Why Unemployment Matters To Health Care Organizations

Since the start of the pandemic, 53 million Americans have filed for unemployment (see New Unemployment Claims Rise For The First Time Since April), close to 16% of the adult population. For many of these people, the loss of their job also means a loss of health insurance.

Exactly how many Americans will lose their health insurance is not clear. Before the COVID-19 pandemic, 27.9 million non-elderly Americans—8.5% of the adult population—were uninsured (see Key Facts About The Uninsured Population). A third of the workers experiencing job loss have insurance through another family member’s job and a quarter have coverage through a Medicaid program prior to the pandemic. Of the estimated 10 million people who will lose employer-sponsored health insurance between April and December 2020 (see COVID-19 Recession: Preliminary Estimates Using Microsimulation and Eligibility for ACA Health Coverage Following Job Loss), a third will regain employer-sponsored insurance by being added to a family member’s policy, nearly half will be eligible for Medicaid, and 10% will be eligible for marketplace subsidies. The balance will likely be uninsured and faced with either buying individual health insurance policies or remaining uninsured and paying cash for services.

This means an increase in enrollment in Medicaid health plans and commercial health plans. There will also be a likely bump in Medicare beneficiaries, with a group of consumers who will apply for coverage based on disability. And there will be an increase in uninsured, cash-paying consumers. Executive teams of provider organizations should be planning for all of the above.

Regarding Medicaid, it is likely that plans will shift a bit in the months ahead. States with stressed budgets will be looking to trim Medicaid. One way is to enroll more consumers in managed care plans and link more payments (to both health plans and provider organizations) to performance. There is financial assistance to state Medicaid plans through the Families First Coronavirus Response Act (FFCRA), with a temporary increase of Federal Medical Assistance Percentage (FMAP) by 6.2 percentage points, which will last through the end of the federal emergency period (see Families First Coronavirus Response Act – Increased FMAP FAQs and COVID-19 Frequently Asked Questions (FAQs) For State Medicaid And Children’s Health Insurance Program (CHIP) Agencies). In accepting these funds, states cannot decrease enrollment/eligibility, but can change some benefits and provider organization payments.

Now is the time to assess these likely changes in coverage and their potential impact on organizational competitiveness and sustainability in the “new normal.” It takes planning, time, and money to build a direct-to-consumer practice. And on the health plan front, it takes 18 months to go from health plan outreach to new health plan revenue. Now is the time to get started.

For more on developing preferred health plan relationships and increasing health plan referrals, check out these resources in The OPEN MINDS Industry Library:

For a list of the major health plans in each state, go to OPEN MINDS State Profiles—each profile has in-depth information on the overall health plan coverage landscape, the Medicaid system, the behavioral health system, and coverage of dual eligibles. And for health plans, go to our on-demand datasets (go to OPEN MINDS On-Demand Datasets and search for “health plan” with the name of your state).

And, for a deep dive with our team, join OPEN MINDS Senior Associate Paul Duck on September 10 at 1:00 pm EDT for the web briefing, Marketing Planning For Sustainability In A Post-Disruption Marketplace.

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