In Iowa, almost two-thirds (64 percent) of the nonelderly population rely on employment-based health insurance. As Iowa’s unemployment rate climbs towards numbers not seen since the Great Depression of the 1930s, we are shedding health coverage — in the midst of a sustained public health crisis — almost as fast as we are shedding jobs.
Even in good times, our crazy patchwork of health coverage — job-based care for most, Medicare for the elderly, Medicaid for low-income families, the ACA “marketplace” for others, and no coverage at all for the rest — is an engine of inequality. The better the job, as a rule, the better the health coverage. And in bad times, that coverage can easily disappear. Our reliance on job-based coverage, as one health policy expert famously put it, is like an umbrella that melts in the rain.
By one estimate (through May 14), about half of the 300,000 Iowans who lost their jobs in the COVID-19 recession also lost their health insurance. And this is a conservative estimate, as it does not count family members who might have relied on the same coverage and it is based only on those who lost their jobs and filed an unemployment claim.
These workers have some options — although the interruption of coverage alone is a frightening prospect in these troubled times. A lucky few might be able to pick up coverage through another family member who remains employed (and insured). Those losing job-based coverage have the “COBRA” option of continuing coverage by paying the full premiums themselves. But this is a costly option (the annual premium for job-based family coverage in Iowa is over $18,000) that few can afford.
Most displaced workers will turn to public programs. Iowa’s Medicaid program offers coverage to adults earning less than 138 percent of the federal poverty level ($16,791 for an individual, $28,888 for a family of three), and Medicaid and CHIP cover children in families with incomes up to 302 percent of the federal poverty level ($65,594 for a family of three). Unemployment benefits count towards this threshold, but the supplemental $600/week in Pandemic Unemployment Compensation (available through the end of July) does not.
Those whose family incomes fall above the Medicaid or CHIP thresholds have the last option of the Affordable Care Act “marketplace” insurance. Iowa’s health insurance exchange is a “federally facilitated” marketplace, which means it cannot allow open enrollment outside the conventional enrollment window in November.
But loss of a job (and job-based insurance) does qualify for off-cycle enrollment, and the premium assistance available for those purchasing at least a bronze plan on the exchange can substantially reduce costs for those with income under three to four times the poverty level. But here again there is a catch: Unemployment benefits count as income in determining both eligibility for ACA assistance and the amount of the assistance.
All this underscores the inequity and inefficiency of our job-based health care system. It is uneven and unreliable. And it fails at its most elemental goal: to protect working Iowans from risks that are beyond their control.
Colin Gordon is senior research consultant for the nonpartisan Iowa Policy Project (IPP) and a professor of history at the University of Iowa. He has led IPP’s State of Working Iowa analyses since 2001, and is author of Dead on Arrival: The Politics of Health Care in Twentieth Century America, and Citizen Brown: Race, Democracy, and Inequality in the St. Louis Suburbs.