Health coverage of California workers most at risk of job loss due to COVID-19

A joint publication of the UC Berkeley Labor Center and the UCLA Center for Health Policy Research
Part of the Labor Center’s Covid-19 Series: Resources, Data, and Analysis for California
 

Many California workers are at risk of losing their job-based health coverage when they lose their jobs due to the COVID-19 pandemic. In this data brief, we examine which types of health insurance, if any, the workers most at risk of job loss had prior to this crisis. We use this analysis to inform our estimate that for every 100,000 California workers losing their jobs due to the pandemic, up to 67,000 workers, spouses, and children are at risk of losing job-based coverage.

Throughout this brief, we focus on workers in the industries at highest risk of job losses due to the economic fallout related to the coronavirus pandemic and, within those industries, front-line occupations that are likely to be the first to experience job loss. Using analysis by Sarah Thomason, Annette Bernhardt, and Nari Rhee of the UC Berkeley Labor Center,[1] the industries we include are: restaurants and bars; select retail industries; hotels and other lodging; amusement, gambling, and recreation; performing arts, sports, and museums; landscaping and building services; select other services; employment services; air transportation; and select private passenger transportation. Our analysis excludes independent contractors because they are not offered health coverage through their own jobs. The workers on which this brief focuses comprised approximately 16 percent of the California workforce in 2018.[2]

Not all workers in these industries will lose their jobs, nor will all job losses occur solely in these industries. Furthermore, the focus on these industries is not intended to be used to estimate the total number of job losses that are likely to occur. Instead, the focus on these industries allows us to make reasonable estimates about the type of health coverage workers most at risk of job loss had prior to this crisis and the distribution of their household incomes.

This brief focuses on the health coverage implications for those who lose jobs, but California workers who have reductions in work hours may also lose job-based coverage if their work hours fall below the benefits eligibility threshold set by their employer. However, it is more difficult to assess the impact of hours reduction on loss of job-based coverage because of the interplay of various individual factors, such as each worker’s scheduled work hours prior to the crisis, the change in work hours, and the employer’s health insurance eligibility policy.

 

Half of workers in the industries most at risk of job loss had job-based coverage and one-quarter had Medi-Cal

Half (51 percent) of California workers, ages 19 to 64 workers who are employees and not independent contractors, in industries at highest risk of job losses had job-based coverage in 2018 (Exhibit 1). This is lower than the 65 percent of all California workers in this age range having job-based coverage in 2018 (Exhibit A1), which is not surprising given that jobs in these industries are more likely to be low-wage,[3] and workers with low-wage jobs are less likely to have job-based coverage.[4] Among workers who have health coverage through their own job (as opposed to through a spouse or parent), job loss would likely result in loss of coverage for both the worker and their dependents, as discussed in the next section of this brief.

Nearly one-quarter of workers (24 percent) in these industries had Medi-Cal coverage in 2018. Many of these workers are likely eligible for Medi-Cal under the Affordable Care Act (ACA) expansion, which expanded eligibility to low-income adults without children living at home and to certain parents who were not already eligible. Workers in these industries rely on Medi-Cal at a higher rate than all California workers (14 percent on Medi-Cal, Exhibit A1). These workers and their families will generally face no change in their health coverage during the crisis, particularly in the near-term due to Governor Newsom’s Executive Order to suspend Medi-Cal eligibility redeterminations for 90 days starting in mid-March 2020.[5]

Nearly one in ten workers (9 percent) in these industries had coverage through Covered California or purchased insurance directly from an insurer in 2018, the same as the percentage of all workers with this type of insurance (Exhibit A1). Some of these workers may become newly eligible for Medi-Cal if they lose their job. Others may be eligible for greater financial assistance with premiums and out-of-pocket costs through Covered California due to a reduction in income. Income eligibility for programs is briefly noted in Exhibit 3.

