Tens of millions face the loss of job-based health insurance
Jeremy Fritz stopped working as an assistant manager for a fitness center in Carlsbad, California, during the pandemic lockdown in the spring when gyms were first closed.
By the end of April, the company operating the fitness center, Active Wellness, eliminated his health insurance. And in July, he was laid off when it became clear the center where he worked would be closed through 2020. Most of the small company’s gyms are still shuttered.
Losing coverage in the middle of the coronavirus crisis, as millions of others have, was like “going into this thunderstorm without an umbrella,” Fritz recalled. Active Wellness put him in touch with an insurance broker, which helped him and his husband sign up for a plan under the Affordable Care Act.
For people like Fritz, as well as those who qualify for Medicaid under the law, “there is still a safety net that wasn’t there 10 years ago,” said Sara Collins, a vice president at the Commonwealth Fund.
But that net is fraying, with thousands of small businesses that had always expressed difficulty in providing employee health insurance under “Obamacare” now in far worse trouble because of the pandemic.
Hopes have also dimmed for another federal aid package before the presidential election.
Not only are businesses shedding workers, with the nation’s unemployed numbering roughly 13.6 million, but employers are also cutting expenses like health coverage, and projections of rising numbers of uninsured have grown bleak.
Tens of millions of people could lose their jobbased insurance by the end of the year, said Stan Dorn, director of the National Center for Coverage Innovation at Families USA, the Washington, D.C., consumer group.
“The odds are we are on track to have the largest coverage losses in our history,” he said.
While estimates vary, a recent Urban Institute analysis of census data says at least 3 million Americans have already lost jobbased coverage, and a separate analysis from Avalere Health predicts some 12 million will lose it by the end of this year.
Both studies highlight the disproportionate effect on Black and Hispanic workers.
“There is this expectation that we are going to see big losses in employerbased coverage,” Collins said.
Many businesses have tried to keep their workers insured during the pandemic. Employers relied on government aid, including the Paycheck Protection Program authorized by Congress to ease the economic fallout, to pay for premiums through the spring and summer.
Government funding appears to have “prevented the economic crisis from becoming a coverage crisis right away,” said Leemore Dafny, a professor at Harvard Business School and one of the authors of a report last month looking at the pandemic’s effect on small business.
Describing those employers as “the proverbial canary in the coal mine,” the researchers say there could be significant coverage losses if insurers and lawmakers fail to act in the coming months.
“We will probably really start to see it during renewal time, November and December,” said Mark Hall, the director of health law and policy at Wake Forest University. “That will be when the money really dries up.”