September 28, 2020; New York Times
One of the worst times to lose your health insurance would have to be during a pandemic. To date, 12 million people have lost employer-based health insurance coverage during the COVID-19 pandemic and related economic shutdown, but 85 percent of those affected have been able to find substitute insurance, whether that be through the Obamacare health exchange, Medicaid, or a spouse’s plan.
But as the end of the year approaches and CARES Act protections expire, that could be changing. Stan Dorn, the director of the National Center for Coverage Innovation at Families USA, raises the alarm. Dorn tells Reed Abelson of the New York Times that, “we are on track to have the largest coverage losses in our history.”
Abelson notes that, “Many businesses have tried to keep their workers insured during the pandemic. Employers relied on government aid, including the Paycheck Protection Program (PPP) 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,” says Leemore Dafny, a professor at Harvard Business School and lead author of an article last month looking at the pandemic’s effect on small business. According to Dafny, nearly a third of small businesses surveyed in late June said they were not sure they could keep paying premiums beyond August.
“We will probably really start to see it during renewal time, November and December,” Mark Hall, a professor who directs the health law and policy program at Wake Forest University,” remarks. “That will be when the money really dries up.”
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Abelson notes that many small business owners prioritized using PPP dollars to keep their employees on health insurance, even when employees were furloughed.
“You don’t need not to have your health insurance in the middle of the pandemic,” observed business owner Neil Abramson, who operates consignments stores in Leominster, Massachusetts, a small town about an hour’s drive northwest of Boston. Abramson adds, “Are you going to tell your sister that you are going to cancel your insurance because you don’t have the money?”
Small businesses, of course, are often least able to afford health benefits for their employees. A 2019 survey by the Kaiser Family Foundation found that while nearly all large companies offer health insurance to their employees, only 56 percent of firms with fewer than 200 employees did so. “Health insurance is an enormous cost for small businesses,” observes Amanda Ballantyne, the executive director of the Main Street Alliance, a small business advocacy group.
Many businesses, notes Abelson, are calling on Congress to provide more money to keep people covered amid the pandemic. Not surprisingly, health insurers are on board with this. “We believe Congress should provide temporary subsidies or direct financial assistance for employers to protect the health and financial stability of hard-working Americans,” says Justine Handelman, a senior vice president at the Blue Cross Blue Shield Association, which represents the nation’s Blue Cross plans.
Of course, health insurance is just one piece, albeit an important one, of a larger puzzle, as many American families struggle to make ends meet across the board. The reality is that, wherever one looks, whether it’s housing, commercial real estate, unemployment—or, yes, health insurance—the failure of the federal government to extend the CARES Act is kicking a ton of problems down the road. And they will, alas, most surely come back to bite us.—Steve Dubb