COVID-19 job losses could drive down employer plan enrollment by as much as 35M, report shows

As many as 35 million people could drop out of employer-sponsored coverage amid COVID-19, according to a new analysis.

Health Management Associates estimates that between 12 million and 25 million people will lose coverage through their employers as unemployment skyrockets nationwide. The Department of Labor reported that 6.6 million people filed for unemployment last week alone.

HMA projects enrollment changes in three scenarios depending on how much the unemployment rate increases: 10% unemployment, 17.5% unemployment or 25% unemployment. In the first scenario, enrollment in employer plans would decline from 163 million to 151 million.

In tandem, Medicaid enrollment would likely increase from 71 million to 82 million. Marketplace coverage would likely stay on par with between 12 million and 13 million enrollees and the number of uninsured could increase from 29 million to between 30 million and 31 million.

Meanwhile, unemployment at 25% would lead to enrollment in employer coverage to drop to 128 million, while Medicaid enrollment would skyrocket to 94 million, HMA estimates.

High unemployment would also boost the number of uninsured to between 39 million and 40 million, according to the report.

“This is the first economic downturn since Medicaid expansion, and what we’re experiencing is unprecedented,” said Jay Rosen, founder and president of HMA, in a statement.

“With millions of Americans expected to enroll in Medicaid in the coming months, our COVID-19 impact estimates at the state level are critical for policymakers trying to begin the complex steps of implementing new laws and policies while navigating an array of financial implications,” Rosen said.

The potential impact on the exchanges should unemployment rise to 25% is more of a question, according to the report. Enrollment in individual market plans could rise to 15 million or more, but it could also stay flat or potentially decline as millions more drop out of exchange plans.

HMA said it will be updating its model and analysis as the pandemic continues.

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