OCTOBER 2020 Issue Brief Hanging On to Coverage? Millions of Californians Have Lost Jobs During the COVID-19 Pandemic. Did They Also Lose Insurance? Katherine Wilson, Wilson Analytics Laurel Lucia, Director, Health Care Program, UC Berkeley Labor Center Summary Millions of Californians lost jobs during the COVID-19 (March 31, 2020). (While some workers lost jobs due pandemic. But early information from California’s insur- to the pandemic in March, most coverage for this ance regulators suggests that — at least through June group would have remained in force until the end of — the number of Californians with job-based health the month.) insurance has not changed as dramatically as feared. This may partially help explain why the state’s Medicaid program, Medi-Cal, has not yet experienced a big surge Fewer Lose Job-Based in enrollment. Coverage Than Predicted The ESI enrollment decline of 190,000 (1.0%) in the Specifically, employment levels in June were 13.9% below second quarter was a mere fraction — less than one- pre-pandemic levels, with 2.6 million Californians having tenth — of the reductions in ESI that might have been lost their jobs.1 But, contrary to worst-case scenarios, our expected given the massive job losses in the state. The analysis showed that enrollment in employer-sponsored rates of decline in small groups (1.2%) and large groups insurance (ESI) was down only 1.0%, about 190,000 (0.9%) were similar. Enrollment in the individual market enrollees, as of June 30. Many projections earlier this and in Medi-Cal rose during the period, offsetting job- year suggested we might see close to two to three mil- based coverage declines. Medi-Cal enrollment rose by lion Californians losing employer-sponsored insurance 242,000 (1.9%).4 Individual market enrollment rose by by this time.2 nearly 50,000 enrollees (2.2%) over March. Background Possible Factors Job-based coverage is the most common form of health A collection of factors may explain why there has been insurance in California, with 18.0 million workers and relatively little decline in employer-sponsored coverage family members enrolled at the end of 2019, according through June. Together they may help explain the gap to figures reported by insurers to California regulators — between earlier projections and the actual enrollment the Department of Managed Health Care (DMHC) and decline to date. These factors include: the California Department of Insurance (CDI).3 $$ Health benefits extended: Some employ- To begin to assess the impact of the COVID-19 pan- ers reportedly continued health insurance demic on insurance coverage, this analysis compared benefits for workers when they furloughed enrollment at the end of the second quarter (June 30, them. National research published by The 2020) with enrollment at the end of the first quarter Chart. Changes in California Health Insurance Enrollment, Second Quarter 2020 ENROLLMENT CHANGE PERCENTAGE CHANGE –189,917 –1% ESI ESI Individual Individual 48,937 2.2% Medi-Cal Medi-Cal 241,562 1.9% Notes: ESI is employer-sponsored insurance (group coverage and self-insured coverage, where employers contract for administrative services only). Medicare not shown. Sources: Author estimates of statewide ESI and individual enrollment. Estimates based on DMHC enrollment at first- and second-quarter ends, 2020, and extrapolation of CDI December 2019 enrollment forward, by applying the rates of change from DMHC enrollment. (Additional details in Methods section.) Health Plan Financial Summary Report (2019–20), DMHC; California Health Insurance, Enrollment, 2020 — Data, CHCF; and Statewide Medi-Cal Certified Eligibles (2010 to August 2020), DHCS. Commonwealth Fund found that, of those who $$ Workers paying for COBRA coverage exten- said they or a spouse or partner had coverage sions: Workers may have elected to enroll in through a job that was lost or from which they COBRA coverage when laid off. Fear of the virus were furloughed during COVID-19, more than and access to additional federal employment half (53%) said they or their spouse still had benefits ($600/week) may have enabled some job-based coverage through a furloughed job who lost jobs to pay their COBRA premiums as of late May.5 In interviews with researchers at and retain their group insurance. Nationally, of the Urban Institute and Georgetown University those who said they or a spouse or partner had in mid-April through early June, “insurers coverage through a job that was lost or from described a ‘hold-on mentality,’ with some of which they were furloughed during COVID-19, their employer clients having a ‘degree of opti- approximately 10% reported they or their spouse mism that the lock down will lift and there will or partner had enrolled in COBRA or planned to be a return toward normalcy....’ Many employ- enroll in COBRA in late May.8 ers have embraced the concept of ‘furloughing’ $$ Job loss more concentrated among sectors less staff, meaning they are no longer on payroll likely to provide coverage: While all sectors of but are allowed to maintain benefits, including the economy lost jobs,9 job loss has been more eligibility for the group health plan.”6 Similarly, prevalent in sectors and occupations less likely to the impact of the Paycheck Protection Program provide ESI. While projections for ESI losses made (PPP) is not yet fully understood but could have earlier this year sought to take this into account, played a role in maintaining ESI among some it is possible that actual job loss may have been businesses.7 As unemployment drags on, fur- even more concentrated in sectors and occupa- loughed workers currently receiving benefits tions less likely to have job-based coverage than remain at risk for losing coverage. Hanging On to Coverage? www.chcf.org 2 assumed. While this may account for some of 10% during this time period.12 At the same time, the avail- the difference between the projections and the able data indicate that the lower-than-projected decline in current numbers, the magnitude of difference ESI enrollment has been a national trend,13 suggesting the suggests this cannot be the sole reason.10 need to continue to better understand all of the factors affecting recent Medi-Cal enrollment totals in this state. $$ Workers retaining coverage through spouse/ partner: Some workers losing their own job- based coverage could get coverage through their Individual Enrollment Grew, with partner’s or spouse’s job-based coverage. While More Enrollees Coming from Job- some projections also sought to account for this, Based Coverage the number of workers who could retain coverage The individual market’s second-quarter expansion of this way may have been underestimated. nearly 50,000 enrollees (2.2%) was an unusual event. Typically, individual enrollment declines gradually Medi-Cal Trajectory Reversed as throughout the year because special enrollments (permit- ted outside of the usual fall open enrollment season, for Enrollment Offsets Job-Based life events such as employment loss or relocation) are out- Insurance Loss paced by ongoing attrition. California’s health exchange, Medi-Cal’s second-quarter expansion, though moder- Covered California, which enrolls more than 60% of the ate, was noteworthy because it followed eight straight state’s individual market participants, has maintained a quarters of enrollment declines. The size of the sec- COVID-19 special enrollment period (SEP), providing ond-quarter Medi-Cal increases roughly offset the ESI expanded opportunities to enroll outside the standard enrollment reductions. California’s policy of delaying open enrollment period. Covered California examined annual eligibility redeterminations until the end of the new enrollments and terminations during the SEP and public health emergency likely contributed to the Medi- found that reduced availability of job-based coverage Cal enrollment growth in the second quarter.11 was behind many enrollment shifts.14 Covered California reported that the majority of signups were now due to However, California’s percentage increase in Medicaid loss of job-based coverage, that fewer signups came enrollment between February and June was one of the from Medi-Cal, and that when individuals left Covered lowest rates of increase observed among states, with California, fewer left for job-based coverage than before some states experiencing enrollment increases as high as and more went uninsured or to Medi-Cal. Table. Statewide Health Insurance Enrollment: Second-Quarter 2020 Changes in Enrollment, March 31 to June 30 Enrollment Levels Quarterly Change (March to June) March 31 June 30 Enrollment Percentage Employer-Sponsored Insurance (ESI) 18,360,157 18,170,240 (189,917) -1.0% - Group ESI 12,501,578 12,380,579 (120,999) -1.0% - Self-Insured ESI (ASO) 5,858,579 5,789,661 (68,918) -1.2% Individual 2,269,165 2,318,102 48,937 2.2% Medi-Cal 12,447,514 12,689,076 241,562 1.9% Notes: ASO refers to administrative services only provided to self-insured employers. Not shown: Medicare enrollment. Sources: Author estimates of statewide ESI and individual enrollment. Estimates based on DMHC enrollment at first- and second-quarter ends, 2020, and extrapolation of CDI December 2019 enrollment forward, by applying the rates of change from DMHC enrollment. (Additional details in methods section.) Health Plan Financial Summary Report (2019–20), DMHC; California Health Insurance, Enrollment, 2020 — Data, CHCF; Statewide Medi-Cal Certified Eligibles (2010 to August 2020), DHCS. Hanging On to Coverage? www.chcf.org 3 Looking Ahead These data suggest that by the end of June, California had to unfold, employer responses, and the extent to which not experienced reductions in ESI coverage of the magni- the federal government provides support for workers, tude predicted by many. While it is a relief that losses were businesses, and states. This data project will continue to not as large as predicted, more losses may lie ahead. track insurance levels, examining quarterly enrollment data as they become available. Other measures, as they Californians losing coverage through their jobs may face emerge, will also help explain enrollment dynamics. many difficulties at a time when access to affordable health care is critical, and while they face many other COVID-19-related hardships. The Affordable Care Act Methods and Data Sources and California state policies have improved coverage To gauge midyear enrollment levels in job-based and indi- options for those without employer-sponsored cover- vidual insurance, the quarter-end enrollment figures for age, but potential difficulties for those losing coverage DMHC-regulated health plans in 2020 were reviewed.15 could include disruptions to care and provider relation- Enrollment is a snapshot as of the quarter-end date, typi- ships, barriers to eligibility based on immigration status, cally March 31, June 30, September 30, and December challenges enrolling in or affording other sources of cov- 31. In this discussion, enrollment is referred to either by erage, or even becoming uninsured. these dates or respectively as the first-, second-, third-, and fourth-quarter enrollment. More research and different data points are needed to help us better understand more about Californians