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Health Affairs Editor-in-Chief Alan Weil interviews Kate Bundorf from the Sanford School of Public Policy at Duke University to discuss her paper in the January 2023 issue examining employment and health insurance coverage trends during the COVID-19 pandemic.
Each week, Health Affairs' Rob Lott brings you in-depth conversations with leading researchers and influencers shaping the big ideas in health policy and the health care industry.
A Health Podyssey goes beyond the pages of the health policy journal Health Affairs to tell stories behind the research and share policy implications. Learn how academics and economists frame their research questions and journey to the intersection of health, health care, and policy. Health policy nerds rejoice! This podcast is for you.
00;00;00;02 - 00;00;30;08
Alan Weil
Hello and welcome to “A Health Podyssey”. I'm your host, Alan Weil. In addition to its profound effects on people's health, the COVID 19 pandemic created major economic shocks. There was a rapid spike in unemployment, followed by a steady but gradual recovery. Since most adult Americans receive health insurance through their, or a family member's, job. These economic disruptions also led to loss of health insurance coverage.
00;00;30;22 - 00;01;00;10
Alan Weil
Now, various federal policies were put into place to reduce the economic disruption and to temper the loss of insurance coverage. Enough time has now passed to take a look at health insurance coverage trends through the early phases of the pandemic. And that's what we'll do in today's episode of “A Health Podyssey”. I'm here with Kate Bundorf, J. Alexander McMahon Distinguished Professor of Health Policy and Management in the Sanford School of Public Policy at Duke University.
00;01;00;29 - 00;01;30;02
Alan Weil
Dr. Bundorf and coauthors published a paper in the January 2023 issue of Health Affairs examining employment and health insurance coverage trends during the COVID 19 pandemic. They found that between 2021 and 2022, the overall rate of health insurance coverage increased. Yet, even as employment recovered, rates of employer sponsored insurance stayed fairly steady. We'll discuss this finding and more in today's episode.
00;01;30;15 - 00;01;32;20
Alan Weil
Dr. Bundorf, welcome to the program.
00;01;32;24 - 00;01;34;03
Dr. Kate Bundorf
Thank you so much for having me.
00;01;34;19 - 00;02;08;23
Alan Weil
This is a really important topic. We've been studying the dynamics of insurance coverage and employer sponsored insurance for decades. So before we dive into this short period where things were changing in so many different directions, probably be good for us to go back a little bit in time. If you could just give us the general picture of the role employer-sponsored coverage plays in the overall health insurance system and how it tends to historically change with changes in the economy, particularly changes in unemployment.
00;02;09;11 - 00;02;34;23
Dr. Kate Bundorf
Great. Thank you for that question. I think that's really important context. Employer-sponsored coverage is the predominant source of health insurance for the working age population, and we spend a lot of time in policy talking about the Medicaid expansions and marketplaces. But really, employer-sponsored coverage plays an important role. In 2019, 61% of people 19 to 64 had health insurance through an employer.
00;02;35;02 - 00;02;59;13
Dr. Kate Bundorf
So employer-sponsored coverage is important. However, employer-sponsored coverage historically has been quite sensitive to economic downturns. So this is not really surprising, right? If you get your health insurance through an employer, an economic downturn usually means that people lose their job. So if you have your coverage from an employer and you lose your job, you often lose your coverage.
00;03;00;10 - 00;03;33;01
Dr. Kate Bundorf
We have probably the most evidence from the Great Recession from 2007 to 2009. During the Great Recession, unemployment rose from 5% to 9.5% over a two year period. And we saw employer-sponsored coverage fall from about 63% of that working age population to about 58% of the working age population. Uninsurance didn't increase by quite as much, right, because some of the people who lose employer-sponsored coverage can get coverage from other sources.
00;03;33;28 - 00;03;44;28
Dr. Kate Bundorf
But we estimated or you know, people have estimated that about 9.3 million people lost their health insurance during the Great Recession.