Fourteen percent of workers in these industries were already uninsured before the crisis, higher than the 9 percent of all California workers who were uninsured (Exhibit A1). Uninsured individuals who are eligible for Medi-Cal based on income can enroll at any time of year, and, due to a special enrollment period in response to the pandemic, those eligible for Covered California can enroll through June 30, 2020, regardless of whether they experience a change in life circumstances as is typically required for mid-year enrollment. [6] Uninsured Californians can also enroll in a new Medi-Cal program that covers COVID-19 related testing, testing-related services, and treatment, regardless of immigration status, income, or resources.[7]

Industry-specific estimates of the coverage type distribution for workers in the industries at highest risk of job losses are shown in Exhibit A1 in the Appendix.

 

Up to 67,000 California workers and dependents could lose job-based coverage for every 100,000 Californians who lose their job

We estimate that for every 100,000 California workers who lose their job, up to 67,000 workers, spouses, and children could lose job-based coverage (Exhibit 2). Again, this estimate is not applicable to independent contractors who are not eligible for health coverage through their own job.

This ratio is estimated starting with the 51 percent of California workers in these industries who had job-based coverage in 2018, which is adjusted down to 35 percent to exclude those who have coverage through a spouse or parent’s job.[8] (If the spouse or parent works in an industry at high risk of job loss, the household would already be counted in this ratio.) For every 10 workers that lose their job-based coverage, up to 9 spouses and children of these workers could also lose coverage, based on the ratio of policyholders to dependents with job-based coverage in California in 2018. [9]

Our estimated ratio is an upper-bound estimate for several reasons. First, some of these newly unemployed workers may enroll in job-based coverage available through a spouse or parent who maintains their job. Second, some employers are continuing to pay for job-based coverage when workers are furloughed, though the extent to which this practice is occurring is unknown. Finally, some workers who lose job-based coverage may decide to enroll in COBRA coverage, though paying the full premium for insurance is likely unaffordable for most unemployed workers unless the federal government provides substantial premium subsidies as some members of Congress have proposed.[10] If COBRA premium subsidies were provided, our estimated ratio would require adjustment.

The number of Californians who will lose jobs as a result of the economic fallout from the pandemic, and the timeframe for job loss and eventual recovery, are highly uncertain. As further information becomes available about the economic impacts of this crisis, our estimated ratio is intended to be used in combination with the best available estimate of job losses at any given time.

At this time, the 3.9 million initial unemployment insurance claims filed in California between March 12 and May 1, 2020[11] is probably the best indicator we currently have of how many jobs have already been lost, either temporarily or permanently, due to COVID-19. However, it is an imperfect measure. On the one hand, it can overstate job loss because it includes claims filed for partial unemployment due to reduction in work hours. On the other hand, it can understate job loss for other reasons including but not limited to workers’ ineligibility for unemployment insurance due to immigration status or having recently entered the workforce. Additional Californians who have lost jobs may not yet have been able to successfully file claims.[12]

Using the ratio in Exhibit 2, 3.9 million lost jobs equates to up to 2.6 million California workers and dependents at risk of losing job-based coverage, not including any loss of coverage due to work hour reductions. If more or fewer jobs are lost, the projected loss of job-based coverage would be proportionally higher or lower. (See Appendix B for a summary of estimates from other researchers on how many Californians have lost or may lose job-based coverage due to COVID-19.)

 

Most Californians losing job-based coverage will be eligible for Medi-Cal or subsidized insurance through Covered California

The 2018 income distribution of California workers in the industries at highest risk of job losses (Exhibit 3) suggests that most Californians who are at risk of losing job-based coverage will likely be income eligible for Medi-Cal or insurance through Covered California with ACA or state financial assistance based on their income. Among California workers in industries most at risk of job losses, over three-quarters of those with job-based coverage (77 percent, Exhibit 3) had income at or below 600 percent of the Federal Poverty Level, the upper income limit for state financial assistance through Covered California, in 2018. Estimating how household income and health insurance eligibility will change due to job loss requires further analysis and research, but some factors for consideration are discussed in this section.

Pandemic Unemployment Compensation under the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides unemployment insurance recipients $600 per week in addition to regular unemployment benefits. As a result of these additional payments, most unemployment insurance recipients in California with income in the Medi-Cal or Covered California subsidy-eligible range are anticipated to receive unemployment insurance payments that fully replace or more than replace their usual wages, according to analysis by the Public Policy Institute of California.[13] However, after Pandemic Unemployment Compensation expires on July 31, 2020, assuming there is no extension, unemployment insurance recipients will receive less than their usual wages.

