As Unemployment Rises, Access to Healthcare is in Question

Last week, the Department of Labor released its latest number showing nearly three million Americans filed for unemployment, bringing the total number of unemployed to 36.5 million. With the economic situation getting worse each week, Congress needs to consider what additional measures to take to address this growing problem. Last week, the House of Representatives took the first step by narrowly passing the HEROES Act, a $3 trillion relief package designed to provide aid to the struggling economy. While Senate Republicans and the White House have already said the bill is dead on arrival, House Democrats have argued that this bill is a starting point for future negotiations. Therefore it makes sense to look at the points of the bill, and how they would impact patient access to healthcare. 

The bill at its core does a few important things. It includes provisions that would provide sorely needed relief to state and local governments, hazard pay for frontline health care workers, student debt forgiveness, and most important, financial support for Medicaid and Medicare. We’ve talked on the blog before about hazard pay for frontline health care workers. Now we are going to focus on two other provisions of the bill. 

Providing Necessary Relief to Local and State Governments 

The single largest allocation of funding in the bill is $1 trillion in aid for state, local and tribal governments, as well as another $1,200 stimulus payment for households. Senate Majority Leader Mitch McConnell made headlines last month when he said that states facing budget deficits should “instead consider bankruptcy.” Now while he has walked back from those comments, he did raise awareness about how fragile state budgets can be, especially during this pandemic. For example, earlier this year, Ohio had a $200 million surplus. However, in just 2 months, the state registered $777 million in deficits, a nearly $1 billion shift. As a result, Ohio, and many other states who are facing similar circumstances, are being forced to make serious budget cuts. For many of these states, the new fiscal year starts on July 1st, and without federal assistance, they will have to make cuts in education, social assistance programs, emergency response workers, and most notably, Medicaid, all which are vital in a pandemic response. As pharmacists, we should be particularly concerned about cuts to Medicaid, as any cuts will often affect the most vulnerable of our patients who rely on the program for access to primary care services and medications to control chronic health conditions. 

While states have other options, many of these may not be viable. States have the option to borrow money from the U.S. Treasury, but due to underlying issues regarding payment of state pensions, some states have poor credit ratings, making borrowing difficult. States can also seek help from a new Federal Reserve Lending program, but the program usually charges higher interest rates to borrowers, in order to avoid competition with regular investors. Some states, like New Jersey, have alternatively pushed back the start of the fiscal year. 

This is all to say that states desperately need money during this pandemic. States cannot go bankrupt (with some legal scholars arguing that it would take a Constitutional Amendment to make that happen), and for states that try to balance their budget, they will do so at the risk of eliminating an important public health safety net for millions of Americans and exacerbating a public health crisis that is already having more serious impacts on the most vulnerable in our society. 

Impacts on Patient Access to Quality Healthcare 

The HEROES Act has a significant impact on patient access to healthcare that cannot be overstated. As mentioned above, states that are facing budget issues are looking at making cuts to Medicaid. Here is why that is problematic:

As more people lose their jobs and their income, more people will become eligible for Medicaid. For example, the United States saw a surge of Medicare enrollment in 2009, during the Great Recession when unemployment reached 10%. The goal here from a public health perspective is to ensure patients continue to have access to health insurance even if they lose their jobs. This way we can ensure they will continue to have access to COVID-19 tests, medical treatments, a possible vaccine, and continued access to prescription medication and pharmacist-provided clinical services. We know that this virus is particularly devastating to patients with chronic disease conditions, and as pharmacists we must be focused on ensuring continuity of care for our patients. This is why pharmacists should be fighting on behalf of our patients for continued access to Medicaid. 

Evaluating the impact on Medicaid though is particularly difficult since the United States has two “tiers” after passage of the Affordable Care Act (ACA): States that chose to expand Medicaid coverage and states that chose not to expand Medicaid coverage. 

In the states that chose to expand Medicaid coverage, it is unlikely to see large numbers of uninsured populations like we saw during the Great Recession, despite having a larger number of beneficiaries. First of all, by expanding Medicaid, the 37 states (including D.C.) have ensured that more patients qualify for healthcare coverage. The ACA Medicaid expansion allowed for adults with income up to 138% of the federal poverty level (FPL), or $1,467/month for an individual or $3,013/month for a family of four, to qualify for Medicaid. What’s important to note though is that state unemployment benefits do not count as income. Therefore, even though some individuals might be receiving income higher than the Medicaid cut-off, they still qualify for Medicaid eligibility. Despite the increase in the number of beneficiaries, the ACA has already said that the federal government will pay 90% of the costs for the expansion group, on top of the regular match the federal government provides for all states. 

The situation will be very different in states that have decided not to expand Medicaid. Already, more than 2 million adults have incomes that fall below the FPL and don’t qualify for Medicaid or the subsidized plans available on the ACA marketplaces. Because unemployment benefits don’t count as regular income, only those individuals/families with incomes, not including unemployment insurance, above the poverty line will qualify for subsidized health coverage through the ACA marketplace. This coverage gap will further increase inequities in health care, leaving poor Americans who don’t qualify for Medicaid or subsidized insurance, without any access to public health resources that will be vital in fighting this pandemic. And this disparity only seems to be getting worse. 

Last weekend we learned that of the nearly 36.5 million Americans who have lost their jobs since the start of this pandemic, almost 40 percent are in lower-income households making less than $40,000. That means, almost 15 million Americans who have been laid off since March, were making less than $40,000 a year. 

To put that into context of Medicaid eligibility, here are the 2020 FPL numbers that were used to calculate eligibility for Medicaid and the Children’s Health Insurance Program. 

What this illustrates is that of the 15 million Americans who have been laid off, only some would be eligible for total Medicaid eligibility. Some may be covered by subsidies on the ACA marketplaces. But for many, they have no option for health coverage whatsoever. Given the nature of this pandemic, there has never been a clearer example of how the health of other people in our society affects our own. By having a system, where people are not able to have access to health care services, we are essentially fighting this pandemic with a handicap. 

This is all to say: Federal funding for states and local governments is a must have in the next congressional relief package. Not doing so would have dire consequences on our ability to fight this pandemic, and the consequences for not doing so, would be predominantly faced by the poorest and most vulnerable in our society.

What’s next for the HEROES Act? 

The HEROES Act only narrowly passed the House, a sign of how challenging the road ahead is. President Trump and Senate Republicans have both said that the bill is dead on arrival, and despite a recent willingness to discuss a possible change package, any final package does not seem likely to contain all of these provisions. However, as we look forward as to what a potential bipartisan relief package does look like, one thing is clear… 

We need federal assistance to fund states to ensure that the poorest and most vulnerable aren’t left without access to health care services. 

Keep Engaged!

The fate of this bill is uncertain as it heads to the Senate, but regardless of what happens the debate over Medicaid and Medicare funding will continue as states and the federal government try to balance a growing economic crisis with a public health disaster. As healthcare professionals, it’s important for us to be engaged in this process, and provide our perspectives as essential healthcare providers to elected members of Congress. Advocacy does not have to be limited to legislative activism, consider informing the public about this important issue and pharmacists role through letters to the editor of your local newspaper or Op-Eds. Check out an example here.

Track the current progress of the bill here and find resources on how to engage your legislator here.

Until next time, stay curious and passionate. 

Published by The Grassroots Pharmacist

We are pharmacists passionate about engaging pharmacists in advancing health policy

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