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

Scenarios and Results

As noted, state unemployment programs vary considerably in detail, so we developed a generalized approach to estimate the impact on family incomes.  Our key assumptions are:

• The family has one worker who loses her job at the end of March, 2020. We vary the family composition between a three- person family (two dependents) and a single worker.
• The worker was employed continuously during the year prior to layoff in a job eligible for unemployment benefits.
• The family only has the worker’s earnings, and the annualized earnings in 2020 prior to losing her job were slightly higher (3.5%) than earnings during the prior year base period (the period used in states to determine weekly benefits).
• The worker is employed the first 12 weeks in 2020 before being laid off, and begins receiving unemployment benefits the week of April 5^th. Later we discuss how results would differ in cases where the worker continues to be employed until later in the year.
• The state unemployment program provides weekly benefit equal to 50% of the base period earnings, subject to maximum weekly benefit amounts. We looked at three maximum benefit amounts ($620, $450, $275) roughly reflecting the variation across states. In addition, we assume laid off workers receive the new federal supplemental benefit of $600 per week from April 5 through the end of July (17 weeks).
• The state UI benefit period is 26 weeks. Although some states have shorter periods, a few have already extended their periods during the COVID-19 emergency; in some other states benefit periods may be extended in times of high unemployment.
• Medicaid eligibility is determined based on monthly income, which is calculated by multiplying the weekly state unemployment benefit by 4.3. This is compared to the 2020 poverty level (divided by 12) to determine the Medicaid poverty level for current monthly income.  The $600 weekly federal supplement is not included in the calculation for Medicaid eligibility. In states that have expanded Medicaid under the ACA, people are eligible with income up to 138% of the poverty level.  Wisconsin Medicaid covers low-income adults up to 100% FPL.  In most other non-expansion states, parents can get Medicaid if income is less than 50% FPL.¹
• Marketplace subsidies are determined based on annual income, which is calculated by adding income earned in 2020 while employed, state weekly UI benefits multiplied by 39 weeks (the CARES Act provides federal financing for states to expand their UI benefit period by up to 13 weeks), and the federal supplemental UI benefit of $600 per week multiplied by 17 weeks. This total is compared to the 2019 federal poverty level, which is used to determine eligibility for marketplace subsidies in 2020. People are eligible for ACA marketplace subsidies if income is from 100% to 400% of the poverty level.  This calculator can be used to estimate eligibility for and amount of marketplace subsidies.

We begin by looking at a moderate-income three-person family with $50,000 in annualized earnings prior to layoff. We then show how the results vary for a higher income ($100,000) and a lower income ($23,000) family and for two single workers, one with lower income ($15,000) and one with poverty-level income ($12,000).

In every scenario, access to new health coverage will depend on coverage status prior to layoff.  It will also depend on where people live.  State UI programs provide different benefit levels, income-eligibility for adults and children varies across State Medicaid programs, and in most state marketplaces, people can only enroll in coverage now if they are eligible for a SEP.

Moderate Income Family

This scenario illustrates changes in income and eligibility for health coverage for a moderate-income family – a single parent with 2 children – with pre-unemployment annual income of $50,000 for 2020.

This family would have just over $11,500 in earnings for the 12 weeks of work before the job loss. Under our scenario, the family would begin receiving state unemployment benefits for weeks beginning April 5^th of $465, subject to state maximum benefit limits. The family would also receive an additional 13 weeks of the state benefit amount (the federal extension) as well as an additional $600 per week for the weeks starting April 5^th and ending with the week beginning July 28 (17 weeks).  Overall, the federally-supplemented unemployment benefits plus the worker’s prior earnings equal between 65% and 80% of the family’s prior earning level. The results are summarized in Table 1.

