Changes in Income and Health Coverage Eligibility After Job Loss Due to COVID-19

The recently enacted CARES Act provides much needed help to the unemployed by increasing and supplementing state unemployment benefits with federal funds. In particular, the Act provides a $600 weekly federal supplement (available through July 31) to state unemployment benefits and extends the period for receiving unemployment benefits by up to 13 weeks. The Act also extends benefits to many types of workers (e.g., self-employed) not currently eligible for unemployment benefits under state laws.

The amounts available under the Act have a meaningful impact on family income and affect potential eligibility for premium tax credits for Affordable Care Act (ACA) marketplace coverage and for Medicaid. Unemployment benefits generally are considered income in determining eligibility for these programs. However, under the CARES Act, the $600 federal supplement is considered income for determining eligibility for premium tax credits for marketplace coverage but is not counted as income for determining Medicaid eligibility.  The federal Recovery Rebate of $1,200 per adult is not counted as income in determining eligibility for either program.

State unemployment programs vary in many ways; particularly important are differences in the maximum weekly benefits available and in the length of benefit period. We developed a simplified set of scenarios to look generally at how unemployment benefits, as supplemented by the Cares Act, affect family income and eligibility for premium tax credits for marketplace coverage and Medicaid.  These scenarios provide examples for families at different income levels, and we look at the impact of different state benefit levels. We address several coverage situations for families where a worker has recently become unemployed:

• Families that lost workplace health coverage when a worker lost their job
• Families that currently have marketplace coverage but experience a change in income
• Families that are currently uninsured

Access to health benefits will vary for some of these families depending on where they live – in particular, whether their state has expanded Medicaid to include all low-income people under the ACA, and whether their marketplace is state-administered or uses Healthcare.gov.  Nearly all state-based marketplaces have re-opened Open Enrollment to make it easier for any resident, including the uninsured, to sign up for coverage during the COVID-19 crisis. (Many of these states describe this period as a COVID-19 Special Enrollment Period.)  The Trump administration has authority to offer an open enrollment period in the federal marketplace for people who were already uninsured, but has not done so. Instead, in Healthcare.gov states, people are eligible to enroll in coverage only if they qualify for a special enrollment period (SEP).  Two qualifying events can trigger an SEP in these scenarios: (1) loss of prior job-based coverage, and (2) being uninsured and living in a non-expansion state and having a change in income from below poverty (i.e., the coverage gap) to above poverty.  Other mid-year income changes that make people newly eligible for marketplace subsidies only trigger an SEP if the person is already enrolled in a marketplace plan. (There are other SEPs that may be available for people experiencing other life events, but they are not triggered in these scenarios.)  Medicaid is open for enrollment year round.