Further complicating projections of how income will change for purposes of health insurance eligibility, Pandemic Unemployment Compensation will not be counted as income for Medi-Cal eligibility under the CARES Act, but it will be counted as income for eligibility for subsidies through Covered California. All other forms of unemployment insurance count as income for Medi-Cal and Covered California eligibility purposes. Recovery Rebates, the one-time cash payments provided under the CARES Act, are not counted as income. (See the Labor Center’s summary of Modified Adjusted Gross Income under the Affordable Care Act for more details.[14])

The immigration status of workers losing their jobs is another important consideration in estimating how many Californians losing job-based coverage will be newly eligible for Medi-Cal or Covered California. Low-income undocumented Californians are eligible for Medi-Cal through age 25 under state policy, but all other undocumented Californians are ineligible. Under federal policy, subsidies through Covered California are available to citizens and lawfully present immigrants, which excludes undocumented Californians and those approved for Deferred Action for Childhood Arrivals (DACA).[15] According to estimates from the California Budget and Policy Center, undocumented workers were employed in industries likely to be highly impacted by the COVID-19 response at a higher rate (34 percent worked in these industries)[16] than all California workers (24 percent).[17]

Not all individuals who are eligible for Medi-Cal or subsidized insurance through Covered California will enroll in those programs. Some may not realize they are eligible for these coverage programs or that financial assistance is available, while others may not be able to afford premiums even with financial assistance. California is already undertaking special efforts to maximize enrollment in these programs during the pandemic. For example, Covered California re-opened enrollment due to the pandemic through June 30, 2020, and Covered California and the Department of Health Care Services are working with the Employment Development Department to inform unemployed Californians of their health coverage options.

 

Policy implications

While it has always been true, the COVID-19 pandemic has made it even more clear that the health of all Californians depends on all Californians having affordable access to care.

This pandemic has further highlighted a major weakness in our current fragmented health care system in which health insurance for most Californians under the age of 65 is tied to employment.[18] At a time when access to health care is particularly needed, many Californians are losing their job-based coverage. While some Californians will switch to other types of coverage, others are likely to lose insurance completely because they may not be aware of their eligibility for coverage programs or they may face difficulties enrolling, in spite of strong efforts in California to conduct outreach and streamline enrollment processes and open up enrollment opportunities. Others may have difficulties affording premiums for insurance through Covered California even if they are eligible for ACA or state subsidies. Those who are not eligible for ACA or state subsidies may find coverage purchased directly from an insurer unaffordable. Among Californians who switch insurance plans or type of insurance, some may face disruptions in care when they experience a change in provider networks. Other will have their health care spending under a deductible restart to zero when they switch plans, increasing their exposure to out-of-pocket expenditures for the year and potentially hindering access to care.

Other high-income countries organize their health systems in a variety of ways to achieve near-universal access to health care, but the large role of U.S. employers in directly providing primary health insurance is relatively rare from an international perspective.[19] A system that provides universal access to health care for all Californians without regard to employment status would reduce the need for workers to worry about affording and accessing health care when they lose or change their job. The Healthy California For All Commission will be exploring options for establishing a unified financing approach to providing health care to all Californians, including but not limited to a single payer system.

In our current health care system, having health insurance matters in good times and bad. Research has repeatedly shown that people without health insurance have worse access to care and are less likely to receive preventive care and treatment for major health conditions. Uninsured people are also more likely to face financial hardship related to paying medical bills.[20]

To maximize the number of Californians with insurance, the federal government and California can take steps to expand eligibility for coverage and improve affordability of coverage. For those who are eligible for coverage programs, well-targeted outreach and enrollment efforts continue to be as critical as ever in maximizing enrollment. Given that undocumented Californians make up the largest group of uninsured in the state,[21] continuing the state’s progress towards expanding Medi-Cal to all low-income Californians regardless of immigration status will be an essential component to moving towards universal coverage. In addition, federal and state policies to improve Covered California premium and out-of-pocket affordability would help to increase enrollment among the second largest group of uninsured in the state – those who are eligible for Covered California but not enrolled, most commonly due to affordability concerns.[22] And finally, policies that improve affordability of premiums and care for people with job-based coverage are urgently needed.