Table 1: Moderate Income Three-Person Family
	$620 Max Benefit	$450 Max Benefit	$275 Max Benefit
Annualized Income Before Job Loss	$50,000 (234% FPL)	$50,000 (234% FPL)	$50,000 (234% FPL)
Weekly State UI benefit	$465	$450	$275
Federal Supplemental Weekly UI Benefit (stops at end of July)	$600	$600	$600
Monthly Income for Determining Medicaid or CHIP Eligibility (State UI Benefit only)	$2,000 (110% FPL)	$1,935 (107% FPL)	$1,182 (65% FPL)
Annual Income for Determining 2020 Marketplace Subsidies (Earnings + State and Federal UI Benefits)	$39,854 (187% FPL)	$39,288 (184% FPL)	$32,463 (152% FPL)

Access to Coverage

In this scenario, whether the moderate-income family lives in a state with high, moderate, or low state unemployment benefits, under Medicaid’s method of determining income, its new, reduced income would be less than 138% of FPL (and in very low UI benefit states, income could fall below the poverty level); while under the marketplace’s method of determining income, income would fall between 100% and 200% FPL.  This consistent result happens because the marketplace will always count the $600/week federal UI supplement and income earned earlier in the year, while Medicaid and CHIP will only consider state UI benefits earned in that month, which constitute half or less of the family’s pre-layoff earnings level.

Families Losing Job-Based Coverage.  At this new lower income, access to marketplace or Medicaid coverage for this family would vary across states:

• In 36 Medicaid expansion states and DC, the parent would become eligible for Medicaid.
• In non-expansion states, the parent generally would not qualify for Medicaid. Even if income falls to 65% FPL, it would still be too high to qualify under the pre-ACA eligibility pathway for parents in most non-expansion states.
• In 14 non-expansion states, the parent would be eligible for a special enrollment period in the marketplace coverage (due to loss of job-based coverage.) The parent would qualify for premium tax credits based on her new projected 2020 income, which would fall between 100% and 200% FPL in all states. The parent would also qualify for cost sharing subsidies delivered through CSR silver plans.
• Children in the family would be eligible for Medicaid or CHIP in every state, and would have been eligible in most states even pre-layoff.

Families with Marketplace Coverage When Employed.  Most marketplace participants today are self-employed or work in jobs that don’t offer them group health benefits.  Generally, people are eligible for marketplace subsidies if their 2020 family income is between 100% and 400% of the federal poverty level and if they are not eligible for other coverage, such as through an employer or Medicaid.  As a result, the laid-off mother in this scenario could have already been covered under a subsidized marketplace plan.

• In Medicaid expansion states, the mother would have earned too much to qualify for Medicaid while working, but once unemployed, would become eligible for Medicaid based on her new lower income.
• In most non-expansion states, the parent’s new lower income would not qualify for Medicaid even under the pre-ACA eligibility pathway for parents of dependent children because – even as low as 65% FPL – it would still be too high.
• In non-expansion states, her reduced income would make the mother eligible for higher premium tax credits, and she would now qualify for cost sharing subsidies. She would be eligible for a special enrollment period (SEP) of 60 days during which she could switch to a cost sharing reduction (CSR) plan with a lower deductible.  On average, silver plan deductibles in Healthcare.gov states are $4,544/person, but people with income 150%-200% FPL qualify for CSR plans with an average deductible of $762.
• Children in the family would be eligible for Medicaid or CHIP in every state, and even pre-layoff, children would have been eligible in most states.

Families Uninsured When Working.

• In Medicaid expansion states, the parent would become eligible for Medicaid and could enroll.
• In most non-expansion states, the parent’s new lower income would not qualify for Medicaid even under the pre-ACA eligibility pathway for parents of dependent children because – even as low as 65% FPL – it would still be too high.
• In non-expansion states, the already-uninsured parent would not be eligible for the coverage-loss SEP to enroll in marketplace coverage through Healthcare.gov.
• Children in this family would be eligible for Medicaid or CHIP in every state.

Higher Income Family

This scenario is the same as the previous one except that the pre-job loss annualized earnings for 2020 are increased to $100,000.

This family would have just under $23,100 in earnings for the 12 weeks of work before the job loss. Under our scenario, the family would begin receiving state unemployment benefits for weeks beginning April 5^th and would receive the maximum amount under all three iterations. The family would also receive an additional 13 weeks of the state benefit amount (the federal extension) as well as an additional $600 per week in federal supplemental UI benefits for the weeks starting April 5^th and ending with the week beginning July 28 (17 weeks).  Overall, the federally-supplemented unemployment benefits plus the worker’s prior earnings equal between 44% and 58% of the family’s prior earning level. The results are summarized in Table 2.

