Pandemic pushes more people into insurance market
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In March, David Doherty lost his job — and employer-paid health insurance — with Caliber Collision, an auto body repair shop. Claims for the replacement of auto glass were down by about half and revenue was down as well. So, Caliber cut workers, including managers like Doherty.
At the age of 63, Doherty had to decide how he could maintain health insurance coverage.
Many Minnesotans are facing that challenge, one made all the more difficult by a sometimes bewildering range of choices that differ greatly in cost and coverage.
Doherty decided to pick up the insurance he had through Caliber, invoking an option people have to continue coverage under a federal law known as COBRA. But that meant Doherty had to pay the full premium. Caliber would no longer pay a portion.
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“It’s like $550 a month,” he said.
That’s just for coverage for himself. Still, Doherty said it was his best option after comparing plans available for him through MNsure, the Minnesota health insurance exchange. He concluded he’d have to pay full price for those plans and was better off going with coverage under COBRA.
”I didn't qualify for any type of discount or assistance, which I find a little strange, because I don't have any income except for my unemployment,” he said.
Employers reeling from the impact of COVID-19 have shed workers at a frightening clip. In Minnesota, about 700,000 people have filed for unemployment insurance since the start of the COVID-19 crisis. And as people lose jobs, they and their dependents typically also lose health insurance. Most Minnesotans get their healthcare insurance at work. It adds up to hundreds of thousands of people facing a loss or interruption in coverage.
“There's no question about that,” said Ezra Golberstein, an associate professor at the University of Minnesota’s School of Public Health, Division of Health Policy and Management. ”For every person who holds an employer-sponsored insurance policy, there is on average just about one additional person per policyholder who's covered as a dependent, whether that's a spouse or partner or a child.”
In April, the State Health Access Data Assistance Center at the University of Minnesota’s School of Public Health forecast that nearly 400,000 Minnesotans would suffer a disruption in health insurance coverage. A more recent projection from the Urban Institute estimates 600,000 Minnesota workers and their dependents could lose employer-provided healthcare insurance. The organization figures about a fifth of those people could end up uninsured.
People who lose their jobs and don't qualify for government programs, tax breaks or subsidies often face painfully high health insurance premiums, whether they continue with COBRA or find an unsubsidized plan on their own.
“They pay full price of a health insurance premium and they are not cheap,” said Lynn Blewett, director of the State Health Access Data Assistance Center. “An average annual premium for an individual is $6,700 a year, and for a family it’s about $19,000 to $20,000 a year.”
On top of that, there are deductibles that must be paid and typically high caps on out-of-pocket expenses. In a bad year, a family could run up about $35,000 in premiums and out-of-pocket expenses.
Fortunately, some people can go on an insurance plan of a spouse or domestic partner. For those who are 65 or older, there’s Medicare. As of the middle of this month, about 40,000 Minnesotans in that age group had filed for unemployment insurance. And many people who’ve lost their health insurance coverage now have incomes low enough to qualify for public programs or financial help.
People should always check to see if they qualify for some assistance, said Nate Clark, CEO of MNsure, the state’s health insurance marketplace where individuals and families can compare and choose health insurance coverage.
“Never assume you make too much money,” he said. “Come to MNsure, create an application. And then that will give you a final determination that will tell you what kind of subsidies you're eligible for and how you might be able to afford that coverage.”
Clark said a survey done by the Minnesota Department of Health before the COVID-19 crisis found that three-quarters of uninsured Minnesotans could qualify for a subsidy.
An individual with an annual income of less than $16,611 is eligible for the state’s medical assistance program, which provides comprehensive health care for little or no cost. Deductibles and copays for adults are only a few dollars.
Even families with household incomes of about $70,000 may qualify for coverage for children. About 1.1 million Minnesotans are on medical assistance or MinnesotaCare, which requires modest premium payments. MinnesotaCare has a maximum individual monthly premium of $80. The state expects about 130,000 more people will sign up for the programs over the next year or so.
”Each of these programs provides coverage for lower or no income residents,” said Matt Anderson, assistant commissioner for health care with the Department of Human Services. ”And so as people lose employment or their incomes drop, these are avenues for people to maintain health care coverage during the crisis.”
Trying to sort through insurance options and divine what's best can be an extremely difficult task. There are many things to consider and deal with, from deductibles and provider networks to medication coverage and unexpected documentation requirements.
But Clark says MNsure has an army of people who offer free guidance. There's an assistance link on the MNsure website.
“We have a network of professional assisters around the state who are in a position to help folks understand their coverage options and help them get enrolled in a plan,” he said.
Clark said the assisters include insurance brokers who receive commissions from insurers.
Some may only sell plans from certain health insurance companies. But Clark says brokers have a fiduciary responsibility to clients to help them choose the best plan for them.
Just about anyone exploring health insurance coverage options will quickly conclude they could use some advice.
”It helps to have a broker who's done this thousands of times,” said Mary (Ginny) DeSanto, a health insurance broker in Minneapolis. “It’s a complicated process.”
And it keeps getting more complicated. There’s been talk in Congress about subsidizing COBRA. And the window for picking up COBRA coverage has been tweaked for people losing employer-provided health insurance.
Typically, there's a 60-day window to sign up for COBRA. But the IRS and U.S. Department of Labor have said people will have until 60 days after the end of the COVID-19 national emergency order to enroll. It’s unclear when that end date may be. If the national emergency were to end June 29, it appears that anyone who has lost employer health insurance so far this year could have until at least Aug. 28 to enroll for COBRA.
Golbenstein of the University of Minnesota said the insurance coverage crunch ignited by COVID-19 job losses is yet another wake-up call for the need to reform healthcare.
“How do we make our health insurance system work better for everybody? We really have exposed a lot of the weaknesses of our health insurance system with the pandemic right now,” he said.