Health Reform WK-EDGE Health coverage for unemployed expanded by American Rescue Plan
Thursday, July 22, 2021

Health coverage for unemployed expanded by American Rescue Plan

By Gregory Kane, J.D., M.B.A.

An issue brief on the American Rescue Plan highlights the potential expansion of health coverage for the unemployed

The Assistant Secretary for Planning and Evaluation (ASPE) Office of Health Policy released an Issue Brief examining the potential expansion of health coverage to the unemployed under the American Rescue Plan (ARP). People who were approved to receive unemployment compensation (UC) for any week beginning in 2021 are eligible for subsidies and some households can receive advanced premium tax credits (APTCs). An estimated 1.4 million people will benefit from these provisions (ASPE Issue Brief, No. HP-2021-15, July 1 2021).

Background. During the COVID-19 public health emergency, a July-August 2020 survey reported that a total of 6 percent of all adults (15.3 million individuals) had someone in their household lose health insurance during the pandemic, the largest annual loss ever recorded. The ARP included a number of provisions to make private health coverage more affordable. Under the ARP, individuals approved for UC for at least one week beginning in 2021are eligible for enhanced Marketplace subsidies for themselves and their household throughout 2021, if they are otherwise eligible for such subsidies. In addition, temporary special rules allow UC recipients to be treated as if their income was 133 percent of the Federal Poverty Level which generally qualifies them for a zero-premium benchmark silver plan and cost sharing subsidies in 2021.

Impact. The Department of Labor reports that the total number of persons receiving UC ranged from 14.5 million to 20.4 million. Uninsured rates are not available in administrative data but the Census Bureau’s Household Pulse Survey found more than 4 million uninsured workers received UC from November 23, 2020 to January 18, 2021. Roughly half of this group were people of color and two-third of these uninsured workers were in just 10 states. The "Medicaid coverage gap" effects households with income less than 100 percent of the federal poverty level in states that have not expanded Medicaid and who are not eligible for APTCs nor for Medicaid. The new ARP provisions will make APTCs available to some portion of this population. In addition, because APTCs can be applied to any metal tier plans, some UC recipients will be eligible not just for substantial premium savings but also for far more generous coverage. Those UC recipients already enrolled in marketplace coverage will receive additional tax credits as well. These changes are available starting July 1, 2021.

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