Table 2: Higher Income Three-Person Family
	$620 Max Benefit	$450 Max Benefit	$275 Max Benefit
Annualized Income Before Job Loss	$100,000 (469% FPL)	$100,000 (469% FPL)	$100,000 (469% FPL)
Weekly State UI benefit	$620	$450	$275
Federal Supplemental Weekly UI Benefit (stops at end of July)	$600	$600	$600
Monthly Income for Determining Medicaid or CHIP Eligibility (State UI Benefit only)	$2,666 (147% FPL)	$1,935 (107% FPL)	$1,182 (65% FPL)
Annual Income for Determining 2020 Marketplace Subsidies (Earnings + State and Federal UI Benefits)	$57,457 (269% FPL)	$50,827 (238% FPL)	$44,002 (206% FPL)

Access to Coverage

For higher income families, the income decline following layoff varies more depending on the state UI program benefits.  Considering only the state UI benefits, this family with a pre-layoff income of nearly 5 times the poverty level would see income fall dramatically, in some states to below the federal poverty level.  Adding in the federal supplemental UI benefits offsets income loss, however; the new post-layoff income falls between 2 and 3 times FPL.  Health coverage options will depend on where the family lives.

Families Losing Job-Based Coverage.  Access to marketplace or Medicaid coverage for this family would vary across states:

• In Medicaid expansion states, the mother would be eligible for Medicaid in the states with mid-range and low levels of maximum state UI benefits. Her monthly income would be too high to qualify for Medicaid in the state with the $620 weekly UI maximum benefit, but she would be eligible for a special enrollment period in the marketplace coverage (due to loss of job-based coverage) and could qualify for premium tax credits based on their new projected poverty level.
• In non-expansion states, the parent generally would not qualify for Medicaid even under the pre-ACA eligibility pathway for parents of dependent children; even if income fell to 65% FPL it would still be too high to qualify in most non-expansion states.
• In non-expansion states, the mother would be eligible for a special enrollment period in the marketplace coverage (due to loss of job-based coverage) and could qualify for premium tax credits based on their new projected poverty level.
• In all states, children in the family would become eligible for Medicaid or CHIP at this new lower household income.

Families with Marketplace Coverage When Employed. 

• In Medicaid expansion states, the mother would be eligible for Medicaid in states with lower maximum state UI benefits. Her monthly income would be too high to qualify for Medicaid in the state with the $620 weekly UI maximum benefit.
• In all states, the mother would be eligible for a different special enrollment period in the marketplace (due to loss of income, because she is already enrolled in a marketplace plan) and could qualify for premium tax credits based on the new projected poverty level.
• Children in this family would become newly eligible for Medicaid or CHIP in every state.

Families Uninsured When Working.

• In Medicaid expansion states, the mother would be eligible for Medicaid in states with lower maximum state UI benefits. Her monthly income would be too high to qualify for Medicaid in the state with the $620 weekly UI maximum benefit.
• In most non-expansion states, the mother would not qualify for Medicaid even under the pre-ACA eligibility pathway for parents of dependent children.
• In non-expansion states, all of which are also Healthcare.gov states, the mother would not be eligible for a special enrollment period in the marketplace.
• In all states, children in the family would become eligible for Medicaid or CHIP at this new lower household income.

Low Income Family

This scenario is the same as the previous ones except that the pre-job loss annualized earnings for 2020 are $23,000.

This family would have just under $5,308 in earnings for the 12 weeks of work before the job loss. Under our scenario, the family would begin receiving state unemployment benefits for weeks beginning April 5^th, and because pre-layoff wages were so low, we estimate state UI benefits would be $214 per week in each of the scenario states (assuming that UI replaces roughly 50% of wages).  The family would also receive an additional 13 weeks of the state benefit amount (the federal extension) as well as an additional $600 per week in federal supplemental UI benefits for the weeks starting April 5^th and ending with the week beginning July 28 (17 weeks).  Overall, the federally-supplemented unemployment benefits slightly increase income for this family.  The results are summarized in Table 3.

