12M idled workers lost health insurance: study
Rep. Underwood leads Illinois congressional delegation in calling for insurers to reinvest pandemic profits
U.S. Rep. Lauren Underwood is leading calls from the Illinois congressional delegation for health insurers to reinvest pandemic profits into their clients’ health care, joined by Congressman Jesus “Chuy” Garcia (left). (One Illinois/Ted Cox)
By Ted Cox
The Economic Policy Institute estimates that 12 million idled U.S. workers lost their employer-sponsored health insurance in the first six months of the pandemic.
The news comes as the Illinois congressional delegation claims health insurers are making huge profits in the pandemic, with calls for the insurers to reinvest the windfall in the form of free testing and treatment for COVID-19, as well as premium credits for those insured.
The Economic Policy Institute issued a report on “Health Insurance and the COVID-19 Shock” last week. It immediately granted that it’s a difficult area to establish hard data, as even in the best of times the normal “churn” in the job market, with workers moving from job to job, results in families losing and then regaining their coverage from month to month.
But it added that “extreme churn after February 2020 has led to very large losses in (employer-sponsored insurance) coverage. In March and April, for example, new hiring led to 2.4 million workers gaining ESI coverage each month, but historically large layoffs led to 5.6 million workers losing coverage each month. This rate of lost coverage — over 3 million workers — dwarfs a similar calculation for the number of workers losing coverage each month during the biggest job-losing period of the Great Recession” a decade ago.
The study cited data showing that the U.S. job market lost almost 21 million positions from February to April as the pandemic took hold of the economy, then gained back 9 million jobs from April through July, for a net loss of 12 million jobs. The fields hardest hit were government, the service industry, professional and business services, and, somewhat ironically, the health field.
Given the varying coverage through employer-sponsored health plans throughout the workforce, the study concluded that “since the onset of the COVID-19 shock to the economy, roughly 6.2 million workers have lost access to health insurance that they previously got through their employer, according to the best measure of net employment change.” It found that “consistent with 9 million workers having lost access to ESI in March and April 2020, but 2.9 million workers having gained coverage between April and July 2020.”
Yet all those who lost jobs, even if they didn’t have plans through their workplace, were in danger of failing to make the necessary payments for premiums to retain coverage. While some paid for costly Cobra coverage, others may have found ways into the Medicaid program.
Regardless, the study warned that the health field was prone to calamities as long as workers’ health insurance is so closely tied to their jobs. “Though we don’t yet know precisely how damaging the COVID-19 shock has been to health-insurance access, the shock has laid bare the huge uncertainty that employer-linked health insurance introduces into U.S. families’ lives,” the study stated. “Even in normal times millions of U.S. households must manage coverage transitions in a given month. During economic crises, these coverage changes increasingly include transitioning into uninsured status, which puts families’ health and financial security at risk.” It called for a move to a “single-payer” system independent of employment.
The health-insurance industry got no relief this week from the Illinois congressional delegation.
U.S. Sen. Dick Durbin and Reps. Jan Schakowsky of Evanston and Lauren Underwood of Downers Grove led other House Democrats in submitting a letter Monday to the major health-insurance companies in Illinois, including Humana and Cigna. It charged that health insurers are “experiencing an embarrassment of profits,” as they continue to pocket premiums, even as many medical procedures have been curtailed — reflected in those industry job losses already mentioned. It cited stock earnings rising well above their levels of a year ago throughout the industry even in the midst of the pandemic.
“At the same time that insurers are enjoying massive profits, your enrollees are experiencing serious financial pain,” the letter added — not only physical pain in the pandemic, but economic pain from the fallout, such as lost jobs. Throwing the health executives’ own words pledging support right back at them, the letter called for them to issue premiums credits to their clients across the state — much the same way auto insurers are offering rebates in their coverage with a decline in movement leading directly to a decline in accidents.
The letter then urged the insurance companies to “fully comply with COVID-19 testing provisions in the Families First Coronavirus Response Act, which requires individual and group market health plans to provide coverage of COVID-19 tests and related items and services without imposing any cost-sharing requirements, including deductibles, copayments, and coinsurance. The legislation also prohibits prior authorization or other medical management requirements for COVID-19 testing.”
It called those requirements critical to managing and minimizing the pandemic.
The letter was also signed by U.S. Reps. Cheri Bustos of Moline, Robin Kelly of Matteson, and Danny Davis and Jesus “Chuy” Garcia of Chicago.