00;03;45;06 - 00;04;14;15
Alan Weil
So, as you say, it's not surprising that you see this relationship, but it's well, as you say, it's not surprising that we see this relationship. So given that we come into the COVID 19 pandemic, there are huge economic dislocations if the government hadn't stepped in. And we'll talk about that in a moment. Based on the history you just described, what do you think we would have seen with respect to health insurance coverage?
00;04;14;18 - 00;04;42;01
Dr. Kate Bundorf
Yeah, So that that was a huge and important question. When the downturn, the employment, you know, downturn began very suddenly and very drastically at the beginning of the pandemic. And, you know, honestly, we didn't really know, right? And what do I mean by that, right? So, of course, as we just as we just discussed, declines in employment immediately raise the concern that uninsurance will rise because people lose their employer-sponsored coverage.
00;04;42;22 - 00;05;20;14
Dr. Kate Bundorf
But it really depends. And this recession was really quite different, right? So first, the job loss was was dramatic and immediate, right? So in March, between March and April over, you know, even a few weeks, the unemployment rate increased from roughly 4% to 14%. So if you were paying attention during my earlier remarks, you felt you may have remembered that unemployment during the Great Recession rose from 5% to 9.5%, a smaller increase over a longer time period.
00;05;20;19 - 00;05;43;27
Dr. Kate Bundorf
So this was an incredibly dramatic change. Also it was pretty reasonably clear early in the recession that the types of workers who were losing their jobs during this recession were a little bit different than those in during the Great Recession. So in the Great Recession, workers at all income levels experienced job loss.
00;05;44;05 - 00;06;10;04
Dr. Kate Bundorf
In the COVID recession, job separation and job loss was more concentrated among low income workers, as well as those in service industries. And, you know, to a certain degree, women more so than men. Some of these workers actually didn't have health insurance prior to the recession, right? So if you didn't have health insurance from an employer when you lost your job, you wouldn't necessarily lose coverage.
00;06;10;13 - 00;06;57;05
Dr. Kate Bundorf
Okay. So those are two important reasons. Also, you know, there is some speculation that some employees were furloughed rather than permanently let go. And in that process, they may have been able to keep their employer-sponsored coverage. And then the other issue is that, you know, we're often we're very focused on the policy changes during the pandemic. But I think it's also really important to remember that we had major policy changes with respect to our health insurance system between the Great Recession, you know, which ended in 2009 and the COVID recession, and namely, you know, those were the Medicaid expansions in many states, the establishment of marketplaces with subsidized coverage, extended coverage through parents.
00;06;57;05 - 00;07;19;05
Dr. Kate Bundorf
You know, for those up to 65 years of age. So the you know, the dynamics and the possibilities for people to get other sources of coverage were greater during this recession. And I would actually say that this was, you know, kind of you know, at that point, I was sitting there thinking, “Oh, this is a test” of all these new, you know, these new options that we have in place through the Affordable Care Act.
00;07;19;15 - 00;07;36;09
Dr. Kate Bundorf
And one other thing I just want to add there. You know, it was a really good time to have health insurance during a global pandemic, right? So as we saw, you know, what was happening in New York, you know, as an economist, I would say, well, you know, that increases demand for insurance. People are really worried about getting sick.
00;07;36;09 - 00;07;44;29
Dr. Kate Bundorf
And, you know, might, you know, kind of hustle a little more, really work hard, you know, to either keep the insurance they have or find alternatives if they can.
00;07;45;10 - 00;08;07;27
Alan Weil
So what you're saying to me is that we certainly, given the size of the disruption to the economy, should have anticipated a significant increase in the number of people without health insurance. But the magnitude of that is actually quite uncertain because we were in, if you will, uncharted territory, a different policy context, a very different kind of recession.
00;08;07;27 - 00;08;30;05
Alan Weil
And as you noted, many of the people losing their jobs were people who were in sectors of the economy that have historically not offered coverages as much. So we didn't really know and now we know more. So let's turn to what you found in your study that we published. Give us sort of if you will, the topline findings.
00;08;30;05 - 00;08;37;24
Alan Weil
What changes in coverage did we see during the pandemic? And then we'll start looking at how that varied across different groups.
