The COVID-19 pandemic is exacerbating existing economic and healthcare inequalities between racial groups in the US. Nationally, employment decreased 13% from February to April 2020; this effect was disproportionately greater among Asian (-18%), Black (-15%), and Hispanic (-17%) workers compared to White (-11%) workers. Avalere analysis suggests that, because of these job losses, at least 1 million Asian, 2 million Black, and 3 million Hispanic people are likely to lose their employer-sponsored health insurance in 2020.

“These results reflect the disproportionate impact COVID-19 is having on the health insurance coverage of communities of color,” said Chris Sloan, Associate Principal at Avalere. “The percentage loss of health insurance coverage among Asian, Black, and Hispanic individuals is approximately double that of White individuals.”

Analysis of Pre-Pandemic Health Insurance Coverage

To understand the potential impact of the pandemic on health insurance coverage by race, Avalere analyzed 2018 coverage data to determine coverage prior to the COVID-19 pandemic in the US by race (Figure 1). Before the pandemic, Black and Hispanic people were more often covered by Medicaid compared to White people (27% and 29%, respectively, compared to 11%) or to be uninsured (11% of Black people and 18% of Hispanic people, compared to 6% of White people). Insurance coverage for Asian people more closely resembled coverage trends for White people.

Pre-pandemic, Black and Hispanic people were disproportionately represented in safety net programs and among the uninsured population, and underrepresented in employer-sponsored insurance, relative to their share of the population.

Impact of the Pandemic on Health Insurance Coverage

To estimate the impact of the COVID-19 pandemic on these pre-existing racial disparities in health insurance coverage, Avalere analyzed decreases in employer coverage associated with the outbreak (Figure 2). While a greater number of White people lost their employer coverage from February to April 2020, Black and Hispanic people faced a disproportionately larger loss of coverage relative to their populations. Specifically, a higher percentage of Black and Hispanic people lost their employer coverage compared to White people (13% change vs. 6% change).

From these data, Avalere estimated how many people would shift into another form of coverage or become uninsured. As individuals lose employment, a portion will also lose access to employer-sponsored health insurance. As these individuals, their spouses, and any dependents lose access to coverage, they are shifting into new forms of healthcare insurance or going without coverage entirely. In particular, individuals living in states that have not expanded Medicaid may be more likely to lose health insurance entirely. Prior to the pandemic, uninsured Black people more often live in states that have not expanded Medicaid, relative to Whites.

“The loss of employer-sponsored insurance is expected to disproportionately impact the Black and Hispanic populations,” said Angel Valladares, Consultant II at Avalere. “These shifts will further exacerbate the pre-existing disparities in coverage before the coronavirus outbreak.”

In addition to growing numbers of uninsured, the change in enrollment away from employer-sponsored insurance and toward either the individual market or Medicaid will likely present challenges for patients who may face decreased access to care. For example, most plans in the individual market have narrower networks, meaning that patients may not be able to continue to see their established providers if they are not in network in their new plan. Similarly, only 71% of physicians accept Medicaid payments for new patients, presenting further access barriers to patients shifting into Medicaid enrollment. These challenges may prevent continuity of care for some patients, further increasing the negative impact of the pandemic.

“Overall, the shift away from employer-sponsored insurance could be challenging for patients,” said Tom Kornfield, Senior Consultant. “Many of these patients could face less generous benefit design, greater cost sharing, and more limited formularies in Medicaid or in the individual market.”

Conclusion

Addressing racial disparities in coverage is a key component of any solution to improve access to healthcare and to respond to the COVID-19 public health emergency. Historically, policy changes such as Medicaid expansion have been successful in narrowing the uninsured gap between communities of color and White people. For example, the uninsured rate for nonelderly Hispanic people fell from 30% to 19% between 2013 and 2016 following implementation of the Medicaid and health insurance exchange coverage expansions. During the same period, the uninsured rate for nonelderly Black people fell from 19% to 11%. While any single policy change is unlikely to fully eliminate the longstanding inequities in healthcare, considering racial disparities in coverage in policy discussions may mitigate these challenges and facilitate increased access to care.

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Methodology

Using health insurance distribution by race from the American Community Survey for 2018, Avalere determined the disparities in access to health insurance coverage prior to COVID-19. Then, Avalere analyzed recent employment losses, by race, from February 2020 to April 2020 based on the Bureau of Labor Statistics (BLS) monthly releases to estimate the number of individuals losing employment who may also be losing access to job-based health insurance coverage. Avalere used the coverage shift estimates from its proprietary All-Payer Enrollment Model to determine which of those individuals shift into Medicaid, exchanges, and the uninsured. Importantly, the BLS unemployment monthly releases only segment job loss by race/ethnicity across White, Black, Asian, and Hispanic individuals. As such, this analysis focuses solely on those groups.