 

Appendix A: Health Coverage by Industry

 

Appendix B: Other Estimates of Job-Based Coverage Loss in California under COVID-19

Other researchers have also estimated how many Californians may lose job-based coverage due to COVID-19. The Economic Policy Institute estimated that, not including dependents, 1.65 million California workers were at risk of having already lost job-based coverage as of April 2020, based in part on 3.68 million unemployment insurance claims filed in the state between March 15 and April 25, 2020.[23] The State Health Access Data Assistance Center (SHADAC) at the University of Minnesota estimated that as many as 2.16 million California workers and dependents are at risk of losing job-based coverage, based in part on unemployment insurance claims filed in the four weeks leading up to April 11, 2020.[24] The Urban Institute analyzed coverage shifts under three unemployment rate scenarios (15 percent, 20 percent, and 25 percent unemployment rates) and projected the number of California workers and dependent losing job-based coverage under each scenario (2.11 million, 3.07 million, and 4.02 million respectively).[25] Health Management Associates analyzed coverage shifts under three unemployment rate scenarios (10 percent, 17.5 percent, and 25 percent unemployment rates) and projected the number of California workers and dependent losing job-based coverage under each scenario (1.30 million, 2.56 million, and 3.84 million respectively).[26]

 

Endnotes

[1] Sarah Thomason, Annette Bernhardt, and Nari Rhee, “Industries at Direct Risk of Job Loss from COVID-19 in California: A Profile of Front-Line Job and Worker Characteristics,” UC Berkeley Labor Center (blog), April 10, 2020, https://laborcenter.berkeley.edu/industries-at-direct-risk-of-job-loss-from-covid-19-in-california/.

[2] Authors’ analysis of IPUMS Current Population Survey data, 2018.

[3] Sarah Thomason, Annette Bernhardt, and Nari Rhee, “Industries at Direct Risk of Job Loss from COVID-19 in California: A Profile of Front-Line Job and Worker Characteristics,” UC Berkeley Labor Center (blog), April 10, 2020, https://laborcenter.berkeley.edu/industries-at-direct-risk-of-job-loss-from-covid-19-in-california/.

[4] Kevin Lee, Laurel Lucia, Dave Graham-Squire, and Miranda Dietz, “Job-based coverage is less common among workers who are black or Latino, low-wage, immigrants, and young adults,” UC Berkeley Labor Center (blog), November 22, 2019, https://laborcenter.berkeley.edu/job-based-coverage-is-less-common-among-workers-who-are-black-or-latino-low-wage-immigrants-and-young-adults/.

[5] State of California Executive Office, “Executive Order N-29-20,” March 17, 2020, https://www.gov.ca.gov/wp-content/uploads/2020/03/3.17.20-N-29-20-EO.pdf.

[6] Covered California, “News Release: California Responds to COVID-19 Emergency by Providing Path to Coverage for Millions of Californians,” March 20, 2020, https://www.coveredca.com/newsroom/news-releases/2020/03/20/california-responds-to-covid-19-emergency-by-providing-path-to-coverage-for-millions-of-californians/.

[7] California Department of Health Care Services, “COVID-19 Presumptive Eligibility Program,” accessed April 30, 2020, https://www.dhcs.ca.gov/services/medi-cal/eligibility/Pages/COVID-19-Presumptive-Eligibility-Program.aspx.

[8] Among California workers ages 19-64 in the select industries with job-based coverage, 69 percent have coverage through their own job, and the remainder have coverage through a family member’s job. Authors’ analysis of IPUMS Current Population Survey data, 2018.

[9] Authors’ analysis of IPUMS Current Population Survey data, 2018. This estimate reflects the policyholder to dependent ratio for all Californians with job-based coverage. We also analyzed this ratio by household income level and found that households with income at or below 266 percent FPL had a higher number of dependents enrolled in job-based coverage per policyholder, on average, even though some of these households may have children enrolled in Medi-Cal instead of job-based coverage. Therefore, to the extent that workers who lose their jobs are low-income, the number of dependents who lose coverage may be even higher than estimated here.