00;08;37;25 - 00;08;59;23
Dr. Kate Bundorf
One thing I would like to stress is the paper that we're talking about really focuses on health insurance coverage between for the year of 2021 and into 2022. So most people think of this as like the second year of the pandemic, right? So we have a separate paper on the early pandemic experience, and this one is focusing on that second year.
00;09;00;24 - 00;09;28;27
Dr. Kate Bundorf
So this was a period of labor market recovery, right? Unemployment is continuing to decline during this time period. Okay. So so what is our top line? Our top line is that uninsurance declined during this period. We estimate that, you know, the trend that we saw represents about a 3.8 percentage point annualized increase in insurance coverage or decline in uninsurance.
00;09;29;09 - 00;09;53;23
Dr. Kate Bundorf
We estimate that that represents an increase of about 8 million people getting health insurance. I think this the idea that health insurance overall increased is consistent with other surveys that have been coming out over this time period. A little bit surprisingly, we found that rates of employer-sponsored health insurance remained relatively flat. So why was that a little bit surprising while the job market was improving?
00;09;54;02 - 00;10;19;28
Dr. Kate Bundorf
But as we just talked about, right, you know, we think that maybe the loss of employer-sponsored coverage wasn't quite as great prior to this time period. But the main finding is during this period, rates of employer-sponsored coverage, you know, seem to be pretty flat, pretty consistent. Rates of coverage through sources other than employers increased. So this could be Medicaid, it could be marketplace coverage.
00;10;19;28 - 00;10;41;28
Dr. Kate Bundorf
It could be coverage from the individual market, not necessarily through a marketplace. We think it's likely to be driven by, you know, Medicaid and marketplace coverage to maybe to a lesser extent. But the main finding is it wasn't employer-sponsored coverage. It was these alternatives to employer-sponsored coverage.
00;10;42;14 - 00;11;25;26
Alan Weil
So overall, we see the number of people without health insurance going down, but not primarily due to gaining coverage through their employer. The reason why that plays out is a combination of who lost coverage in the first place and what some of the policy context was. We'll talk about those factors after we take a short break. And we're back.
00;11;25;27 - 00;12;05;23
Alan Weil
I'm speaking with Doctor Kate Bundorf about employer-sponsored coverage in the second year of the COVID 19 pandemic. Before the break, we came to understand that overall rates of insurance were increasing during this period. But even though there was an economic recovery and unemployment was going down, it wasn't primarily because of that. So that leads to the question of what's the policy context in which this is taking place, where, what historically you would have imagined as people lose coverage, employer-based coverage, when the economy turns down and then they recover it when the economy turns back up,
00;12;05;23 - 00;12;26;05
Alan Weil
This looks a little bit different. So maybe if you could start by saying a little more about the policy interventions that might have affected who lost coverage and how they were covered, if they lost that coverage. And then we'll take on some other dimensions as well. But why don't we start there?
00;12;26;13 - 00;12;57;21
Dr. Kate Bundorf
So we did some analyses. You know, as I mentioned earlier in the show, we had you know, this was a different policy environment than the earlier recessions in Part B, mostly because we had the expansions in coverage through the Affordable Care Act. So one of the things that we looked at is whether how these trends differed between states that had expanded Medicaid to all low income populations, and states that hadn't expanded Medicaid to all other low income folks.
00;12;58;12 - 00;13;27;04
Dr. Kate Bundorf
And remember, this was prior, this was policy that was developed prior to the COVID 19 recession. So in Medicaid expansion states, we found that there was a clear increase in overall rates of coverage. And that clear increase in coverage was from sources other than E.S.I. That looks primarily like it's due to Medicaid or, you know, possibly other sources of publicly subsidized health insurance.
00;13;27;22 - 00;13;51;25
Dr. Kate Bundorf
Non expansion states are a little bit different, and I should qualify the things I say about non-expansion states because there are, you know, many states have expanded Medicaid now and there are fewer non-expansion states than expansion states. This means we have fewer people in that non-expansion state sample. So many of our findings are kind of less precise.
