“Nonprofit Kaiser Family Foundation estimates that about 27 million in total are at risk of losing coverage during the coronavirus pandemic, and could be left struggling with COVID-19 or other illnesses along with a lack of income that can make paying medical bills nearly impossible.”
So: an estimate by the EPI that to date, 12 million have lost their employer-sponsored coverage, and KFF estimating that by the end (and when is that, pray tell?), 27 million will have lost coverage.
KFF projects that four out of five newly-unemployed and uninsured persons will be eligible for either Medicaid or the ACA. We have some doubts about the “affordability” of the latter, especially in light of the fact that if the pandemic continues for another six months, unemployment will continue to rise – there are entire sectors in the economy which will fail almost entirely; even when they start up again, it will be on a much more limited scale; think “aviation” and “entertainment” and “tourism” for starters.
Medical Economics published an estimate (July 16, 2020) that as many as 48 million non-elderly people will be part of a household where someone lost their employer-sponsored health insurance by December.
Based on work done by the Robert Wood Johnson Foundation, “…projections show that an estimated 3.3 million of those will regain their employer-sponsored insurance by being added to another family member’s policy. Another 2.8 million people will expected to enroll in Medicaid and 600,000 are expected to enroll in the individual market, mainly through the Affordable Care Act’s marketplace.
“But still, 3.5 million are expected to remain uninsured.”
As of July, there were 8 states where unemployment was above 20%:
· Texas (29 percent)
· Florida (25 percent)
· Oklahoma (24 percent)
· Georgia (23 percent)
· Mississippi (22 percent)
· Nevada (21 percent)
· North Carolina (20 percent)
· South Carolina (20 percent)
It hardly needs repeating that the U.S. will get sicker, take longer to recover, and endure more severe long-term consequences from Covid-19 on the health of its people and economy than countries where healthcare is universal and free at point of delivery.