[10] U.S. House of Representatives Education and Labor Committee, “House Democrats Introduce Bill to Help Workers Keep Job-Based Health Coverage During COVID-19 Crisis,” April 14, 2020, https://edlabor.house.gov/media/press-releases/house-democrats-introduce-bill-to-help-workers-keep-job-based-health-coverage-during-covid-19-crisis.

[11] California Governor Newsom, “Daily Coronavirus Briefing,” May 1, 2020. Note: The 3.9 million initial unemployment insurance claims are separate from the applications the state has received under the Pandemic Unemployment Assistance program for independent contractors.

[12] Ben Zipperer and Elise Gould, “Unemployment filing failures

New survey confirms that millions of jobless were unable to file an unemployment insurance claim,” Economic Policy Institute, April 28, 2020, https://www.epi.org/blog/unemployment-filing-failures-new-survey-confirms-that-millions-of-jobless-were-unable-to-file-an-unemployment-insurance-claim/.

[13] Sarah Bohn, Marisol Cuellar Mejia, Julien Lafortune, “Unemployment Benefits in the COVID-19 Pandemic,” Public Policy Institute of California, April 9, 2020 https://www.ppic.org/blog/unemployment-benefits-in-the-covid-19-pandemic/.

[14] UC Berkeley Labor Center, “Modified Adjusted Gross Income under the Affordable Care Act – Updated with Information for COVID-19 Policies,” April 2020, https://laborcenter.berkeley.edu/modified-adjusted-gross-income-under-the-affordable-care-act/.

[15] Covered California, “Immigration Status and Health Coverage,” accessed April 30, 2020, https://www.coveredca.com/individuals-and-families/getting-covered/immigrants/.

[16] Sara Kimberlin and Aurio Mesquito, “No Safety Net or Federal COVID-19 Relief: California’s Undocumented Workers and Mixed Status Families Are Locked Out of Support,” California Budget and Policy Center, April 2020, https://calbudgetcenter.org/wp-content/uploads/2020/04/CA_Budget_Center_COVID_Undocumented_Workers_04152020.pdf.

[17] Sara Kimberlin, Aurio Mesquito, and Alissa Anderson, “California Workers With Less Education, People of

Color, and Immigrants are at Greatest Financial Risk

Due to COVID-19,” California Budget and Policy Center, April 2020, https://calbudgetcenter.org/wp-content/uploads/2020/04/CA_Budget_Center_COVID_worker_demographics_04152020.pdf.

[18] Kevin Lee, Laurel Lucia, and Dave Graham-Squire, “More than half of California adults have job-based coverage,” UC Berkeley Labor Center (blog), November 14, 2019, https://laborcenter.berkeley.edu/more-than-half-of-california-adults-have-job-based-coverage/.

[19] While employers in some other high-income countries pay payroll taxes to support health care system financing or provide supplemental private insurance that covers workers’ co-payments or non-covered benefits or facilitates faster or easier access to care, employer-sponsored insurance as primary coverage is relatively rare among comparable countries. Japan is one country that has a large role for employer-sponsored insurance, however their system differs significantly from the U.S. system in that it provides universal health coverage, and in that benefits, co-payments, and provider networks are similar or identical regardless of whether one is enrolled in employer-sponsored insurance, National Health Insurance, or Japan’s insurance program for people over age 75. Sherry A. Glied, Morgan Black, Wiley Lauerman, and Sara Snowden, “Considering “Single Payer” Proposals in the U.S.: Lessons from Abroad,” The Commonwealth Fund, April 11, 2019, https://www.commonwealthfund.org/publications/2019/apr/considering-single-payer-proposals-lessons-from-abroad. Japan Health Policy Now, “Japanese Health Insurance System,” accessed May 4, 2020, http://japanhpn.org/en/hs1/.

[20] Jennifer Tolbert, Kendal Orgera, Natalie Singer, and Anthony Damico, “Key Facts about the Uninsured Population,” Kaiser Family Foundation, December 13, 2019, https://www.kff.org/uninsured/issue-brief/key-facts-about-the-uninsured-population/.