00;13;51;26 - 00;14;14;08
Dr. Kate Bundorf
They're a little bit noisier. It's hard for me to say things with confidence that, you know, this is, you know, the exact estimate given that qualification. I would say it does look like coverage also increased in the non-expansion states. And it seems like it's a combination of E.S.I., employer-sponsored insurance, and other types of public coverage.
00;14;14;15 - 00;14;27;14
Dr. Kate Bundorf
You know, but once again, those are, you know, if your readers go back to the paper and look at it, you know, they can see the confidence intervals on those estimates and they are a little bit less precise. And so it's a little harder to stand on them.
00;14;27;22 - 00;14;46;29
Alan Weil
So part of the context is changes that were made prior to the COVID pandemic, the existence of the Medicaid expansion. But then we also put into place a number of policies directly as a result of COVID. And it seems like those also have an effect on who loses coverage and who gains coverage. Can you say a little bit more about those policies as well?
00;14;47;01 - 00;15;16;07
Dr. Kate Bundorf
So there were a range of policies that were put in place during the pandemic to kind of bolster, you know, those mechanisms that we had already put in place through the Affordable Care Act. Probably one of the most notable ones was related to Medicaid. So states in exchange for receiving more generous matching for their Medicaid enrollees, agreed to allow people to stay on Medicaid.
00;15;16;07 - 00;15;48;09
Dr. Kate Bundorf
Essentially, they couldn't they couldn't require people to leave their Medicaid coverage. So that was important. And, you know, all states took the federal government up on this offer. So it was important in expansion states as well as in non-expansion states. But I think it was particularly important in expansion states because they have larger Medicaid populations and they have a population of Medicaid enrollees who are kind of less sick on average because they extended it to all low income adults in the state.
00;15;48;17 - 00;16;07;20
Dr. Kate Bundorf
So the composition of the populations is a little bit different across those, you know, expansion and non-expansion groups. Right? So I think that's another reason why we found this clear evidence of the increase in Medicaid or, you know, publicly subsidized coverage more generally in states that had expanded Medicaid.
00;16;08;00 - 00;16;29;26
Alan Weil
Reading the paper, having that conversation with you, I'm trying to look forward. We've been as you said earlier, this was sort of an experiment. We didn't really know how these, either of the preexisting policy changes that had never been in place since a prior recession or the ones put into COVID, how they would play out. We don't have the final story, but we certainly have a part of the story.
00;16;31;01 - 00;16;55;14
Alan Weil
So let's go forward a year or two. Let's imagine that the economic recession has played itself out. We're back to whatever we might call a sort of normal economic dynamics. When you think about what you found here and you put it in the context of other work that you and others have done. What's your sense about the future of employer-sponsored insurance,
00;16;55;14 - 00;16;58;16
Alan Weil
In a more typical economic context?
00;16;59;01 - 00;17;26;14
Dr. Kate Bundorf
I think I'm going to break that kind of into a short term and a little bit longer term in terms of comments on employer-sponsored health insurance. One thing I want to emphasize that I didn't really talk about was, you know, a third finding that we had in the paper was that we looked at employment among people with Medicaid and the extent to which it's changed not only during our study period, but from the very beginning of the pandemic.
00;17;26;24 - 00;18;06;14
Dr. Kate Bundorf
And what we found there is that people who were on Medicaid in expansion states over time were increasingly likely to report that they had any employment in the last seven days. So what does that mean? That means that people on Medicaid in expansion states were more likely to be working as time went on. And I think, you know, if you start to think about it, this is, you know, kind of consistent with, you know, an idea that the labor market was improving, People were able to find different types of employment and you did not have to leave their Medicaid, you know, as their income did not have to lose their Medicaid coverage as their
00;18;06;14 - 00;18;29;06
Dr. Kate Bundorf
income went up. Right? So when I think about things going forward, you know, we now know that the public health emergency or at least this part of the public health emergency will end and people in that states will be able to start doing their redeterminations starting in April. And gradually the matching rate will phase out over time.
