The Progressive

Losing Your Health Care To COVID-19

The pandemic has forced workers off of employer-sponsored plans and into the unknown.

The Progressive — December 21, 2020

By Sharon Johnson

For more than forty-five years, Shirley Smith has been a dedicated member of the workforce. A can-do woman, she helped customers select furniture and trained legions of salespeople at Art Van in Taylor, Michigan. Steady paychecks enabled her to support her son, buy a home, and manage her diabetes.

But in March, Smith's world collapsed when the retailer, where she had worked for twenty-three years, announced that it was going out of business.

"I was frantic," recalls Smith in a phone interview. "Jobs aren't easy to come by in the Detroit area, which has battled unemployment for decades. But the worst blow was the imminent loss of health insurance."

Like many people with diabetes, sixty-year-old Smith depends on insulin and other medications to prevent heart attacks, strokes, and kidney failure. Diabetes ravages eyes and limbs, so she requires regular check-ups with physicians.

"Art Van had an outstanding medical plan that covered my medications, one of which costs $1,500 for thirty pills," she says. "As a result, my out-of-pocket costs for medical care totaled only $80 to $90 a month."

Smith realized that she might die without her medications, so she called her physician, who provided some free samples. Her cataract surgery was postponed because Smith feared that the cost of the operation and follow-up care would sink her budget.

"Last spring was an agonizing time," Smith says. "My medical expenses soared because I had to spend $900 a month on medications."

In June, Smith landed a new job as a sales manager at another company. Its health insurance plan is not as good as what she had at Art Van, but, she says, "I'm more fortunate than many of my former co-workers."

United for Respect, a Washington, D.C.-based nonprofit organization that advocates for economic justice for retail workers, has rallied to the support of the 3,100 employees of Art Van. Its September 28 letter urged Thomas H. Lee Partners, a Boston-based private equity firm which took over Art Van in 2017, to give former employees $1,500 each to cover three months of out-of-pocket insurance so they could weather the COVID-19 pandemic. The letter argued that the $400 per worker payments provided by the company's hardship fund were woefully inadequate.

"[F]ormer employees are facing astronomical hospital bills, unable to afford prescriptions, surviving a pandemic as immune-compromised, and recovering from contracting COVID, among many other circumstances," the letter stated. A spokesperson for United for Respect says the letter drew no response.

The experience of the Art Van workers is becoming increasingly common as the pandemic continues to ravage the U.S. economy. An estimated 164 million Americans under age sixty-five--nearly half the entire U.S. population — were covered by employer-provided insurance plans, as the Commonwealth Fund reported in November 2019.

The group recently estimated that, as of June 2020, some 7.7 million workers with employer-sponsored insurance had lost their jobs due to the pandemic-induced recession. These plans also covered 6.9 million of their dependents, pushing the total to 14.6 million people.

"Only with time will we know how many job losses are ultimately permanent," the group said.

A government survey cited in an August report from the Economic Policy Institute found that for every 100 workers who lose employer-provided insurance, eighty-five retain access to some form of coverage.

The Labor Department reported in October that 787,000 Americans filed for state unemployment benefits for the first time that week, roughly 40,000 fewer than the previous week but still roughly four times the weekly claims from before the pandemic.

Since February, nearly 700,000 people have left the workforce. In October, unemployment stood at 6.9 percent, down from a record high of nearly 15 percent in April. The nation has lost nearly eleven million jobs to COVID-19. Many are gone for good. The newly jobless must find other ways to obtain health care.

Sorting through insurance options and figuring out what is best can be a daunting task. People who have lost their employer-sponsored insurance must find ways to cover medications and treatments, find new provider networks, and choose deductibles.

Fortunately, grassroots groups, unions, legal aid societies, and others have launched extensive public awareness campaigns to advise unemployed workers like Kathy Vanco of Avenel, New Jersey.

Vanco, who lost her job as an accounts receivable clerk in March, has high blood pressure and chronic obstructive pulmonary disease. She was "terrified when I learned my insurance would end in five days." A friend suggested that she contact New Jersey Citizen Action, a statewide grassroots organization.

The staff explained Vanco's options and helped the sixty-three-year-old widow enroll in a marketplace plan under the Affordable Care Act, which provides subsidies to help pay for premiums.

"I am very grateful because they helped me find a plan that has the benefits I need, so I don't have to worry every day that I will become incapacitated by going without regular medical care," Vanco says. "My share of the premiums is $128 a month, which I can afford, even though I lost my job."

