State, Federal Actions Protected Health Coverage for Millions During Pandemic

Deborah Kagan, a New Yorker with type 1 diabetes, lost her job during the pandemic. When a move took her to Florida, she wasn’t eligible to maintain her Medicaid coverage there.

“Without my medication, I’m dead,” she told NPR reporter Selena Simmons-Duffin. A pandemic policy change — one of many made by federal and state governments — averted disaster for Kagan. Because she was on unemployment benefits, she found a lifeline thanks to the expansion of the Affordable Care Act (ACA) that was part of this year’s COVID relief legislation. She enrolled in an ACA silver plan that will cover most of her health costs for the rest of 2021.

That scenario was repeated often last year, as jobs lost to COVID-19-related shutdowns might have had disastrous consequences for Americans’ health insurance. Nearly half of the US is insured through employer-sponsored health plans, and the unemployment rate in April 2020 ballooned to an unprecedented high of nearly 15%. In past economic downturns, large-scale job loss meant insurance loss for many. But in this recession, that didn’t happen.

Instead, the percentage of Americans with health insurance remained stable during 2020. “It’s remarkable that, during a pandemic with massive job losses, the share of Americans uninsured did not go up. This is likely a testament to what is now a much more protective health insurance safety net,” Larry Levitt, executive vice president for health policy at KFF, told Kaiser Health News reporters Victoria Knight and Julie Appleby.

This time, the enhanced ACA, heavy investment by the federal government, and an array of COVID-related federal and state policies helped Americans hold on to their coverage.

Different from Other Recessions

During two recessions in the early 2000s, the number of Americans with insurance fell. But both of those downturns predated the ACA’s health insurance coverage expansions, which took effect in 2014.

The ACA made coverage more available and affordable through insurance marketplaces and subsidies to help pay for their policies. The law also allowed states to substantially expand Medicaid, the government health insurance program for Americans with low incomes. All but about a dozen states have opted to use the ACA to expand eligibility for their Medicaid programs.

A recent report from the Commonwealth Fund found that an important factor in keeping people insured was new federal restrictions, tied to additional temporary Medicaid funding, that kept states from disenrolling people from the program during the federal public health emergency of the pandemic. Usually, people leave the program either because they lost eligibility or failed to reenroll.

Most states also held special enrollment periods for their ACA health insurance marketplaces to sign up any eligible person needing coverage.

“The COVID-19 relief measures from early 2020 almost certainly played a huge role as well,” Jonathan Cohn wrote in HuffPost, “both by subsidizing businesses so they could keep workers on the payroll and by giving the unemployed extra money so that they could keep their old employer health policies [through COBRA].”

In 2021, the Biden administration took additional steps to increase access to health insurance. Nearly three million Americans signed up for insurance during a special open enrollment period for Healthcare.gov, the federal ACA marketplace.

Enrollments in the ACA marketplaces were likely bolstered by the substantial, but temporary, increase in ACA marketplace premium subsidies included in the American Rescue Plan passed in March.

Also part of the American Rescue Plan, beginning in April 2021, people who experienced pandemic-related coverage loss because they lost their job or had hours reduced were also eligible for 100% premium subsidies for COBRA coverage.

Record Number of Californians with Coverage

In 2020, more Californians had health insurance than ever before, according to recent data from the California Department of Managed Health Care and the California Department of Insurance.

In an analysis of the data, commissioned by CHCF, Katherine Wilson noted that total health insurance enrollment in the pandemic year 2020 increased by more than one million despite significant job losses.

The California Health Interview Survey (CHIS) found that 94% of Californians were insured in 2020, a record high for the state since CHIS researchers began asking state residents about health care coverage in 2001.

While the gain of more than one million insured Californians in 2020 was driven mostly by growth in Medi-Cal enrollment, it also included increases in individual coverage and Medicare, Wilson found. Medi-Cal enrollment was higher because California paused disenrollments for the duration of the public health emergency, consistent with federal requirements.

The number of insured people also remained high because, despite the economic upheaval of the pandemic, “enrollment declines among employer-sponsored insurance were smaller than job losses might have predicted,” Wilson reported.

Many losing their job-based coverage turned to the state’s ACA marketplace, Covered California, which, through special enrollment periods linked to the pandemic, recession, and wildfires, kept sign-ups open throughout much of the year. In addition to these factors, in 2020 the state funded premium assistance that subsidized insurance policies for 45,000 middle-income enrollees and added to existing federal assistance for another 500,000 people, driving participation in Covered California. People who had lost job-based insurance also turned to Covered California.

Overall, enrollment in Covered California increased by 19% in 2020, Wilson found.

Temporary Changes Mean Challenges Remain

The  boost in federal subsidies available through the ACA marketplaces is temporary. California passed its own subsidies in last year’s budget, which the federal subsidies replaced only temporarily. A permanent increase in ACA subsidies is one of many health care components in the federal human infrastructure bill that Democrats want to pass, Cohn reported.

Wilson notes that once the federal public health emergency officially ends, so will the federal prohibition on Medicaid disenrollments. California will then have to start reverifying Medi-Cal enrollees’ eligibility, which could result in many leaving the program.

A large decline in Medicaid coverage at that point is a looming national problem that could disproportionately affect people of color. Manatt Health recently urged state and federal Medicaid leaders to start work now to streamline and improve their redetermination processes. Otherwise, there is considerable risk of many losing coverage — even those still eligible for the program after the emergency. (Recent qualitative research published by CHCF offers insights into how to improve enrollment and retention in Medi-Cal.)

Other challenges remain, in California and nationwide. The Commonwealth Fund notes that insurance has not eliminated medical debt, for instance, including debt related to COVID. The same report highlighted continued national racial disparities in coverage.

CHIS researchers noted that while California coverage rates were at an all-time high in 2020, too many Californians continue to have difficulty accessing care. While great progress has been made to expand coverage to undocumented Californians, many California adults between the ages of 26 and 50, including numerous frontline and essential workers, remain excluded from Medi-Cal and Covered California due to immigration status.

Despite the work that remains, the state and federal policies enacted to help people get and keep coverage during the pandemic have made a huge difference for millions of Americans.

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