Millions of people are out of work in America. Thanks to the coronavirus and the economic turmoil that followed, many North Carolinians have not only lost their jobs but also their employer-sponsored health insurance. The significant impacts of these past few months on the insurance market are the subject of health care policy analyst Jordan Robert’s latest piece in Carolina Journal. Roberts writes:
Health insurance coverage is one issue that will transcend short-term and long-term recovery from COVID-19. Short-term changes in health coverage will likely require long-term strategies to address the needs of individuals whose source of health coverage changed during the pandemic.
Loss of employer health insurance will likely send many people into Medicaid enrollment. Roberts writes:
Economic downturns almost always increase Medicaid enrollment. The [Health Management Associates] report’s high unemployment scenario indicates North Carolina could see an increase of as many as 568,000 people on the Medicaid rolls. Data from the N.C. Department of Health and Human Services shows 2.2 million North Carolinians already enrolled in Medicaid in May.
This could cause serious strains on the state budget. Roberts explains:
Lawmakers should consider the budgetary impact of enrollment changes in the Medicaid program. The Families First Coronavirus Response Act temporarily raised the federal medical assistance match rate from 67.4% to 73.4%. Yet Medicaid is one of the most expensive programs, totaling $14.8 billion, of which the state contributes about $3.7 billion. Given the estimated $4 billion shortfall in fiscal 2020-21, lawmakers need to consider how enrollment changes in Medicaid will affect overall spending.
Many who lose their employer-sponsored insurance but don’t qualify for Medicaid will be sent to the Affordable Care Act’s individual market. Roberts writes:
On net, the HMA report projects the individual market in North Carolina will grow by 27,000 people. For reference, there were 501,271 individual market enrollees in North Carolina in 2019.
However, many of these plans are unaffordable for people and their families. To reduce the costs, Roberts suggests North Carolina seek a 1332 waiver from the federal government. Roberts explains:
Lawmakers interested in lowering the price of insurance in the individual market should consider requesting a section 1332 waiver. Section 1332 waivers allow states to waive certain ACA requirements to create a more tailored health insurance market. States have used section 1332 waivers to set up a state-based reinsurance program to help employers offset the cost of expensive claims. Reinsurance programs in other states have been able to lower premiums by as much as 40%.