Employer-Sponsored Coverage Flatlined Even As Unemployment Rate Shrunk: Study

Employer-sponsored health insurance flatlined during early COVID

Source: Fierce Healthcare, by Frank Diamond

While unemployment rates have declined since the early days of the pandemic, enrollment in employer-sponsored coverage has remained largely stagnant, a new study shows.

 
 

Why? Because the public health emergency made it easier for many people to enroll in Medicaid coverage or in plans on the Affordable Care Act’s exchanges. Preparing for those flexibilities to go away is critical, researchers wrote in a study published this week in Health Affairs.

 
 

Medicaid eligibility rules were relaxed during the pandemic to ensure coverage for as many individuals as possible. That’s going to change soon. The recently passed omnibus bill set a deadline of April 1 to begin the redetermination process.

“The loss of Medicaid through redetermination is a qualifying life event for a special enrollment period in either the ACA Marketplace or employer-sponsored coverage, and people losing coverage have a limited time in which to enroll in a new plan,” the study said. “Policymakers and employers should be prepared to help people who lose Medicaid eligibility identify and navigate enrollment in alternative sources of health insurance, including both Marketplace and employer-sponsored coverage.”

Researchers examined data extracted every one to two weeks by the Census Bureau’s Household Pulse Survey, which randomly selects participants from the Census Bureau’s Master Address File. The surveys collected data from 57,000 to 81,000 respondents per week, with response rates ranging from 5.3% to 7.5%. The survey period ran from Jan. 26, 2022, to Feb. 7, 2022.

 

Despite a rising employment rate during 2021, researchers said the rate of employer-sponsored insurance did not go up.

“Overall, employer-sponsored coverage has remained remarkably consistent throughout the pandemic,” the study states. “We found that enrollment in Medicaid and other public sources of coverage was responsible for the overall increases in coverage at a national level.”

Those other public sources of coverage included the ACA Marketplace plans, the Children’s Health Insurance Program and the Consolidated Omnibus Budget Reconciliation Act.

“We estimated that eight million people gained coverage during this period, primarily through sources other than employer-sponsored insurance,” the study states.

 

When asked by Fierce Healthcare if public spending on Medicaid will likely increase because of the role Medicaid played during the pandemic, the study’s corresponding author, M. Kate Bundorf, Ph.D., of Duke University, responded that “redetermination is likely to lead to fewer people enrolled in Medicaid since many people are likely no longer eligible, so public spending is not likely to increase due to the redetermination process.”

Bundorf said that one of the difficulties in mining the data involved trying to pin down exactly who were the Medicaid beneficiaries. “This is an issue with survey data,” Bundorf says. “People sometimes have a hard time answering questions about their insurance coverage correctly.”

No dramatic differences in enrollment across demographic groups occurred, according to the study. In states that had expanded Medicaid, coverage increases could be mostly seen in adults aged 27 to 50, and those increases were not driven by employer-sponsored coverage. Hispanics were the exception, where coverage increases were employer driven.

“In nonexpansion states, relatively few of the effects in subgroups were statistically significant, likely in part because of the relatively small size of the nonexpansion state population,” the study said. “Notable exceptions include statistically significant gains in any coverage among Black people, primarily in the form of employer-sponsored coverage. Among Hispanic people in nonexpansion states, in contrast, we found no evidence of an increase in any coverage but found that the stability in any coverage was the result of a shift away from employer-sponsored coverage that was offset by an increase in other sources of coverage.”

The researchers also looked ahead at how redetermination might play out. The study states that “many people currently enrolled in Medicaid, particularly in expansion states, might no longer qualify as a result of higher income from employment. Although some current Medicaid enrollees may have access to employer-sponsored coverage, it is unclear how many workers will have such access.”

Bundorf says that although there is a lot of work being done on the redetermination process, “I can’t point you to anything specific on state efforts to make people aware of their options.”

Spending Bill Extends Telehealth Coverage For HDHPs Through 2024

Spending bill extends telehealth coverage for HDHPs through 2024 |  BenefitsPRO

Source: BenefitsPRO, by Willa Hart

When the pandemic hit, many measures were implemented to make telehealth more accessible to patients, including a rule in the 2020 CARES Act which says companies could choose to offer telehealth coverage to employees insured under HSA-qualifying high-deductible health plans, even before their deductible was met. Originally intended to expire at the end of 2021, the policy was later extended through the end of 2022. Now, it’s been extended a second time, with the most recent government spending bill reinstating the provision through at least December 31, 2024, according to the Society of Human Resource Management.

The recent spending bill also authorized the continued use of telehealth for Medicare patients for two more years, SHRM reports.

“Pre-deductible coverage helps employees because it allows insurance providers to cover telehealth services without requiring a co-pay or deductible upfront,” comments SHRM chief of staff, head of public affairs, and corporate secretary Emily Dickens, in their coverage of the change. “Employers need the flexibility to design benefit plans that improve employees’ wellbeing and help retain top talent.”

 

According to the Kaiser Family Foundation, around 17% of companies who provide health insurance to employees offered HSA-qualifying HDHPs in 2021. HSA-qualifying HDHPs are particularly popular amongst companies with over 200 employees, more than half of whom offer these high-deductible plans, per KFF.

Likewise, as high deductible health plans are growing in popularity, so is telehealth. Nearly a quarter of all respondents to a 2021 government survey say they had used telehealth services within the last month, with Medicare and Medicaid users reporting even higher usage rates of 27.4% and 29.3% respectively.

But there are some concerns about telehealth services, including its accessibility: promoted by some as telehealth’s biggest virtue, ease of access has led others to worry about opportunities for fraud and spiking costs, according to Mercer.

Last Updated 01/25/2023

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