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MacroMonitor Market Trends Newsletter June 2020

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Trends in Healthcare Insurance Coverage

Decade-long trends (2008–2018) of various types of health-insurance show the proportion of uninsured households remains unchanged, and two dramatic shifts in household coverage.

  • First is a decrease from 38% to 26% in the proportion of households that have group healthcare (HC) insurance only. Group insurance is tied to employment. In the past decade, "employer health insurance costs have outpaced average growth in median income" reports The Commonwealth Fund. To illustrate, in 2018, middle-income workers spent roughly 7% of their income on employer-premium contributions. Depending on their state of residence, the cost of a single-person group HC plan ranged from $5,971 in Tennessee to $22,294 in New Jersey. For an increasing number of employees (in particular those with families) the cost has become unaffordable.
  • Second, there is an increase in the proportion of households with any individual HC insurance; the decade saw all households with any individual healthcare coverage increase from 16% to 34%. The Affordable Care Act (ACA), passed in 2010, provides individual HC insurance to Americans not covered by (or unable to afford) employer-sponsored group plans, nor government-sponsored plans such as Medicare and Medicaid insurance.
Trend: Healthcare Insurance Coverage by Type

At the beginning of June 2020—including job losses due to the COVID-19 lockdown—the majority of US workers (150 million) received healthcare coverage through an employee-sponsored (group) plan. By mid-May, 36.5 million adults filed for unemployment benefits. Because our healthcare system is typically tied to work status, "Millions of workers have likely already lost their employer-provided health insurance," says the director of The Economic Policy Institute. Up to forty-three million Americans are projected to be at risk of losing their health insurance in the coming months. Research from The Robert Wood Johnson Foundation (the largest US philanthropy focused exclusively on health) supports this estimate; the "near-term forecast suggests the unemployment rate will be between 15 and 20 percent by June." Of that number, a projected 12.1 million former employees will be ineligible for Medicaid or insurance through the Affordable Care Act (ACA).

The COVID-19 Pandemic illuminates many of the gaps and inequities in the US—not just in healthcare and healthcare insurance. Unemployment will continue to increase. Some basic household expenses will increase as supply chains are strained to supply essential goods, and lack of disposable income to purchase non-essentials becomes more pronounced. For example, the cost of food is already on the rise due to farmers' inability to get goods to market and processing-plant closures. One result, the majority of households will become more price conscious when making difficult budgeting choices for essential goods and services. As a result, some financial-service sectors will suffer more than others. Change is inevitable!

To learn about households most at risk of losing their HC coverage due to COVID-19, please contact us today!

IMPORTANT NOTE: The 2020–21 MacroMonitor will go to field this summer. Due to timing, in addition to providing a comprehensive view of US household finances, the 2020–21 survey will chronicle how different types of households are coping with their finances during these difficult times.