Key findings:

  • Current unemployment rates could leave 5.1 million to 9.8 million Americans uninsured.
  • Top 10 states with the highest projected numbers of uninsured are non-expansion Medicaid states.
  • Uninsured health care costs could amount to $40 billion or 40% of the designated hospital budget under the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The U.S. Bureau of Labor Statistics announced an unemployment rate of 14.7% for April — a sharp increase of 10% from March levels. With millions of Americans losing their jobs and fearing getting sick with COVID-19, employer-sponsored health insurance is also being lost, and the additional fear of not having health insurance is another mounting worry for many. People filing for unemployment will typically seek health insurance options through Medicaid or health care marketplace plans. Unfortunately, for many unemployed people, the costs of marketplace plans or continuing coverage with COBRA is too expensive with unemployment budgets. Medicaid will be the primary option for the majority of unemployed people. Medicaid is an income-based benefit, which could keep a significant number of people from qualifying and leave them uninsured.

Study methodology

We here at QuoteWizard sought to find the real impact of uninsured rates as unemployment continues to rise during the COVID-19 outbreak. We analyzed Health Management Associates data that looked at uninsured rates under three unemployment scenarios. The data estimates the number of people who will lose employer-sponsored health insurance, who will qualify for Medicaid and who will go uninsured. The estimated number of people in each category is based on unemployment scenarios: low levels of unemployment at 10%, medium levels of unemployment at 17.5% and high levels of unemployment at 25%. Given the current unemployment rate of 14.7%, we’re already near a medium-to-high scenario of 17.5% to 25%. In the medium-to-high unemployment scenario, 5.1 million to 9.8 million Americans could be left uninsured after losing employer-sponsored health insurance. Rankings are based on the total number of potentially uninsured people in each state in a low unemployment scenario.  

Unemployment scenarios and uninsured rates

The unfortunate reality of these unemployment scenarios is that those who are left uninsured are those who are not able to qualify for Medicaid. What’s more is Medicaid eligibility in certain states will mean a higher number of uninsured people in different parts of the country. States that did not participate in Medicaid expansion will be hit hardest with uninsured people. Medicaid expansion allows for people to qualify at 138% of the federal poverty line, whereas non-expansion states are typically right at the poverty line.

We found that the top 10 states with the highest numbers of projected uninsured are all non-expansion states. The data suggests there is a correlation between the uninsured and Medicaid eligibility. When only a certain population qualifies for Medicaid and unemployment rises, so does the number of uninsured. The difference between the low 10% scenario and the medium 17.5% scenario accounts for a 55% growth in Medicaid enrollment, while the difference in people losing employer-sponsored coverage is over 98%. The wide gap in the rate of people being eligible for medicaid and the rate of people losing employer-sponsored coverage will cause the uninsured rate to grow exponentially. From a low-to-medium scenario, the number of uninsured goes from 715,000 on the low end up to 5.1 million on the medium end — a growth rate of 625%.

We see in a state like California, which is a Medicaid expansion state, in a low 10% unemployment scenario, there’s enough eligibility for Medicaid to cover the number of people losing employer health insurance. Moving up into the medium 17.5% unemployment scenario, California will start to see the gap in Medicaid eligibility close off and the number of uninsured increase to 179,000. Many of the Medicaid expansion states will be able to have positive gaps in Medicaid eligibility. However, once unemployment exceeds the 17.5% scenario, nearly all states will see their eligibility gaps close and their uninsured numbers grow.

The millions of newly uninsured people will create an economic burden on the health care system. The millions of uninsured people will still receive health care, but the debt burden is left with hospitals and health care services. Congress did enact the CARES Act that designates $100 billion in funding for hospitals and other health care services. Kaiser Family Foundation estimates that health care costs for treating uninsured people could amount to $40 billion. Such a significant portion of the relief funds going towards covering the uninsured could leave other entities of the bill under funded. There’s also the long-term impact of high uninsured rates that lead to an increase in the cost of health care.