los- While CDI does not publish quarterly enrollment, its ing their job-based coverage; for example, among which enrollment levels for March 31 and June 30 were esti- occupations, geographies, racial and ethnic groups, and mated by applying the DMHC market-specific rates of income levels are losses most concentrated? What was change to CDI’s year-end enrollment.16 In the final step, their experience in seeking other types of coverage, and DMHC and CDI enrollment were summed by market if they remain uninsured, which are the largest barriers (group, ASO, and individual) to yield statewide enroll- to coverage? This research and data will be particularly ment estimates for the end of the first and second important for understanding transitions to Medi-Cal given quarters of 2020. that the increase in Medicaid enrollment in California has not been as large as in most other states. Medi-Cal enrollment reflects the California Department of Health Care Services, Research and Analytic These data reflect one point in time during an evolving Studies Division, Statewide Medi-Cal Certified Eligible situation, with health coverage levels dependent on how Individuals, 2010 to August 2020 series, which includes the pandemic and the economic repercussions continue both fee-for-service and managed care enrollment. Hanging On to Coverage? www.chcf.org 4 Endnotes 1. Local Area Unemployment Statistics, California, Statewide, 8. Sara R. Collins et al., “An Early Look at the Potential Implications Series ID LASST060000000000003, Bureau of Labor Statistics of the COVID-19 Pandemic for Health Insurance Coverage,” The (BLS), extracted on September 17, 2020. Of these, 1.9 million Commonwealth Fund, June 23, 2020. were non-farm payroll jobs, which were more likely to have 9. “Economy at a Glance: California,” Bureau of Labor Statistics, included employer-sponsored health insurance. State and Area extracted September 18, 2020. Employment, Hours, and Earnings, California Statewide, Total Nonfarm, 2010 to July 2020, Series ID SMS06000000000000001, 10. Lucia et al., “Health Coverage.” For example, a study by the BLS. Unemployment includes both lost and furloughed jobs. UC Berkeley Labor Center and UCLA Center for Health Policy Research estimated that 35% of California workers in industries at 2. See, for example: Rachel Garfield et al., “Eligibility for highest risk of job losses had coverage from their own jobs before ACA Health Coverage Following Job Loss,” Kaiser Family the pandemic, and that 9 dependents would lose coverage for Foundation, May 13, 2020; Bowen Garret and Anuj every 10 workers losing job-based coverage, yielding an estimate Gangopadhyaya, How the COVID-19 Recession Could Affect of 1.7 million losing coverage with 2.6 million Californians Health Insurance Coverage, Robert Wood Johnson Foundation, losing jobs. If, for example, only 20% of people losing jobs May 2020; Ezra Golberstein et al., Estimates of the Impact had job-based coverage, closer to 1 million Californians would of COVID-19 on Disruptions and Potential Loss of Employer- be expected to lose coverage, still significantly more than the Sponsored Health Insurance (ESI) (PDF), State Health Access 190,000 reduction in enrollment by the end of June. Data Assistance Center, April 2020; and Laurel Lucia et al., “Health Coverage of California Workers Most at Risk of Job Loss 11. Sandra Williams (chief, Medi-Cal Eligibility Division) to all county Due to COVID-19,” UC Berkeley Labor Center and UCLA Center welfare directors and administrative officers and Medi-Cal for Health Policy Research, May 8, 2020. program specialists/liaisons, Information Letter I 20-14 (PDF), May 29, 2020. 3. Katherine Wilson, “Data Show 2019 California Health Insurance Enrollment Struck a Balance,” The CHCF Blog, July 31, 2020. 12. Medicaid and CHIP Enrollment Trends Snapshot through June 2020 (PDF), Centers for Medicare & Medicaid Services, 4. To provide a more complete picture, change in total Medi-Cal September 2020. enrollment is based on DHCS reporting, which includes both fee-for-service and managed care enrollment. Regulators report 13. Anuj Gangopadhyaya et al., “As the COVID-19 Recession only managed care Medi-Cal enrollment. Note that DHCS and Extended into the Summer of 2020, More Than 3 Million Adults regulator data were relatively consistent in that both reported Lost Employer-Sponsored Health Insurance Coverage and 2 Million modest increases in Medi-Cal managed care. Became Uninsured (PDF),” Urban Institute, September 2020. 5. Sara R. Collins et al., “An Early Look at the Potential Implications 14. Coverage When You Need It: Lessons from Insurance Coverage of the COVID-19 Pandemic for Health Insurance Coverage,” The Transitions in California’s Individual Marketplace Pre and Post Commonwealth Fund, June 23, 2020. the COVID-19 Pandemic (PDF), Covered California, September 22, 2020. 6. Kevin Lucia et al., The COVID-19 Pandemic: Insurer Insights Into Challenges, Implications, and Lessons Learned, Robert Wood 15.“Health Plan Financial Summary Report” (2019–20), DMHC, n.d. Johnson Foundation, June 2020. 16. At year-end 2019, DMHC accounted for 11.5 million (92%) of all 7. Leemore S. Dafny et al., “How Has Covid-19 Affected Health group enrollees and 0.8 million (14%) of all ASO enrollees, for a Insurance Offered by Small Businesses in the U.S.? Early Evidence total of 12.3 million (68%) of the state’s 18.0 million ESI enrollees; from a Survey,” New England Journal of Medicine Catalyst CHCF, 2020 Edition — California Health Insurance Enrollment, Innovations in Care Delivery, August 14, 2020. July 2020. Hanging On to Coverage? www.chcf.org 5