Table 3: Low Income Three-Person Family
	$620 Max Benefit	$450 Max Benefit	$275 Max Benefit
Annualized Income Before Job Loss	$23,000 (108% FPL)	$23,000 (108% FPL)	$23,000 (108% FPL)
Weekly State UI benefit	$214	$214	$214
Federal Supplemental Weekly UI Benefit (stops at end of July)	$600	$600	$600
Monthly Income for Determining Medicaid or CHIP Eligibility (State UI Benefit only)	$920 (51% FPL)	$920 (51% FPL)	$920 (51% FPL)
Annual Income for Determining 2020 Marketplace Subsidies (Earnings + State and Federal UI Benefits)	$23,841 (112% FPL)	$23,841 (112% FPL)	$23,841 (112% FPL)

Access to Coverage

Whether this family lives in a state with high, moderate, or low state unemployment benefits, state UI benefits would only reach about half of pre-layoff earnings in each illustrated state.  As a result, the family’s Medicaid income would fall to 51% FPL in each illustrated state.  The family would also receive the federal supplemental UI benefit for 17 weeks in every state, which would slightly increase the family’s income for the year, from 108% FPL pre-layoff to 112% FPL in each state.

Families Losing Job-Based Coverage.  With this income change, access to marketplace or Medicaid coverage for this family would vary across states:

• In 36 Medicaid expansion states and DC, the parent would have been eligible for Medicaid prior to layoff and would continue to be eligible.
• In most of the non-expansion states, the mother would not be eligible for Medicaid because her new unemployment income of 51% FPL would still be too high.
• In the 14 non-expansion states, the mother would be eligible for a special enrollment period in the marketplace (due to loss of job-based coverage.) The parent would qualify for premium tax credits based on her new 2020 income of 112% FPL. The national average premium after tax credits for the benchmark silver plan is $41 per month at this income.  The parent would also qualify for a cost sharing reduction (CSR) with a national average deductible of $209.
• Children in the family would be eligible for Medicaid or CHIP in every state, as they would have been prior to layoff.

Families with Marketplace Coverage When Employed.  Generally, people are eligible for marketplace subsidies if their 2020 family income is between 100% and 400% of the federal poverty level and if they are not eligible for other subsidized minimum essential coverage, such as Medicaid.

• In Medicaid expansion states, the parent would have been eligible for Medicaid, and so not enrolled in marketplace coverage.
• In non-expansion states, the mother would have qualified for marketplace subsidies prior to layoff. With her slightly increased income, the mother could update her marketplace application to reduce the monthly premium tax credit paid on her behalf; otherwise, she may have to repay some of the excess tax credit when she files her 2020 income tax return next year.
• Children in the family would be eligible for Medicaid or CHIP in every state, and were prior to layoff.

Families Uninsured When Working.

• In Medicaid expansion states, the parent would have been eligible for Medicaid prior to layoff and still would be post-layoff.
• In most non-expansion states, the parent would not be eligible for Medicaid, even at her new income of 51% FPL.
• In non-expansion states, the already-uninsured parent would not be eligible for an SEP to enroll in marketplace coverage through Healthcare.gov.
• Children in this family would be eligible for CHIP in every state.

Low Income Single Person

This scenario differs from the previous one, showing a single worker with no dependents and with pre-job loss annualized earnings for 2020 of $15,000.

This worker would have $3,462 in earnings for the 12 weeks of work before job loss. Under our scenario, he would begin receiving state unemployment benefits for weeks beginning April 5^th, and because pre-layoff wages were so low, we estimate state UI benefits would be $139 per week in each of the scenario states, far below any state maximum benefit.  This worker would also receive an additional 13 weeks of the state benefit amount (the federal extension) as well as an additional $600 per week in federal supplemental UI benefits for the weeks starting April 5^th and ending with the week beginning July 28 (17 weeks).  Overall, the federally-supplemented unemployment benefits plus the worker’s prior earnings would result in a higher income than her pre-layoff income. Results are summarized in Table 4.

