As we continue to adjust to our new normal, health policy researchers have been hard at work to understand the potential effects that the novel coronavirus (COVID-19) pandemic might have on the health care system in the United States. This month, we looked at studies focused on the relationship between increased unemployment and access to health insurance as well as the impact of deferred care on net health care costs.

Collins S, et al. New Survey Finds Americans Suffering Health Coverage Insecurity Along with Job Losses. The Commonwealth Fund, April 21, 2020. The COVID-19 pandemic has had disastrous effects on the labor market with one in five workers in the U.S. filing for unemployment since the mid-March. Because the majority of insured Americans under 65 have job-based health coverage, researchers at the Commonwealth Fund and SSRS conducted a survey to study how recent job loss has impacted access to health insurance.

What It Finds

• Forty-one percent of respondents dealing with job insecurity, including job loss, pay cuts, and lost hours, reported either losing insurance, being worried about losing insurance, or being uninsured prior to the pandemic.
• Of the 32 percent of adults aged 18-64 who reported losing their job or having their pay and/or hours cut as a result of the pandemic, three percent reported losing their job-based health insurance. This does not include family members or spouses who may have lost coverage as a result.
• Twenty percent of those aged 18-64 who lost their job or experienced reduced hours and/or pay reported being uninsured before the pandemic, a significantly higher rate than the national uninsured rate of working-age people (12 percent), reflecting that those hit hardest by the economic downturn are in industries that often do not offer health coverage.
• Sixty-nine percent of those 18-64 said that potential out-of-pocket (OOP) costs would be an important factor in the decision of whether or not to seek care if they developed symptoms of COVID-19.

Why It Matters

The COVID-19 pandemic has exacerbated gaps in the U.S. health care system. Many of the workers losing jobs, hours, or pay appear to be less likely to have, or be offered, job-based health insurance. Many employers who do offer health insurance may be furloughing employees but continuing their group health plans, but they are unlikely to be able to do so indefinitely.  Federal and state policymakers have had varying responses to this issue. For example, most state-based marketplaces implemented a broad special enrollment period for the uninsured in response to the COVID-19 pandemic, while the Trump administration chose not to. Over time, the losses of job-based coverage could affect people in a broader range of industries, requiring the ACA marketplaces and state Medicaid programs to continue their efforts to educate consumers and help connect them to affordable, comprehensive insurance options.

Rogers H, Mills C, and Kramer M. Estimating the Impact of COVID-19 on Healthcare Costs in 2020: Key Factors of the Cost Trajectory. Milliman, April 23, 2020. The COVID-19 pandemic has overwhelmed hospitals, causing shortages of vital medical supplies like personal protective equipment (PPE), ventilators, and medications. At the same time, the pandemic has brought many non-COVID-related medical services to a temporary halt. Researchers at Milliman analyzed costs associated with the influx of COVID-19 patients and the accompanying deferral and elimination of other medical services to estimate how the pandemic might affect health care costs over the remainder of 2020.

What It Finds

• If the delay of medical services continues through the end of June this year, national health care costs through June will see net reductions between $140 billion and $375 billion. If deferred care continues through the end of the year, net 2020 health care costs could be reduced by between $75 billion to $575 billion.
• Because of the countercyclical nature of Medicaid, while commercial and Medicare payers will likely see a net decrease in health care costs, Medicaid payers may see net increases due to a potential influx of beneficiaries.
• Almost all metropolitan statistical areas (MSA) are anticipated to have a net health expenditure decrease, but hotspots such as New York City, New Orleans and some Long Island counties are expected to see a smaller reduction due to a higher number of COVID-19 patients.
• Health care costs following the pandemic are hard to predict, but are likely to be significant due to pent-up demand.

Why It Matters

Because the U.S. health care system is market-based, and most insurers reimburse providers on a fee-for-service basis, the system depends on volume to survive. Hospitals largely rely  on elective procedures like hip and knee replacements for financial solvency. Health insurers rely on receiving more dollars in health insurance premiums than they spend on medical care. Studies like this shed light on costs directly related to COVID-19 testing and treatment as well as the residual effects of the public health and economic crisis on various health care industries. Policymakers and health care stakeholders can use these data to understand and prepare for the months ahead, and for life after the pandemic.