     
Low Unemployment Scenario
Medium Unemployment Scenario
Rank State Uninsured Rate Low Medicaid Low Employer Insurance Low Uninsured Med Medicaid Med Employer Insurance Med Uninsured
1 Texas 18% 716,000 -972,000 243,000 1,089,000 -1,952,000 784,000
2 Florida 13% 513,000 -646,000 177,000 778,000 -1,315,000 589,000
3 Georgia 14% 265,000 -374,000 101,000 406,000 -753,000 312,000
4 North Carolina 11% 273,000 -370,000 98,000 411,000 -744,000 311,000
5 Missouri 9% 153,000 -243,000 82,000 244,000 -491,000 222,000
6 Wisconsin 6% 151,000 -239,000 77,000 234,000 -476,000 212,000
7 Tennessee 10% 188,000 -241,000 56,000 277,000 -485,000 195,000
8 Alabama 10% 132,000 -180,000 47,000 200,000 -363,000 151,000
9 Kansas 9% 75,000 -123,000 45,000 122,000 -248,000 116,000
10 South Carolina 10% 136,000 -179,000 44,000 204,000 -360,000 148,000
11 Virginia 9% 258,000 -316,000 37,000 448,000 -636,000 132,000
12 Utah 9% 121,000 -160,000 33,000 224,000 -326,000 86,000
13 Mississippi 12% 87,000 -107,000 21,000 127,000 -216,000 82,000
14 South Dakota 9% 22,000 -35,000 14,000 35,000 -71,000 36,000
15 Indiana 8% 241,000 -273,000 12,000 401,000 -549,000 92,000
16 New Jersey 7% 279,000 -320,000 10,000 454,000 -634,000 101,000
17 Nebraska 8% 66,000 -81,000 10,000 115,000 -163,000 35,000
18 Wyoming 11% 13,000 -25,000 10,000 22,000 -50,000 25,000
19 Minnesota 4% 195,000 -222,000 8,000 317,000 -438,000 74,000
20 Pennsylvania 6% 459,000 -493,000 6,000 737,000 -974,000 150,000
21 Illinois 7% 452,000 -487,000 5,000 729,000 -966,000 149,000
22 Idaho 11% 64,000 -69,000 5,000 109,000 -140,000 27,000
23 New Hampshire 5% 43,000 -54,000 5,000 73,000 -108,000 21,000
24 North Dakota 8% 23,000 -30,000 5,000 41,000 -61,000 14,000
25 Iowa 5% 115,000 -128,000 4,000 187,000 -255,000 42,000
26 Maine 8% 41,000 -45,000 2,000 69,000 -91,000 15,000
27 Oklahoma 14% 135,000 -141,000 1,000 223,000 -286,000 42,000
28 Hawaii 4% 44,000 -51,000 1,000 72,000 -102,000 16,000
29 Maryland 6% 197,000 -215,000 0 312,000 -421,000 61,000
30 Colorado 8% 193,000 -204,000 0 309,000 -402,000 60,000
31 Vermont 4% 24,000 -24,000 0 37,000 -46,000 7,000
32 Connecticut 5% 124,000 -130,000 -1,000 194,000 -253,000 36,000
33 Rhode Island 4% 38,000 -39,000 -1,000 60,000 -77,000 11,000
34 Montana 8% 39,000 -37,000 -1,000 61,000 -74,000 10,000
35 Delaware 6% 35,000 -36,000 -1,000 55,000 -71,000 9,000
36 Alaska 12% 26,000 -25,000 -1,000 39,000 -49,000 6,000
37 Nevada 11% 100,000 -104,000 -4,000 160,000 -210,000 25,000
38 Ohio 6% 425,000 -450,000 -5,000 679,000 -890,000 124,000
39 Michigan 5% 377,000 -389,000 -6,000 599,000 -774,000 110,000
40 Massachusetts 3% 251,000 -256,000 -6,000 387,000 -497,000 70,000
41 West Virginia 6% 69,000 -65,000 -7,000 105,000 -128,000 11,000
42 Oregon 7% 149,000 -145,000 -9,000 232,000 -286,000 33,000
43 Washington 7% 256,000 -259,000 -15,000 395,000 -509,000 58,000
44 Arkansas 8% 114,000 -99,000 -16,000 171,000 -196,000 12,000
45 Kentucky 6% 173,000 -162,000 -18,000 264,000 -320,000 29,000
46 New Mexico 9% 85,000 -62,000 -20,000 118,000 -119,000 -4,000
47 Arizona 11% 250,000 -235,000 -21,000 386,000 -467,000 45,000
48 Louisiana 8% 184,000 -150,000 -33,000 269,000 -295,000 10,000
49 New York 5% 719,000 -658,000 -83,000 1,068,000 -1,274,000 103,000
50 California 7% 1,484,000 -1,301,000 -196,000 2,211,000 -2,555,000 179,000