These estimates were updated on May 14, 2020. See the updated estimates.

We estimate that 9.2 million workers were at high risk of losing their employer-provided health insurance in the past four weeks. To avoid prohibitively costly insurance options, the federal government should fund an expansion of Medicare and Medicaid to all those suffering job losses during the pandemic period.

Two weeks ago, when the two-week total of unemployment insurance (UI) initial claims was 8.7 million, we estimated that 3.5 million workers may have lost their health insurance at work. Since then, 11.4 million more workers filed claims for unemployment benefits, bringing the total of UI initial claims over the last four weeks to 20.1 million, currently the most comprehensive measure of the extent of job losses and furloughs due to the COVID-19 pandemic.

We estimate that across all industries where workers have filed UI claims, about 45.7% of workers had their own health insurance provided through their employer. As a result, of the 20.1 million workers who filed initial UI claims in the last four weeks, 9.2 million may have lost coverage through their own employer-provided health insurance (EPHI).

The analysis, described below, combines industry-specific UI claims data for 11 states, representing about 20% of national employment, with national, industry-specific health insurance coverage rates. Using these data, we provide a rough prediction of 9.2 million workers losing EPHI. We can’t say exactly how many people will lose insurance coverage altogether for several reasons. For example, some workers who lose EPHI due to layoffs or hours reductions that trigger UI claims may be able to obtain coverage through health care exchanges set up by the Affordable Care Act (ACA) or through Medicaid. Some of this group may also be able to obtain continuing coverage through COBRA, paying out of pocket the full cost of their EPHI coverage. Some workers may be able to obtain coverage through other family members, or if only experiencing a temporary furlough or hours reduction, their employers might continue to pay for coverage. On the other hand, our calculations might understate the loss of health insurance coverage because they do not account for family members who are no longer covered because of the policyholder’s layoff. And, because not all layoffs result in UI claims, we will underestimate the actual magnitude of job losses.

Because the United States is unique among rich countries in tying health insurance benefits to employment, many of the newly unemployed will suddenly face prohibitively costly insurance options. A comprehensive policy solution would be to extend Medicare and Medicaid to all those suffering job losses during the pandemic period, with the federal government funding this expansion. Current discussions suggest there may be legislation that the federal government pay for all of COBRA coverage so that workers who are laid off or furloughed may continue their employer-provided coverage. While this policy proposal will help many workers continue coverage, in some states it will not help workers from small businesses with fewer than 20 employees, who are not eligible for COBRA.

The linkage between specific jobs and the availability of health insurance is a prime source of inefficiency and inequity in the U.S. health system. It is especially terrifying for workers to lose their health insurance as a result of, and during, an ongoing pandemic.

Methodology

Our methodology builds on our previous work, which extrapolated from industry-level statistics published by Washington state. In this updated analysis, we instead use recently collected industry-level UI claims data from 11 states. From these states’ data, we calculate the average industry-specific shock as the number of UI claims as a share of 2019Q3 employment from the QCEW. We apply this industry-specific job loss share to all the other states’ industry-specific employment totals, and then we proportionally scale these losses so that each state’s total job loss equals its statewide not-seasonally-adjusted total initial UI claims for the four weeks ending March 21 through April 11. The estimates in the first column of Table 1 are the sum of these industry- and state-specific job losses.

The second column provides national industry-specific shares of employer-provided health insurance coverage rates using data from the 2018 March Current Population Survey, limiting the sample to those who worked in the private sector or in government during the previous year. Multiplying the first and second column is our estimate of EPHI job losses: the number of layoffs or furloughs in which, on average, workers will be at risk of losing their own employer-based health insurance. Finally, the fourth column expresses the total job loss estimate as a share of 2019Q3 industry-specific employment.

Figure A uses the same methodology but provides state-specific estimates of these job losses.

We should note that other analysis has shown that it is difficult to draw reliable inferences from the industry composition of UI claims. In the case of EPHI, we don’t yet have independent direct data sources on coverage to provide a check for the industry-based estimates in this post. As these sources become available, we will use them to check or supplement these estimates.