A historic surge in jobless claims threatens to leave millions of Americans joining the ranks of the uninsured, an increasingly grim outlook in the country that’s emerging as the new global epicenter of the coronavirus pandemic.
The moment is shaping up to be a clear test of Obamacare, on the same week the health care law turned 10 years old. The key question is whether the pandemic will drive the newly uninsured to the law’s health insurance marketplaces, proving the law’s value as a backstop, or if they'll take their chances and forego coverage as the country braces for a possible recession.
A major wild card in all of this: Whether President Donald Trump will embrace Obamacare, if just temporarily, even as his administration joins the legal battle to destroy it.
Workplace health plans remain the dominant source of private coverage in the United States — the Obamacare insurance markets, with about 11 million enrollees nationwide, represents just a fraction of that. But the law’s marketplaces, along with expanded Medicaid in the roughly two-thirds of states who adopted the program, may provide a safety net that hasn’t been available in previous financial panics — let alone one tied to a massive health crisis.
“This was what the Affordable Care Act is here for,” said Sabrina Corlette, who heads Georgetown University’s Center on Health Insurance Reforms. “The individual market is a true safety net, and that is what it was designed to do — to catch people in this situation.”
The Trump administration said it has been weighing whether to temporarily reopen enrollment on HealthCare.gov, months after the federal site’s annual sign-up period closed. It’s a measure already taken by at least 11 states and the District of Columbia, who oversee their own insurance marketplaces.
Insurers expect the Trump administration to relaunch HealthCare.gov as soon as Friday, one day after the Labor Department reported a record-shattering 3.3 million unemployment claims in the past week. Health department officials declined to comment.
It could make for some awkward political optics for Trump to rely on Obamacare while he’s urging the Supreme Court to overturn the law. The justices have agreed to hear a challenge to the law brought by more than a dozen Republican-led states.
Trump earlier this week defended his continued support of the lawsuit that could result in 20 million Americans losing health insurance. He offered vague assurances that Republicans would support insurance protections for preexisting conditions, though the party's previous health proposals would weaken those provided in Obamacare.
"What we want to do is get rid of the bad health care and put in a great health care," Trump said.
Obamacare already allows special enrollment periods for certain life circumstances, including job loss or changes in household income. However, broadly reopening the insurance marketplaces would give more of the nation’s 28 million uninsured a chance to get coverage amid a health crisis.
The insurance marketplace in Washington state, the earliest hot spot for the nation’s coronavirus outbreak, was the first to reopen in response to the disease. As of Thursday, about 1,300 people have signed up and another 3,100 have begun the process, which marketplace spokesperson Michael Marchand described as unusually high level of activity for a special enrollment period. Marketplace officials are also gauging whether to remain open beyond April 8 as originally planned.
“As the pandemic issue becomes more prevalent and closer to home to people, we’re seeing more people who have been uninsured coming in and asking for a special enrollment, and we believe that kind of thinking may continue as we see more and more constraints being placed on businesses and our economy,” Marchand said.
Obamacare “navigators” who help people sign up for health insurance have reported similar interest. Mark Van Arnam, director of North Carolina's navigator program, said his program typically gets 15 to 20 requests for assistance each day outside of the regular enrollment period.
“Right now, we are seeing 45 to 55-plus requests for assistance,” he said, adding that the vast majority are from people who just lost their jobs. “That number continues to climb, as well.”
Another choice for newly unemployed people who had workplace coverage is to stay enrolled in those plans through COBRA, a law that predates Obamacare. They can stay on the plans for up to 18 months, but it’s a pricey option since they must pay the entire premium without an employer subsidy.
There are also short-term limited duration plans promoted by the Trump administration as a cheaper alternative — especially for middle-class people who don’t qualify for Obamacare’s premium subsidies. The short-term plans are typically skimpier than Obamacare plans and don’t include some of the health law’s protections for people with preexisting conditions. Some blue states have also banned or placed strict limits on these plans.
The pandemic is meanwhile throwing a spotlight on the coverage gap in 14 Republican-leaning states that haven’t joined Obamacare’s Medicaid expansion to poor adults. There are an estimated 2.3 million poor people in those states who don’t qualify for Medicaid and also don’t earn enough to receive Obamacare premium subsides.
None of the governors in nonexpansion states have so far indicated they would look to broaden their Medicaid programs amid the pandemic. Oklahoma is already moving forward with plans to expand Medicaid, while the governor also asks the Trump administration for unprecedented limits on program spending.
Larry Levitt, who oversees health policy for the nonpartisan Kaiser Family Foundation, said the uninsured numbers resulting from the current crisis are likely to be worse in states that didn’t expand Medicaid. The growth in the uninsured may be tempered by the unfortunate reality that some of the industries decimated so far — particularly in the retail and hospitality industries — have lower rates of coverage to begin with.
“It may not be quite as horrible as it first appears, since the job loss is probably concentrated in industries where fewer employers offer health benefits,” Levitt said.
Another question is whether cost-conscious employers start shedding workplace coverage and sending employers onto the Obamacare marketplaces. Some analysts are already predicting that, according to Deep Banerjee, director at S&P Global Ratings.
Some health plans are eyeing Obamacare's individual market as a potential savior for small businesses, who already struggled to afford to help pay employees’ premiums. Some small companies have begun asking their health insurers for grace periods for their monthly bills or even halting their contracts, said Ceci Connolly, president of the Alliance of Community Health Plans, which represents nonprofit insurers.
“A special enrollment period could be the next safety net for some of these people,” she said.