Public programs helped offset the effects of losing employer-based health insurance during the pandemic

A new report has found that in the early months of the COVID-19 pandemic, 2.7 million Americans lost their employer-sponsored health insurance coverage. However, when compared to other recessions, some of the effects of that loss of coverage was offset by increased public program options.

The report, published in the JAMA Health Forum, looked at Census Bureau statistics and found that the overall insurance coverage rate in the U.S. dropped 0.11 percentage points per week in the early months of the pandemic.

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The report tracked losses of employer-sponsored insurance (ESI) and found that while many American became uninsured during the pandemic, some were able to obtain coverage in other ways, including through government programs.

A downturn unlike any other

The report noted that with economic downturns, unemployment generally increases, bringing higher levels of uninsured Americans, since so many get their insurance through their jobs. The researchers said the 2020 economic downturn was unique in its quick onset and the way recovery was hampered by ongoing concerns about COVID-19.

“This recession differed in important ways from earlier economic downturns, including the swiftness of the initial economic decline and the sensitivity of the recovery to both policy and the epidemiology of COVID-19,” the report said.

The trends also varied by demographics, the researchers found. “Early in the pandemic, rising uninsurance was concentrated among men, people aged 27 to 50 years, people of Hispanic ethnicity, and people in families with relatively low prepandemic income,” the report said. “For these groups, the decline in ESI was larger than the increase in other sources [of insurance].”

Public programs, other sources helped keep uninsurance rates lower

The uninsurance rates could’ve been higher, if workers had not had other options, such as switching to public programs or switching to coverage from a spouse’s employer, the report found.

One interesting data point was that uninsurance rates were higher in states that had not expanded Medicaid under the Affordable Care Act (ACA). In both expansion and non-expansion states, public programs such as Medicaid helped fill the gap of insurance coverage—but the gap was wider in non-expansion states, at least early in the pandemic.

“The results indicate that much of the overall decline in coverage took place within a short 3-month period early in the pandemic. While employer-sponsored coverage declined throughout 2020, the decline was more fully offset by increases in other sources later in the year,” the report said. “A large increase in Medicaid enrollment was consistent with documentation of rising Medicaid enrollment during the pandemic, as well as prepandemic evidence that the ACA’s new coverage options have alleviated the negative effect of unemployment on insurance coverage.”

The report concluded by noting that loss of insurance due to job loss was less dramatic with the COVID pandemic than with the Great Recession (2007-2010). Due in part to the ACA, workers during the pandemic had more options to turn to when ESI coverage was unavailable to them.

“Looking ahead, unemployment rates are currently much lower than the pandemic’s peak (5.8% in May 2021 vs 14.7% in April 2020) but still above the prepandemic levels, and employment recovery has been lagging among racial and ethnic minority subpopulations,” the report said. “These trends point to the continued importance of safety-net programs both in providing coverage for unemployed workers and in addressing insurance disparities.”