How a COVID-19 recession could impact health coverage

Health insurance form payer plan enroll
A new analysis examines how a recession could impact health coverage. (Valeriya/Getty)

Experts warn that unemployment could reach 20% by June, a scenario that would lead to as many as 43 million people dropping out of employer-based insurance, according to a new report. 

Researchers at the Urban Institute, a left-leaning think tank, modeled the impact of the looming recession driven by COVID-19 on coverage nationwide. Thirty million people filed for unemployment benefits between March 15 and April 25, according to the report. 

At 20% unemployment, between 25 million and 43 million people would drop out of employer plans, the researchers estimate. At the lower end, the report projects that 12 million people would gain coverage in Medicaid, and 6 million would enroll in individual marketplace plans. 

The remaining 7 million would likely become uninsured, according to the study. 

“With historic levels of joblessness around the corner, millions of workers and their families are about to lose their employer coverage,” Katherine Hempstead, senior policy adviser at the Robert Wood Johnson Foundation, which backed the study, said in a statement. “Our safety net is about to be tested, and it’s going to work a lot better in states that expanded Medicaid.” 

RELATED: Urban Institute—Medicaid expansion will be a critical safety net as COVID-19 job losses continue nationwide 

Should 43 million drop out of coverage, the researchers estimate that 21 million will enroll in Medicaid, 10 million will enroll in individual marketplace plans and 12 million will become uninsured. 

Adults account for 75% of those who will lose coverage in employer plans and 91% of those who would become uninsured, according to the study. 

In states that did not expand Medicaid, about a third of people who drop out of employer plans due to COVID-19 will enroll in Medicaid, while 40% will instead become uninsured. By comparison, in expansion states, half of people who lose their employer coverage are likely to enroll in Medicaid and less than a quarter will become uninsured. 

“As more workers lose their jobs and incomes in the wake of the COVID-19 pandemic, the number of people qualifying for Medicaid and subsidized marketplace coverage will climb,” the researchers wrote. “However, the increase in Medicaid coverage will be uneven across the country.”