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Among Those Losing Jobs, Red States Will See More Uninsured

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A big increase in uninsured Americans is expected to hit harder in states that didn’t expand Medicaid under the Affordable Care Act amid record unemployment applications in an economy struggling with the Coronavirus strain COVID-19.

When unemployment is on the rise, Americans losing health insurance benefits almost always follows if their employer doesn’t extend coverage though most should be eligible for some coverage under the ACA, including subsidized individual coverage known as Obamacare. Nearly 10 million Americans have applied for unemployment benefits in the last two weeks.

But Medicaid coverage for poor Americans may be off the table in 14 states, generally led by Republican governors or GOP legislatures, that haven’t expanded Medicaid under the ACA. And that’s going to harm access to medical care for potentially millions of Americans, new research shows.

“Findings indicate that though joblessness will likely affect uninsurance rates throughout the country, states that did not expand Medicaid under the ACA will see larger increases in uninsurance if current policy fails to adapt to the COVID-19 virus,” the Urban Institute said last week in a report funded by the Robert Wood Johnson Foundation. “Medicaid coverage will sharply increase as workers become unemployed due to the pandemic, particularly in Medicaid expansion states.”

Prior to full implementation of the ACA, which was signed into law 10 years ago by President Barack Obama and expanded coverage to millions of Americans by 2014, Urban Institute researchers said 46% of unemployed Americans didn’t have health insurance in 2011-2013.

“After ACA implementation and an improved economy, 29.8% of unemployed individuals did not have health insurance—a more than 35% decrease,” the Urban Institute report said. “Reductions in uninsured rates were greater in Medicaid expansion states relative to nonexpansion states, where newly unemployed adults without dependent children are ineligible for Medicaid, currently.”

A rising uninsured rate should boost efforts to expand Medicaid via ballot initiative in at least two states this November.

“To put it simply, states that failed to expand Medicaid have abandoned the needs of millions of people,” says Jonathan Schleifer, executive director of The Fairness Project, which is working with states to expand Medicaid under the ACA. “That was true before COVID-19, and it is certainly true in the midst of this crisis. The gap in health care access between expansion and non-expansion states is about to increase from a gap to something closer to the size of the Grand Canyon.” 

The Fairness Project has been working with supporters of Medicaid expansion in Oklahoma and Missouri in hopes those states will follow the lead of successful 2018 ballot initiatives in Nebraska, Idaho and Utah. Those states, like Maine in 2017, bypassed Republican governors and legislatures to expand Medicaid by public referendum.

“As people lose their jobs in this pandemic, they’re going to need access to healthcare,” Schleifer said. “Politicians in deep red states who have stood in the way of progress, need to stop listening to the special interests and start responding to the needs of their constituents.”

Oklahoma and Missouri are among the 14 remaining holdout states that have already missed out on generous federal funding of the Medicaid expansion. From 2014 through 2016, the ACA’s Medicaid expansion population was funded 100% with federal dollars. The federal government still picks up 90% or more of Medicaid expansion through 2020. It’s a better deal than before the ACA, when Medicaid programs were funded via a much less generous split between state and federal tax dollars.

Such expansion has been a boon to doctors, hospitals and health insurers like Anthem, Centene, UnitedHealth Group and CVS Health’s Aetna health insurance unit given these private insurers generally administer most Medicaid benefits in the U.S. Expansion could bring coverage and new revenue to healthcare companies as soon as 2021, analysts say.

Meanwhile, the Robert Wood Johnson Foundation says there are other policies that could be pursued beyond Medicaid expansion that would support the newly unemployed without health insurance. Those policies include: relaxing eligibility requirements for subsidies for individual coverage available on the ACA’s exchanges and providing subsidies for COBRA benefits.

“The ACA created an important safety net, so that losing your job doesn’t mean you have to lose your coverage,” said Kathy Hempstead, senior policy adviser at the Robert Wood Johnson Foundation. “In these very challenging times we need to pull out all the stops and use every policy tool at our disposal to keep people connected to coverage even as millions will likely lose their jobs and become uninsured.”

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