Some Workers Face Looming Cutoffs in Health Insurance

Coverage is a major expense for employers, especially those in small businesses, as they deal with the pandemic’s economic fallout. Many may face end-of-year renewal deadlines that are harder and harder to afford.

Jeremy Fritz of San Diego was furloughed when the gym he worked at closed. Losing coverage during the pandemic has been like “going into this thunderstorm without an umbrella,” he said. Credit…John Francis Peters for The New York Times

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By Reed Abelson

Jeremy Fritz stopped working as an assistant manager for a fitness center in Carlsbad, Calif., during the pandemic lockdown in the spring when gyms were first closed.

By the end of April, the company operating the fitness center, Active Wellness, eliminated his health insurance. And in July, he was laid off when it became clear the center where he worked would be closed through 2020. Most of the small company’s gyms are still shuttered.

Losing coverage in the middle of the coronavirus crisis, as millions of other Americans have, was like “going into this thunderstorm without an umbrella,” Mr. Fritz recalled. Active Wellness put him in touch with an insurance broker, which helped him and his husband sign up for a plan under the Affordable Care Act.

For people like Mr. Fritz, as well as those who qualify for Medicaid under the law, “there is still a safety net that wasn’t there 10 years ago,” said Sara R. Collins, a vice president at the Commonwealth Fund.

But that net is already fraying, with thousands of small businesses that had always expressed difficulty in providing employee health insurance under Obamacare now in far worse trouble because of the pandemic.

Hopes have also dimmed for another federal aid package before the presidential election.

Not only are businesses shedding workers, with the nation’s unemployed numbering roughly 13.6 million, but employers are also cutting expenses like health coverage, and projections of rising numbers of uninsured have grown bleak.

Tens of millions of people could lose their job-based insurance by the end of the year, said Stan Dorn, the director of the National Center for Coverage Innovation at Families USA, the Washington, D.C., consumer group. “The odds are we are on track to have the largest coverage losses in our history,” he said.

While estimates vary, a recent Urban Institute analysis of census data says at least three million Americans have already lost job-based coverage, and a separate analysis from Avalere Health predicts some 12 million will lose it by the end of this year. Both studies highlight the disproportionate effect on Black and Hispanic workers.

“There is this expectation that we are going to see big losses in employer-based coverage,” Ms. Collins said.

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