Table 4: Low Income Single Person With No Dependents
	$620 Max Benefit	$450 Max Benefit	$275 Max Benefit
Annualized Income Before Job Loss	$15,000 (120% FPL)	$15,000 (120% FPL)	$15,000 (120% FPL)
Weekly State UI benefit	$139	$139	$139
Federal Supplemental Weekly UI Benefit (stops at end of July)	$600	$600	$600
Monthly Income for Determining Medicaid or CHIP Eligibility (State UI Benefit only)	$598 (56% FPL)	$598 (56% FPL)	$598 (56% FPL)
Annual Income for Determining 2020 Marketplace Subsidies (Earnings + State and Federal UI Benefits)	$19,096 (153% FPL)	$19,096 (153% FPL)	$19,096 (153% FPL)

Access to Coverage

No matter the level of state maximum UI benefits, state UI benefits for this low income worker are assumed to be $139 per week in each scenario state.  As a result, his Medicaid income would fall to 56% FPL in each state.  He would also receive the federal supplemental UI benefit of $600 per week through July, which would raise his annual income to just over $19,000 for 2020, or from 120% FPL to 153% FPL.

Worker Losing Job-Based Coverage.  With this income change, access to marketplace subsidies and Medicaid coverage for this worker would vary across states:

• In 36 Medicaid expansion states and DC, this worker would have been eligible for Medicaid prior to layoff and would continue to be eligible while unemployed.
• In non-expansion states, the worker would not be eligible for Medicaid, except in Wisconsin, the only state that covers childless adults with income up to 100% FPL.
• This worker would be eligible for a special enrollment period in the marketplace (due to loss of job-based coverage) and he would qualify for marketplace subsidies with annual income over 100% FPL. The national average premium after tax credits for the benchmark silver plan would be $68 per month at this income level. He would also qualify for a cost sharing reduction (CSR) plan with a national average deductible of $762.

Worker with Marketplace Coverage When Employed.  This worker’s income change could change his eligibility for Medicaid or marketplace subsidies, depending on where he lives.

• In Medicaid expansion states, he would have been eligible for Medicaid prior to layoff, and so not enrolled in marketplace coverage.
• In non-expansion states, the worker would have qualified for marketplace subsidies prior to layoff. However, with unemployment benefits significantly increasing his income, he is not eligible for the same amount of subsidy.  At pre-layoff income of level of 120% FPL, he would have had to pay $26/month for the benchmark plan.  At 153% FPL, his required premium contribution rises to $63 per month.  At the higher income level he also qualifies for a less generous CSR plan.  If he does not update his marketplace application, he may have to repay up to $300 in excess premium tax credit when he files his 2020 federal tax return.  He would not be required to repay excess CSR subsidy.

Uninsured Worker When Employed

• In Medicaid expansion states this worker have been eligible for Medicaid prior to layoff and still would be post-layoff.
• In non-expansion states other than Wisconsin, the worker would not be eligible for Medicaid.
• In non-expansion states, the already-uninsured worker would not be eligible for an SEP to enroll in marketplace coverage through Healthcare.gov.

Low Income Single Person Below Poverty

This scenario is the same as the previous one, depicting a single worker with no dependents except the pre-job loss annualized earnings for 2020 is $12,000.

This worker would have $2,769 in earnings for the 12 weeks of work before job loss. Under our scenario, she would begin receiving state unemployment benefits for weeks beginning April 5^th, and in this case, we estimate she would receive a minimum State UI benefit of $50 per week in each of the scenario states. (In half of states, the minimum weekly benefit is a lower amount, ranging from $5 to $45 per week).  This worker would also receive an additional 13 weeks of the state benefit amount (the federal extension) as well as an additional $600 per week in federal supplemental UI benefits for the weeks starting April 5^th and ending with the week beginning July 28 (17 weeks).  Again in this scenario, the temporary federal supplemental UI benefit can raise this worker’s annual earnings from just below to just above the federal poverty level.   Results are summarized in Table 5.

Table 5: Low Income Single Person Below Poverty With No Dependents
	$620 Max Benefit	$450 Max Benefit	$275 Max Benefit
Annualized Income Before Job Loss	$12,000 (96% FPL)	$12,000 (96% FPL)	$12,000 (96% FPL)
Weekly State UI benefit	$50	$50	$50
Federal Supplemental Weekly UI Benefit (stops at end of July)	$600	$600	$600
Monthly Income for Determining Medicaid or CHIP Eligibility (State UI Benefit only)	$215 (20% FPL)	$215 (20% FPL)	$215 (20% FPL)
Annual Income for Determining 2020 Marketplace Subsidies (Earnings + State and Federal UI Benefits)	$14,919 (119% FPL)	$14,919 (119% FPL)	$14,919 (119% FPL)

Worker Losing Job-Based Coverage.

