How the COVID-19 Recession Could Affect Health Insurance Coverage

Abstract

Thirty million workers filed initial unemployment claims between March 15 and April 25. As workers lose their jobs, many will also lose their employer-sponsored health insurance (ESI), as will their dependents. Some of these workers and dependents will qualify for Medicaid coverage, particularly in states that expanded Medicaid eligibility under the Affordable Care Act (ACA). Others will purchase individual coverage on the health insurance Marketplaces, possibly with a subsidy to offset the premium cost. And many will be unable to replace their ESI coverage and become uninsured. In this brief, we estimate how health insurance coverage could change as millions of workers lose their jobs during the COVID-19 recession. We present national and state-level estimates of coverage changes if unemployment rates rise from precrisis levels (around 3.5 percent nationally) to 15 percent, 20 percent, or 25 percent. For each unemployment level, we provide a base case scenario of coverage changes and a high scenario, derived from two different estimation methods. In our base scenario, we estimate that at 20 percent unemployment, approximately 25 million people will lose ESI coverage, and of them, 12 million would gain Medicaid coverage, 6 million would gain Marketplace or other private coverage, and 7 million would become uninsured. In the high scenario, we estimate that 43 million people would lose ESI coverage. The increase in Medicaid coverage and uninsurance rates will be uneven across the country, with a greater share of those estimated to lose ESI gaining Medicaid coverage and a lower share becoming uninsured in states that expanded Medicaid under the ACA.