Sometimes it’s news when a bad thing doesn’t happen. The story of health insurance coverage during the pandemic appears to be one of those times.
Back in early 2020, when COVID-19 first began to force businesses to shut down, unemployment soared and the number of uninsured Americans seemed certain to soar, too. But a pair of new reports, one of them out early Tuesday morning, suggest that the uninsured rate remained basically the same in the coronavirus pandemic’s first year.
The results of these reports are not ironclad. Both are based on surveys, which are imprecise in the best of circumstances and even less reliable now because social-distancing practices have made collecting information more difficult.
But a sizable surge in the number of uninsured Americans would likely have registered with at least one of the surveys, if not both. And it’s not hard to imagine what might have prevented that surge from happening: Federal initiatives, including pandemic relief legislation and the Affordable Care Act, made it possible for people to stay covered.
In other words, some government programs did precisely what they were supposed to do.
The Uninsured Explosion That Wasn’t
Tuesday’s report came from the federal government and contained preliminary results from an ongoing, continuous National Health Insurance Survey.
In 2020, the report said, just 13.9% of working-age Americans had no insurance. The year before, 14.7% had no coverage.
Yes, the government survey actually detected a slight decline in the uninsured rate. But given the margin for error, it’s hard to be sure about that, which is why the authors of the report wrote that the 2020 rate “is lower than, but not statistically different from” the 2019 rate.
That was also the takeaway from last week’s report, which came from the Urban Institute, a policy think tank in Washington, with funding from the Robert Wood Johnson Foundation. That report drew on a separate survey that the Urban Institute has run continuously since 2013. It found that the number of working-age Americans without insurance held steady through 2020 ― and stayed that way into early 2021 as well. (The Urban Institute survey has more recent information than does the NHIS.)
This is not the outcome that many experts expected and feared when COVID-19 hit, causing widespread shutdowns of businesses in an effort to quell the spread of the virus. With so many people losing their jobs, it seemed inevitable that many would lose their insurance and end up without coverage, just like in past downturns.
But it looks like that didn’t happen.
One likely reason is the Affordable Care Act, aka Obamacare, which makes private health insurance available to anybody who doesn’t have coverage through an employer ― and offers subsidies to people based on their incomes.
The Affordable Care Act also provides states with extra money to expand their Medicaid programs so that anybody with an income below or just above the poverty line qualifies. As of today, all but a dozen states have done that.
The holdouts are mostly in the South and include Florida, Georgia and Texas. Tellingly, the uninsured rate in these states is twice as high as it is in the Medicaid expansion states, according to both the NHIS and Urban Institute surveys.
“This pandemic-fueled economic crisis has been unprecedented in so many ways, but one important way is that the Affordable Care Act created a health insurance safety net that never before existed in a recession,” Larry Levitt, senior vice president at the Henry J. Kaiser Family Foundation, told HuffPost following the release of last week’s Urban Institute report.
“Along with the ACA, Medicaid has been a lifeline that has prevented many people from ending up uninsured, particularly so in states that expanded eligibility under the ACA,” Levitt added.
Thanks, COVID Relief
But the Affordable Care Act alone probably can’t explain why the uninsured rate stayed steady. The COVID-19 relief measures from early 2020 almost certainly played a huge role as well ― both by subsidizing businesses so they could keep workers on the payroll andby giving the unemployed extra money so that they could keep their old employer health policies through what’s known as COBRA.
(COBRA is the shorthand for the insurance provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, which made it possible for people who lose their jobs to keep their benefits for up to 36 months if they can keep paying the premiums on their own.)
One other, less widely understood way that COVID-19 relief legislation helped avoid insurance losses was by prohibiting states from requiring people to re-verify their eligibility for Medicaid. Usually such requirements lead to people dropping out of the program, sometimes because they are no longer eligible and sometimes because they don’t file the proper paperwork. That produces a steady “churn” in Medicaid enrollment.
COVID-19 relief packages have provided states with extra money for Medicaid, but they have made that funding conditional on allowing people to stay on the program without showing proof of eligibility ― partly because simply keeping people covered, regardless of specific financial circumstances, has been the overriding priority during the pandemic.
One other factor in the stable uninsured rate may have had nothing to do with government programs at all. Pandemic job losses disproportionately affected low-wage industries, where many workers never had employer-provided health benefits, which meant they had no job-based insurance to lose.
Thanks, Bidencare ― Maybe
The sustained level of health coverage does not mean all Americans could get care when they needed it. Many millions remain uninsured, while many millions more cannot pay their bills because their policies come with high out-of-pocket costs.
In this respect, the U.S. remains an international outlier. No other economically advanced country has significant fractions of the population with no health insurance.
President Joe Biden and the Democrats have been trying to get the U.S. closer to truly universal coverage, in part by building on the Affordable Care Act. The American Rescue Plan that Congress passed and Biden signed in March boosted the private financial assistance available through the Affordable Care Act so that more people are now eligible for subsidies and those already getting subsidies can get even more help than before.
The net effect has been to make coverage significantly more affordable, and enrollment numbers from this year suggest even more people are signing up for coverage. It’s possible the uninsured rate is already at a new low, even if data sources like the NHIS and Urban Institute’s survey haven’t picked up that change yet.
That boost in Affordable Care Act subsidies is temporary. The human infrastructure legislation Biden and Democrats want to pass this fall would make the boost permanent. It would also bring down the price of prescription drugs and provide insurance to low-income people living in the states that have not expanded Medicaid.
The same legislation would do a bunch of other things, too, like helping young people pay for college, subsidizing paid leave for new parents, and financing home care for the elderly and people with disabilities.
Every one of these initiatives would entail their own tradeoffs, and most would entail new spending, which in turn would require either finding new revenue, cutting other spending or tolerating higher deficits. But the payoff could be a material improvement in the lives of everyday Americans, like improving their access to health care.