• In 36 Medicaid expansion states and DC, this worker would have been eligible for Medicaid prior to layoff and would continue to be eligible while unemployed.
• In non-expansion states other than Wisconsin, the worker would not be eligible for Medicaid.
• In non-expansion states, he would be eligible for a special enrollment period in the marketplace (due to loss of job-based coverage.) With income of 119% FPL, he would qualify for premium and cost sharing subsidies.  The national average premium after tax credits for the benchmark silver plan would be $68 per month at this income level.  He would also qualify for a cost sharing reduction (CSR) plan with an average deductible of $762.

Worker with Marketplace Coverage When Employed. 

• In Medicaid expansion states, he would have been eligible for Medicaid prior to layoff, and so not enrolled in marketplace coverage.
• In non-expansion states, the worker would not have qualified for marketplace subsidies prior to layoff because his income was below the poverty level, so he probably would not have been enrolled.

Uninsured Worker When Employed

• In Medicaid expansion states this worker have been eligible for Medicaid prior to layoff and still would be post-layoff.
• In non-expansion states other than Wisconsin, the worker would not be eligible for Medicaid.
• In non-expansion states, the uninsured worker would be eligible for an SEP to enroll in marketplace coverage through Healthcare.gov. This is because his higher unemployment income lifts him out of the Medicaid coverage gap and makes him newly eligible for marketplace subsidies.

What Happens to People Laid Off Later This Year?

Our scenarios look at simplified cases where people were laid off at the end of March and then qualify for unemployment benefits for the remainder of the year. The federal extension and supplement payments authorized under the CARES Act also help people who may have lost their job earlier or later in 2020, but because the $600 supplemental payment is available only through July 31, people losing their jobs later in 2020 may lose some or all of that additional stimulus.  For example, a worker who was employed until the end of June would receive at most 4 weeks of the $600 federal supplement.

Some people who lose jobs with job-based coverage later 2020 may have difficulties gaining access to affordable coverage in states that have not expanded Medicaid.  While those with sufficient incomes may be able to afford coverage through COBRA or the marketplace, some with lower incomes would see their projected annual income fall below the poverty level, which would mean that they are not eligible for premium tax credits to help them afford marketplace coverage.

To illustrate, consider the low income family shown above in Scenario 3, a single mother with 2 children working in a job that pays $23,000 per year, If she is laid off at the end of June instead of at the end of March, her pre-layoff earnings would be $11,058.  Her weekly state UI benefits would be the same once she begins receiving them, but she would only receive the federal $600 weekly supplement for 4 weeks. As a result, her 2020 income including earnings plus state and federal supplemental UI benefits would fall to just over $19,000.  See Table 6.

Table 6: Low Income Three-Person Family, Job Loss in End of June
	$620 Max Benefit	$450 Max Benefit	$275 Max Benefit
Annualized Income Before Job Loss	$23,000 (108% FPL)	$23,000 (108% FPL)	$23,000 (108% FPL)
Weekly State UI benefit	$214	$214	$214
Federal Supplemental Weekly UI Benefit for 4 weeks (stops at end of July, )	$600	$600	$600
Monthly Income for Determining Medicaid or CHIP Eligibility (State UI Benefit only)	$920 (51% FPL)	$920 (51% FPL)	$920 (51% FPL)
Annual Income for Determining 2020 Marketplace Subsidies (Earnings + State and Federal UI Benefits)	$19,013 (89% FPL)	$19,013 (89% FPL)	$19,013 (89% FPL)

Access to Coverage

As we showed in an earlier scenario, this low income family would experience substantial income loss following layoff that occurs later in the year.  Throughout the year, Medicaid would consider only state UI benefits for this family and determine monthly income to be at 51% FPL.  With a layoff in late June, however, this family would only benefit from the supplemental federal UI benefit of $600/week for 4 weeks.  So total 2020 income would fall to 89% FPL.

Families Losing Job-Based Coverage.

