COVID-19 Could Lead To 1.3 Million In Oregon On Medicaid, Study Says


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Depending on the severity of the economic crisis induced by coronavirus, as many as 430,000 Oregonians could lose their employer-sponsored health plans in coming months, and most of those people – 320,000 – would turn to the Oregon Health Plan, the state’s version of Medicaid for low-income residents, a new report forecasts.

That dire scenario involves the state being swept by massive layoffs pushing the jobless rate to 25%, according to an analysis by Health Management Associates, a consulting firm focused on health care.

Even under the most benign of three scenarios in the  report - the Oregon jobless rate would rise to 10% from its current 3.3% -  some 145,000 people would lose their employer-sponsored health coverage. The report estimates about 149,000 people would sign up for Medicaid under that scenario.

Even in that moderate economic-impact scenario, the increased financial pressure on the Oregon Health Plan would be huge. The state, using federal and state money, spends about $6,000 a year insuring each of its 1 million Oregon Health Plan members. An extra 149,000 members could cost the government about $900 million a year. An extra 320,000 members would cost $1.9 billion a year.

The study’s release came on the heels of an analysis by The Lund Report on the impact job losses are likely to have on the Oregon Health Plan in Oregon, which now serves one in four residents.

The study by Health Management Associates, based in Michigan with an office in Portland, looks at the impact on rising unemployment on Medicaid in Oregon and every other state. It appears to be the first publicly released study with a state-by-state analysis of what Medicaid programs in each state could face.

The study projects that, depending on the extent of layoffs, nationwide 11.7 million to 35 million people would lose their employer-sponsored health insurance and 10.6 million to 23 million people would be added to the Medicaid rolls.

“What we’re experiencing is unprecedented,” said Jay Rosen, founder and president of the consulting firm. "With millions of Americans expected to enroll in Medicaid in the coming months, our COVID-19 impact estimates at the state level are critical for policymakers trying to begin the complex steps of implementing new laws and policies while navigating an array of financial implications."

Medicaid, largely funded by the federal government, is run differently in each state.

It’s unclear whether or how federal and state governments would step up to pay the cost of the vastly increased demand for the government-provided health care insurance. In Oregon, the federal government pays about 75% of the roughly $6 billion annual tab for the Oregon Health Plan. The state picks up the rest.

Oregon is a so-called Affordable Care Act expansion state. That means that in 2014 it expanded the Oregon Health Plan to cover a larger number of people, by raising the income levels allowed for members. Non-expansion states continued to restrict Medicaid to the very poor.

“We expect that as a Medicaid expansion state, many of the Oregonians filing initial unemployment claims will become eligible for Medicaid,” Nora Leibowitz, a principal with firm’s Portland office told The Lund Report. In the past two weeks, 168,500 Oregonians have filed for unemployment benefit claims. In a typical week, just 5,000 Oregonians file.

In states that did not expand their Medicaid income eligibility, many of those losing their jobs and getting unemployment benefits would not qualify for Medicaid and would either go uninsured or would have to buy their own health insurance coverage, the study said.

The Oregon Health Authority, which runs the Oregon Health Plan, did not have an immediate comment on the study.

The study looked at three economic scenarios: a 10% unemployment rate, a 17.5% rate and a 25% rate. The pre-COVID-19 national rate was 3%.

The study projects how the increased joblessness would boost the numbers covered by Medicaid; change the number of people who buy insurance individually through a federal or state-run marketplace; cut the number of people on employer-sponsored plans; and increase the number of uninsured.

In Oregon, under the 10% unemployment scenario, the vast majority of those who lost their jobs would switch to getting Medicaid, the study found. At a 17.5% unemployment rate, 286,000 people would lose their employer-sponsored coverage, 232,000 would join Medicaid, 22,000 newly unemployed would buy marketplace insurance and 33,000 newly unemployed would go uninsured, the study found.

At 25% unemployment, 430,000 Oregonians would lose employer-sponsored insurance, of whom 320,000 would join Medicaid, 31,000 would buy insurance via the marketplace and 78,000 would go without insurance.

The federal government in an act Congress passed in mid-March, offered some extra temporary money to state Medicaid plans. For Oregon, that extra help might amount to $250 million a year.

In states that did not raise the income limits for Medicaid in 2014, millions of newly unemployed would end up uninsured, the study forecast. In Texas, for example, under the 10% unemployment scenario, 972,000 people would lose employer-sponsored health insurance, of whom 716,000 would be eligible for Medicaid. But a whopping 243,000 would not be eligible and would go uninsured, the study predicted. In the 17.5% unemployment scenario, the number of Texas uninsured would increase by nearly 800,000, the study projected.

Lower- and moderate-income people are the most likely to lose their jobs and their employer-sponsored health insurance in the virus-induced recession, the study said.

“We estimate the economic impact to the labor market could disproportionately affect the roughly 58 million non-elderly individuals who have employer sponsored coverage and who earn less than $50,000 annually,” the report said.

 You can reach Christian Wihtol at [email protected].

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