When people lose jobs during the pandemic, they can also lose their job-based health insurance. That leads to dwindling funding for hospitals and health care providers, which can trigger a double whammy of even more job losses in the already-strained health care industry.
Michigan is projected to see anywhere between 49,000 and 82,000 job losses in the health care sector because medical facilities and programs are receiving less revenue, according to a new report.
Those who have lost their jobs can find out more information about Medicaid and other types of low-income health insurance at HealthCare.gov.
A high, steady unemployment rate will result in more people being uninsured, according to an August report from Families USA, a Washington, D.C.-based progressive organization. It found a national unemployment rate that hovers around 15% could prompt layoffs of health care staff and cause some medical facilities to close. The national rate for July was 10.2%.
If that’s confusing, a Michigan health policy analyst broke it down like this: As the uninsured rate goes up because of pandemic-caused job losses, that means less money for health care facilities, like hospitals or doctors’ offices. When those places bring in less money, they are less able to pay their workers.
“The simplest way to capture what that particular report is trying to say is that people have lost health care coverage,” said Amber Bellazaire, a health policy analyst with the Michigan League for Public Policy (MLPP). “Now, that is happening for a few reasons — namely because people are losing jobs.”
Jobless rates spiked after various economic sectors were shuttered to prevent the spread of COVID-19. In April, for instance, Michigan’s rate leapt to about 24%, its highest since at least 1976, when rates started to be recorded.
“If they, as many Americans do, get their health insurance coverage through their job — if they’ve lost their job or if they’re furloughed, they may not have access to that coverage any longer,” Bellazaire said.
Texas, California and Florida are the top three states that could see the most fallout: 362,000, 331,000 and 209,000 job losses, respectively, according to the report. Michigan would be ninth in the nation if it reaches that high-end range projection of 82,000 jobs eliminated.
Major state budget crises are also causing some states to weigh cutting funding to Medicaid and other health programs. State lawmakers struggling to patch holes in budgets already macerated by the pandemic are running out of options to avoid such cuts.
The CARES Act passed in March by Congress does allow for qualified health care service and support providers to draw from a $175 billion relief fund for pandemic expenses and lost revenue. At the moment, Congress hasn’t passed further federal relief legislation to handle local and state-level budget repercussions from health insurance losses.
Unless the federal government intervenes, Medicaid — which 5 million essential and frontline workers rely on for health coverage — could see its funding slashed, according to a Aug. 4 report from the Center on Budget and Policy Priorities, a D.C.-based progressive think tank. Almost 1.8 million of those individuals work in health care services.
Close to 750,000 Michiganders are enrolled in Healthy Michigan, the state’s expanded Medicaid program, as of mid-2020. Prior to the pandemic, that number stood at 650,000. About 180,400 of the state’s essential and frontline workers are enrolled in Medicaid, according to the center’s report.
State Budget Director Chris Kolb said last month that Michigan’s stunted revenue means funding slashes to schools, public safety and health care programs like Medicaid are inevitable in future fiscal years. Next year’s state budget is facing a shortfall of about $3 billion.
Last year, Michigan’s spending on health and human services was $25.6 billion. Medicaid accounts for a majority of that spending, according to the state.
“We don’t want to see additional barriers to getting Medicaid coverage because the state is struggling with revenue,” Bellazaire said.