• In 36 Medicaid expansion states and DC, the parent would have been eligible for Medicaid prior to layoff and continue to be eligible.
• In most of the 14 non-expansion states, the mother would not qualify for Medicaid under the pre-ACA eligibility pathway for parents of dependent children because, at 51% FPL, her income would still be too high.
• In non-expansion states, the mother would be eligible for a special enrollment period in the marketplace (due to loss of job-based coverage) but with estimated annual income of 89% FPL, she would not qualify for marketplace subsidies.
• Children in the family would be eligible for Medicaid or CHIP in every state, as they would have been prior to layoff.

Families with Marketplace Coverage When Employed. 

• In Medicaid expansion states, the entire family would have been eligible for Medicaid, and so not enrolled in marketplace coverage.
• In non-expansion states, the mother would have qualified for marketplace subsidies prior to layoff. Even though her projected annual income has fallen mid-year and will end up below poverty level, she can remain in her already-subsidized marketplace plan, and when she files her 2020 federal tax return next year, can claim additional credit that will be refunded to her.  This is an exception to the general rule that requires people receiving premium tax credit during the year are ineligible for credits if their income rises above 400% FPL, and must repay the entire amount of premium tax credit they received.
• Children in the family would be eligible for Medicaid or CHIP in every state, and were prior to layoff.

Uninsured Families When Employed.

• Families in Medicaid expansion states would have been eligible for Medicaid prior to layoff and still would be post-layoff.
• In non-expansion states, the already-uninsured parent would not be eligible for an SEP to enroll in marketplace coverage through Healthcare.gov.
• In most non-expansion states, the parent would not be eligible for Medicaid.
• Children in this family would be eligible for Medicaid or CHIP in every state.

Other Issues

These simplified scenarios do not show all of the possible variations across state unemployment insurance programs.   The maximum UI benefit in a given state may be higher or lower than amounts shown in our scenarios.  Our scenarios assume workers will be eligible for 26 weeks of regular state UI benefits; however in some states the benefit period is shorter.  Unemployed people whose prior work history was shorter than 12 months may qualify for lower state UI benefits than shown in these scenarios, or not qualify at all,

In addition, not all workers who lose their jobs will receive unemployment benefits.  State unemployment offices reportedly have been overwhelmed by the high volume of recent applications, and this could delay or deter some people from applying.

Further, people who lose eligibility for one source of health coverage may not be aware of alternative coverage sources or how to apply.  People whose eligibility shifts between Medicaid and marketplace subsidies may find the application process especially challenging for several reasons, including that these two programs treat new federal supplemental UI benefits differently in determining income eligibility.  Immigrants may also face challenges as their eligibility for Medicaid and CHIP and marketplace coverage and subsidies may be different than for citizens.

Finally, in Healthcare.gov states, funding for navigator enrollment assistance for the 2020 plan year was cut by more than 80% on average.  Navigators play a key role in helping consumers apply for marketplace plans as well as Medicaid.  Consumers who need help applying for new coverage or a change in financial assistance may have difficulty finding it, particularly in counties where no federal navigator funding was made available.

Discussion

Job loss during the coronavirus crisis can trigger substantial changes in income as well as loss of health insurance coverage.  The ACA greatly expanded coverage options for people losing coverage today.  Expanded Medicaid eligibility in most states will be newly available to many laid-off adults.  Medicaid is open for enrollment year round.  With few exceptions it does not charge monthly premiums and requires only modest copays for covered services.

ACA reforms in the non-group market make this coverage option available to many more people as well.  Applicants will not be denied or charged higher premiums based on health status and all plans must cover essential benefits.  The marketplace also subsidizes plans for people with income between 100% and 400% FPL.  As job loss reduces family incomes, marketplace subsidies will make coverage more affordable than it would have been prior to the ACA.

The temporary $600/week federal supplement to state UI benefits, enacted in the CARES Act, can help lift some very low income workers out of the Medicaid coverage gap, and make them newly eligible for marketplace subsidies.   Workers who are laid off closer to or after July, when temporary federal UI benefits stop, may not be helped in this way.

However, the $600/week UI supplement could create new challenges for others.  Low-wage workers who already had subsidized marketplace coverage prior to layoff, and whose income increases even somewhat during unemployment, should adjust their monthly premium tax credit; otherwise, they could be required to repay excess premium tax credit next year.

These scenarios illustrate not only the different outcomes and options people may face, but the challenge they may also face in identifying the coverage option for which they are eligible and correctly completing an application within any applicable deadlines.