[21] Miranda Dietz, Laurel Lucia, Xiao Chen, Dave Graham-Squire, Hanqing Yao, Petra W. Rasmussen, Greg Watson, Dylan H. Roby, Ken Jacobs, Srikanth Kadiyala and Gerald F. Kominski, “California’s Steps to Expand Health Coverage and Improve Affordability: Who Gains and Who Will Be Uninsured?” UC Berkeley Labor Center and UCLA Center for Health Policy Research, November 19, 2019, https://laborcenter.berkeley.edu/ca-steps-to-expand-health-coverage-and-improve-affordability/.

[22] Miranda Dietz, Laurel Lucia, Xiao Chen, Dave Graham-Squire, Hanqing Yao, Petra W. Rasmussen, Greg Watson, Dylan H. Roby, Ken Jacobs, Srikanth Kadiyala and Gerald F. Kominski, “California’s Steps to Expand Health Coverage and Improve Affordability: Who Gains and Who Will Be Uninsured?” UC Berkeley Labor Center and UCLA Center for Health Policy Research, November 19, 2019, https://laborcenter.berkeley.edu/ca-steps-to-expand-health-coverage-and-improve-affordability/.

[23] Josh Bivens and Ben Zipperer, “12.7 million workers have likely lost employer-provided health insurance since the coronavirus shock began,” Economic Policy Institute, April 30, 2020, https://www.epi.org/blog/12-7-million-workers-have-likely-lost-employer-provided-health-insurance-since-the-coronavirus-shock-began/.

[24] Ezra Golberstein, Jean M. Abraham, Lynn A. Blewett, Brett Fried, Robert Hest, Elizabeth Lukanen, “Estimates of the Impact of COVID-19 on Disruption and Potential Loss of Employer-Sponsored Health Insurance,” University of Minnesota State Health Access Data Assistance Center (SHADAC), April 2020, https://www.shadac.org/sites/default/files/publications/UMN%20COVID-19%20ESI%20loss%20Brief_April%202020.pdf.

[25] Bowen Garrett and Anuj Gangopadhyaya, “How the COVID-19 Recession Could Affect Health Insurance Coverage,” Urban Institute, May 2020, https://www.rwjf.org/en/library/research/2020/05/how-the-covid-19-recession-could-affect-health-insurance-coverage.html.

[26] Health Management Associates, COVID-19 Impact on Medicaid, Marketplace, and the Uninsured, by State, April 2020, https://www.healthmanagement.com/wp-content/uploads/HMA-Estimates-of-COVID-Impact-on-Coverage-public-version-for-April-3-830-CT.pdf.

Acknowledgements

We are grateful to The California Endowment for their support of this research. We appreciate Sarah Thomason, Annette Bernhardt, and Nari Rhee for their identification of the industries and occupations most at risk of job loss. Thank you to Beth Capell, Miranda Dietz, and Srikanth Kadiyala for their review of the brief, and Petra Rasmussen for her assistance with data analysis. Thanks to Jenifer MacGillvary for her help in preparation of the report.

About the Authors

Laurel Lucia, MPP, is Director of the Health Care Program at the UC Berkeley Center for Labor Research and Education. Kevin Lee, MPH, is a Doctoral student at the UC Berkeley School of Public Health and a Graduate Student Researcher at the UC Berkeley Center for Labor Research and Education. Ken Jacobs is Chair of the UC Berkeley Center for Labor Research and Education. Gerald F. Kominski, PhD, is Professor of Health Policy and Management, UCLA Fielding School of Public Health, and Senior Fellow, UCLA Center for Health Policy Research.

Suggested Citation

Lucia, Laurel, Kevin Lee, Ken Jacobs and Gerald F. Kominski. Health coverage of California workers most at risk of job loss due to COVID-19. Center for Labor Research and Education, University of California, Berkeley and Center for Health Policy Research, UCLA. May 2020. https://laborcenter.berkeley.edu/health-coverage-CA-workers-at-risk-of-job-loss-COVID-19/.

The analyses, interpretations, conclusions, and views expressed in this report are those of the authors and do not necessarily represent the UC Berkeley Institute for Research on Labor and Employment, the UC Berkeley Center for Labor Research and Education, the UCLA Center for Health Policy Research, the Regents of the University of California, or collaborating organizations or funders.