Unemployed workers like Vanco must think about health insurance in ways they never did before, because this is the first economic crisis, in recent history, triggered by a public health emergency.

"During previous recessions, workers were focused on getting back to work, but now they must also consider whether they will survive the pandemic," says Maura Collinsgru, health care program director of New Jersey Citizen Action.

Uninsured workers who skip routine care for chronic conditions like diabetes and hypertension risk dying of a heart attack or stroke, she explains. Accident victims who forego emergency treatments may be left with permanent disabilities.

Although the majority of people who get COVID-19 have mild symptoms, those who develop complications like pneumonia and require hospitalization may face thousands of dollars in out-of-pocket expenses.

"Many unemployed workers without insurance must make draconian decisions," Collinsgru explains. "Do they spend their meager funds on feeding their families or do they seek medical treatments for themselves? Most workers put their families first."

The spike in the loss of employer-provided insurance could exacerbate workers' long-term financial security, says John R. Keller, supervising attorney of Legal Aid of North Carolina, which established a navigator consortium. The group of health care, social services, and legal aid organizations provides free help to state residents to enroll in the health insurance marketplace plans offered under the Affordable Care Act.

"Replacing health insurance is usually not the first concern of people when they lose their jobs," he says. "But it soon tops their list of worries because it can lead to crushing debts and even bankruptcy if they become ill."

Before the pandemic, one in three Americans said they were unable to pay a $400 medical bill without selling their belongings or borrowing money. About 530,000 Americans were filing for bankruptcy each year because of medical bills or the loss of income due to illness.

Historic unemployment during the pandemic has shed a light on how many people live just one paycheck away from losing everything, says Karen Pollitz, senior fellow of health reform and private insurance at the Henry J. Kaiser Family Foundation, a San Francisco-based nonprofit.

"The Affordable Care Act is a lifesaver for the millions of Americans who face the double whammy of a loss of a job and health insurance," Pollitz tells The Progressive. "Our studies show that nearly half of the 27 million who lost job-based benefits from March 1 through May are eligible for Medicaid and an additional 8.4 million qualify for marketplace plans."

Unfortunately, Pollitz says, "many unemployed workers won't qualify for Medicaid because they fall in the coverage gap of having incomes above Medicaid eligibility limits but below the poverty level for the lower levels of marketplace premium tax credits."

Unemployed workers in Texas and eleven other states that have not expanded Medicaid are finding themselves in dire straits. "We are receiving frantic calls from people who have lost their job-provided health benefits and cannot afford the medications and therapy that enable them to function and even survive in some cases," says Greg Hansch, executive director of the National Alliance on Mental Illness Texas.

Levels of anxiety and depression have spiked during the pandemic, Hansch says. In addition to the loss of income and savings, many people have had to homeschool their kids and live in situations that test their ability to cope. Unfortunately, at the time they need therapy and counseling the most, many people with mental conditions cannot afford it.

"Paying for a drug that costs $1,300 a month is impossible for many workers with middle-income jobs, let alone someone who earns the minimum wage," says Hansch, whose organization is working with pharmaceutical companies and therapists to provide free or reduced-cost care. "Some people are going without eating to pay for medications. Others are going off the drugs, which increases their risks for ending up in a hospital or even the criminal justice system."

The persistent coronavirus and record unemployment have heightened calls to reform or replace employer-provided health benefits. Progressives including Senator Bernie Sanders, Independent of Vermont, have called for Congress to enact a government- financed, single-payer system like Medicare for All.

Meanwhile, some progress is occurring at the state level. Georgia ordered all health insurers to refrain from canceling health policies because of nonpayments during the pandemic. In New Jersey, the state has waived prior authorization before hospitalization as well as premiums for individuals enrolled in Medicaid and the Children's Health Insurance Program (CHIP). As Dena Mottola Jaborska, associate director of New Jersey Citizen Action, noted, "These changes will encourage parents of the estimated 80,000 uninsured children in New Jersey to enroll their children in these life-saving programs."

Wendy Chun-Hoon, executive director of Family Values @ Work, a nonprofit group of twenty-seven state and local coalitions that promote family friendly workplace policies, predicts that the loss of jobs and employer-provided benefits will have a profound impact on future economic policies.

"COVID-19 has shown that the old economy doesn't work for anyone," she says. "We need a broader social- insurance system that provides basic protections like health insurance, child care, and sick days so that the United States can become a caring economy."

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