Children’s Coverage Vulnerabilities With Loss of a Parent’s Employer-Sponsored Insurance

Abstract

In addition to the devastating health effects of the coronavirus disease (COVID-19) pandemic, the United States is experiencing the highest rates of unemployment since the Great Depression.1 One important and overlooked consequence of unemployment is the loss of employer-sponsored insurance (ESI) coverage for children whose parents lose their jobs. It is estimated 27 million US adults will become uninsured because of unemployment and lose ESI during the pandemic.2 During the pandemic, >4 out of 10 parents with children <19 years old reported they or a family member lost a job, work hours, or work-related income, which is slightly more than for childless adults.3 Two out of 5 adults in newly unemployed households reported having obtained their health insurance coverage from that employer. More than half of US children are covered by ESI,4 including 49% of children with preexisting conditions who have special health care needs.5For lower-income and minority families, this loss of ESI during the COVID-19 pandemic will likely intensify already existing health disparities for children. Unemployment during the pandemic has differentially affected low-income and minority populations in the US. Children of low-wage workers are at risk for resulting coverage loss, including the 25% of children from families with incomes <138% of the federal poverty level (FPL) who are covered by ESI.4 This has been even higher for low-income (5 of 10), Black (5 of 10), and Hispanic (6 of 10) parents.3 Thus, vulnerable families, including those with children with preexisting conditions and special health care needs, are at risk for losing ESI and becoming uninsured if they do not have coverage by other means.The loss of ESI due to pandemic-related unemployment for families has the potential to cause substantial short- and long-term health effects on children. The adverse effects of uninsurance on children have been well documented and include high rates of unmet medical needs, delayed care, unfilled prescriptions, and lack of a usual place of care. Insurance disruptions and being uninsured for part of the year are associated with the same adverse effects.6 Being uninsured or having disruptions in insurance can create barriers to accessing care for children, with the potential to miss recommended preventive services, including scheduled vaccinations and developmental assessments during the well child visit, as well as maintenance care of chronic diseases. These consequences may cause lasting effects on children’s development and growth, particularly for children whose significant health care needs require careful and consistent management.Regaining coverage after the loss of ESI is essential, but the options may play out differently when children are involved. This may lead to increased costs to maintain commercial coverage as a family or mixed coverage types within a family. Families can continue their ESI through COBRA (Consolidated Omnibus Budget Reconciliation Act). However, this comes at an even higher cost for families with multiple members paying the entire premium out of pocket. For a family of 4, this averages $20 576, plus an additional 2%.2 Eligibility for subsidies for the Affordable Care Act (ACA) Marketplace plans can be limited. Families who do not qualify can face plans with steep premiums, high-deductibles, and potential for substantial out-of-pocket costs for health care. Children who are income-eligible can enroll in Medicaid or the Children’s Health Insurance Plan. Medicaid coverage for children has the advantage of requiring little to no cost-sharing for health care services, although they may have more restricted provider networks than commercial coverage, which may cause disruptions to existing provider relationships. Medicaid may not be available to parents, however, especially if families live in one of the states that did not expand Medicaid as part of the ACA.2 Families may end up with mixed types of coverage within the same family or may have insured and uninsured members in the same family, which is associated with reduced rates of coverage and access to preventive care for eligible children.7 Even if children can have public coverage, the increased financial burden on the family from uninsured or underinsured parents may create cost-related barriers for their children to obtain needed health care.Expanding Medicaid to adults has been shown to have effects on increasing coverage for eligible but unenrolled children. What has not been established is if the converse is true: does a “closed door” preventing parents from obtaining Medicaid coverage make eligible children less likely to be covered? This is a question that is particularly relevant with the current challenges to the viability of the ACA, including the Supreme Court case of California v Texas.8 If the ACA is deemed unconstitutional by the Supreme Court and is overturned, ∼3 million children who obtained Medicaid or CHIP when their parents signed up for insurance could lose their coverage.9 Additionally, the elimination of the ACA Marketplaces and subsidies would remove other important coverage options for families with children who lose ESI in the pandemic. The loss of the ACA’s protections for preexisting conditions could make it challenging to find replacement coverage for children with preexisting conditions, including those children with special health care needs. Given these threats to the ACA, policymakers must make a concerted effort to examine, better understand, and address the direct and indirect impacts of coverage policy on children. For example, more data specific to children are needed to better understand the impact of COVID-related unemployment on coverage loss.The loss of ESI coverage due to a parent’s job loss during COVID-19 has the potential to exacerbate other threats to the health and well-being of children in addition to the pandemic itself. It will likely magnify disparities in health insurance coverage and access for lower-income and minority children because these families are differentially affected by COVID-19 related job loss. In families with incomes <250% FPL, 53% reported a family member lost a job, work hours, or income compared with 33% of families ≥250% FPL.3 As a result, families may face unmanageable health care costs during and after the outbreak, in a time when they have lost income either from being furloughed or becoming unemployed.To support families with these challenges, pediatric clinicians and health advocates should understand the current resources available in their state to maintain coverage for children and youth if families lose ESI. They should communicate about the significant and grave impacts of unemployment and subsequent loss of ESI to their state and federal legislators and advocate for better coverage for children. With this information, policymakers may consider how to expand resources for and devise policy alternatives to ameliorate the financial and health-related challenges unemployed Americans may face. This could include policies such as COBRA extensions, additional Medicaid expansions, emergency Special Enrollment Periods for the ACA Marketplaces, expanded ACA Marketplace subsidies, funding for enrollment assistance, and continued assistance through federal legislation such as the CARES Act and Families First Coronavirus Response Act.As the United States is analyzing the vulnerabilities of the health care system and potential solutions during this pandemic, we must remember to consider the short- and long-term consequences loss of coverage has on children. This includes exacerbating health and health care disparities for lower-income and minority children. The present and future health of children must not be an afterthought as we attempt to address COVID-19–related unemployment and coverage loss for their parents.