Covering the Uninsured During the COVID-19 Pandemic

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As the U.S. prepares for a lengthy battle against the COVID-19 pandemic, it is important that individuals who contract the virus get tested and needed care, whether or not they have insurance. Congress is poised to make testing free for all Americans, but more should be done. Millions of Americans could lose their jobs—and their health insurance—in coming weeks. Congress should create new pathways to full coverage for the uninsured and a back-up plan to finance care for infected patients who remain uninsured throughout this public health emergency.

Patients with insurance are more likely to seek medical advice before their condition becomes acute. They are more likely to self-quarantine if advised to do so by a medical professional. Early treatment might limit the severity of their illness and free up hospital resources for more acutely ill patients.

The second round of emergency supplemental legislation, approved by the House last week, would provide $1 billion to pay for testing for those without insurance coverage. The bill also requires commercial insurers to waive co-payments for enrollees who are tested. The Senate passed and the president signed the bill yesterday in a flurry of action aimed at mitigating the coronavirus crisis. The White House and Congress are working on a next phase legislative response that will include “bigger, bolder countermeasures to the economic troubles brought” on by the COVID-19 pandemic. These evolving legislative efforts provide an opportunity to go beyond testing to ensure maximum insurance coverage in advance of a surge in medical expenses.

We do not need to create a new program to provide coverage for the uninsured. Most already qualify to enroll in a subsidized private health plan or Medicaid. Congress should take advantage of what is already available to expand coverage and promote more efficient use of health resources.

The first pathway is through the Affordable Care Act’s insurance exchanges. New York State has taken the lead by providing a special open enrollment period from March 16 to April 15. Insurance is available at the same premiums that were offered during the regular sign-up period in late 2019, without penalties or exclusions. That will allow uninsured New Yorkers to get coverage now, even as the virus spreads. 

Congress should require all states to offer a similar open enrollment period for exchange coverage through at least the end of April and perhaps longer. The uninsured who sign up for coverage would pay the same premiums as current exchange enrollees. The ACA’s premium credits and cost-sharing subsidies would be available to those who qualify because of low income.

As the economy falls into a recession, the number of uninsured could increase sharply as workers lose their job-based plans. These workers are eligible under current law for a special open enrollment period for coverage offered on the ACA’s exchanges. Congress should work with the states to encourage robust public information campaigns to ensure the temporarily unemployed are fully aware of their options until they are able to go back to work.

A surge in mid-year sign-ups will come at a cost to insurance plans. Their 2020 premiums, which were set before anyone was aware of COVID-19, are already insufficient to cover the likely costs that will be incurred this year. A new special enrollment period would add to their financial burden. The federal government could help by providing funds to support new reinsurance schemes in all fifty states. Reinsurance would reimburse plans with expenses substantially higher than average, funded by contributions from all insurers participating in the exchange.

The second pathway is employer coverage, which also should accommodate new sign-ups. According to the Kaiser Family Foundation, there were 3.3 million people who were uninsured in 2018 even though they were eligible to enroll in an employer-sponsored plan. Employers should be required to give these workers another opportunity to sign up with their plans through the end of the April at the same premiums that apply to the rest of their workforce.

The third pathway is Medicaid coverage for the uninsured with lower incomes. The fourteen states that haven’t expanded their Medicaid programs as allowed by the ACA should be strongly encouraged to provide temporary, two-year Medicaid coverage to all uninsured individuals with incomes below the federal poverty line (FPL).

The federal government would pay 100 percent of the costs of these new enrollees for the first full year of operation in each state.  That is consistent with federal payments to expansion states in the early years of the ACA.  In the second year, federal payments would cover 95 percent of the cost. After two years, states could elect to continue coverage for this population at the 90 percent federal matching rate now in effect for expansion states.  Individuals with family incomes up to 100 percent of the FPL would be eligible for Medicaid, but states could expand eligibility to 138 percent of the FPL.

Expanding Medicaid in non-expansion states to all poor households is critically important during the current crisis because they have no realistic alternative for getting insurance coverage today. Their incomes are too high to qualify for Medicaid under current state rules, and too low to qualify for subsidized coverage in the ACA exchanges. The Kaiser Family Foundation estimates there were 2.3 million low-income households in this coverage gap in 2018.

These steps would lower but not eliminate the number of uninsured. Current residents who do not have proper documentation to remain in the U.S. do not qualify for ACA subsidies or Medicaid and would therefore remain uninsured even with new enrollment periods. As we have seen, others who do qualify for coverage may fail to sign up, even at no cost to themselves.

Physicians, hospitals, and others caring for the uninsured who contract COVID-19 should be assured that they will be paid for the surge in services for these patients. Congress should establish a temporary federal fund, administered by the states, for this purpose. Payment rates could be tied to existing public insurance fee schedules (Medicare or Medicaid), or alternative rates established by the states. States that fail to expand Medicaid to at least 100 percent of the FPL on a temporary, two-year basis should be required to finance a portion of the costs.

The COVID-19 virus does not discriminate. It will affect the insured and uninsured alike.  It is in the interests of all Americans to lessen the burden of the disease on all those who contract it by ensuring they get the care they need. That’s the right policy morally, and for public health.  

Joseph Antos is the Wilson Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute. James C. Capretta is a Contributor at RealClearPolicy and a resident fellow at the American Enterprise Institute.


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