What does the coronavirus pandemic mean for your health insurance? An economist responds.

For the latest in Batten’s new Expert Chat Series, Batten professor Sebastian Tello-Trillo discussed how the coronavirus pandemic will impact health insurance coverage.

With the spread of both the coronavirus and corresponding social distancing measures, millions of Americans are losing their jobs. The unemployment rate in the United States could eventually rise as high as 30%, Batten professor Sebastian Tello-Trillo told an online audience last week. Tello-Trillo, an economist who specializes in health policy in the United States and Latin America, led the seventh conversation in Batten’s Expert Chat Series on COVID-19, speaking and answering questions about the pandemic’s impact on health insurance. 

For many people, a job loss also means a loss of insurance coverage; in the US, around 160 million people are insured through their employers. Across the country, we can expect to see a 25-43% increase in the uninsured rate, Tello-Trillo said—and that increase is concerning. “One thing that we know from the literature is that losing health insurance can negatively impact a household’s finances and health,” he said. “Health insurance—like Medicaid, for example—does a really good job of mitigating financial shocks.” 

Uninsured people might get a large medical bill—an event that’s more likely now, due to COVID-19—and find they’re unable to pay it. Especially for people who lack substantial savings or support networks, this could precipitate a downward spiral where people stop paying their mortgage and car loans and accrue large amounts of debt on their credit cards. “Financially, it’s just a disaster for some people,” Tello-Trillo said.

We might assume that the sheer number of alternatives to employer-supported health insurance will help most people avoid this. To illustrate the many options available, Tello-Trillo shared an image of a complex flowchart. You can join your spouse’s health insurance plan, if you’re married. You can join your parents’ plan, if you’re under 26. You can enroll in marketplace health insurance or get a COBRA plan, which allows you to continue your employer’s plan but pay the premiums yourself. You can get coverage through Medicaid, if you’re eligible either through the traditional program or through an Affordable Care Act expansion. And if all else fails, you can use free clinics, although the services they offer are limited.

“So it seems like there are a lot of options. What’s the big worry?” Tello-Trillo asked. His answer: “The big worry is that these options may or may not be available; they depend on a number of factors, including where you live.”

Your likelihood of obtaining insurance in a given state or county is dependent on factors like the area’s economic conditions, whether or not your state has expanded Medicaid, and how easy it is to procure marketplace insurance, Tello-Trillo explained. According to projections, Medicaid expansion in particular will have a significant impact on the number of people who go uninsured in a particular state. In non-expansion states, 40% of people who lose employer-supported health insurance will likely remain uninsured. In states that have expanded their Medicaid programs, on the other hand, the number of uninsured people will probably be far lower—only 23%.

Medicaid is capable of doing a great “buffer job” when it comes to catastrophic events, Tello-Trillo. “That’s something we’ve learned from previous pandemics and recessions.” He showed abstracts from several papers to this effect, including one that found a reduced infant mortality rate in states offering better health insurance access during the H3N2 virus pandemic in 1968. But with the loss of revenue from working taxpayers, Medicaid is experiencing a lot of strain, Tello-Trillo said. In response to a question about the program’s funding, he explained that the federal government has increased its contributions, although not as generously as it has in previous recessions, when federal contribution rates were tied to increases in the unemployment rate.

Still, there’s a strong movement to expand Medicaid in states that haven’t done so yet—and to make buying health insurance on the marketplace possible for more people, Tello-Trillo said. He thinks the pandemic will push us toward serious healthcare reforms, “whether that’s ‘Medicare For All’ or whether it’s just making health insurance easier to get,” he said—“because it should be easier.”

Citing health economist Victor Fuchs, who has pointed out that we re-evaluate our healthcare system whenever there’s “a shock to society,” Tello-Trillo said he believes the current pandemic offers us an opportunity to think differently about healthcare. “I showed you that flowchart that was really complicated,” he said to his audience. “If I showed you a flowchart from another country, it would just say, ‘You keeping going to the doctor and nothing changes.’”

Related Content

Sebastian Tello-Trillo