00;18;29;28 - 00;18;51;20
Dr. Kate Bundorf
This is important in thinking about employer-sponsored coverage. When we think about Medicaid redetermination and people who don't have coverage anymore, we really want to kind of move them into different sources of coverage for which they're eligible. For some people, that might be employer-sponsored coverage, so they might move into that system for other people it might be coverage through a marketplace.
00;18;51;29 - 00;19;15;05
Dr. Kate Bundorf
And this will be, you know, pretty complicated. And I think we'll have to help people work on that. So that's kind of in the short term, thinking about employer-sponsored coverage. And maybe because more people are working, particularly in states that expanded, it may serve as a source of coverage for those who lose their Medicaid. I think there's also another context here in thinking about employer-sponsored health insurance in the future.
00;19;15;13 - 00;19;39;23
Dr. Kate Bundorf
When I look at employer-sponsored health insurance during the pandemic, it was kind of remarkably resilient. Right? Especially due to the things that we talked about, you know, the history that we talked about in the beginning of the show here. I don't think that we can necessarily assume that for future economic downturns, as we talked about, this downturn was very unusual.
00;19;40;05 - 00;20;08;06
Dr. Kate Bundorf
As we probably all know. You know, it was very sudden and the types of people who were losing their jobs were very different. It was a very unusual situation. So as we go forward and we are faced with, you know, maybe another economic downturn at any point in time, we'll really have to, we may see are the things that we set up in the Affordable Care Act tested more severely.
00;20;08;16 - 00;20;32;25
Dr. Kate Bundorf
If more people lose their jobs, more people lose employer-sponsored health insurance, they're going to really rely even more on the net on Medicaid program and state programs and states that had expanded or ACA exchanges. So I think that, you know, for the next recession, the jury is still out and we have to really pay close attention on how well those supports are helping folks during an economic decline.
00;20;33;09 - 00;21;14;29
Alan Weil
Well, as a policy journal, I guess I am inclined to ask my last question of you along these lines, given what you just said, given that the public health emergency and the cessation of termination for Medicaid can't go on forever, but that employer-sponsored insurance is the dominant form of coverage still, are there policies that you think we should be thinking about before the next recession that might make it more likely that the next test that we face, even though we don't know exactly what the shape of that test will be, will show that the system can be sustained?
00;21;15;09 - 00;21;38;21
Dr. Kate Bundorf
Yeah, I mean, I think there are a couple of things to think about. So one is, you know, kind of a researcher/policymaker view. One of the things that we really lacked during this pandemic was just information, like information on who had what type of coverage and what they were, you know, who was losing their coverage, You know, who are the people that actually needed help the most.
00;21;39;02 - 00;22;03;09
Dr. Kate Bundorf
Right. So one kind of, I don't know, call it like techie kind of thing to think about is like, can we create, in this very fragmented health insurance system that we have, can we create better ways to really track what's happening not only to people with public coverage, which, you know, we had a decent sense of, but also people with private coverage, you know, through an employer.
00;22;03;09 - 00;22;27;20
Dr. Kate Bundorf
So we have better real time tracking so we can kind of deliver help where it's needed more effectively. And then I would say, you know, we have to focus on people who are losing health insurance. Like if we know who's losing health insurance, then we would like to know how to help them. It's pretty complicated. You know, there are sets of rules that if you lose a particular type of coverage, you can get other types of coverage.
00;22;27;28 - 00;22;58;27
Dr. Kate Bundorf
But as you know, many of us are familiar with those rules are complicated and the systems that we have for people to enroll in coverage are complicated. So I think responding better or responding more, you know, more aggressively in the next recession is in part about, you know, really thinking about how to make it easier to sign up for health insurance, understand what your coverage options are, and making people more aware of those options that they have.
00;22;59;11 - 00;23;23;04
Alan Weil
Well, Dr. Bundorf, thank you for the analysis you did here and helping bring it to life and giving us a sense of both what the unknown dynamics were, and in the second year of the pandemic, as well as some things we might do to handle the future better. I appreciate your work in this area. Thank you so much for being my guest on “A Health Podyssey”.
00;23;23;12 - 00;23;24;28
Dr. Kate Bundorf
Great. Thank you so much for having me.