New EHF report shows looming health insurance crisis coming to Texas after COVID-19

Analysis finds expanding Medicaid and increasing state efforts to enroll recently jobless Texans in Affordable Care Act health plans could prevent approaching crisis.

More than 1.2 million Texans have lost their health insurance after COVID-19 job losses and are now eligible to get covered through subsidized Affordable Care Act (ACA) or Texas Medicaid plans. But without state policy changes, many could lose that coverage in 2021 and the uninsured rate would likely skyrocket. That’s one of the findings of an Episcopal Health Foundation analysis of Texas job losses and health insurance eligibility released in a recent report by Kaiser Family Foundation.

“Unless changes come from Austin, there’s a looming health insurance crisis coming to the state that already has the most uninsured people in the country,” said co-author Elena Marks, EHF’s president and CEO.

EHF’s analysis found that beginning in January 2021, more than 1.1 million Texans could be part of the uninsured who become stuck in the state’s health insurance “coverage gap” – a 50% increase from 2020.  That means more than 1.1 million Texans would not be able to afford health insurance because they’ll earn too much to qualify for Medicaid in Texas and too little to qualify for subsidized health insurance offered through ACA plans. The increase in the state’s coverage gap number could push the state’s overall uninsured population to more than 5 million people.

This coverage gap only happens in states that declined to expand Medicaid under the ACA. The gap could increase substantially in 2021, as people who were once eligible for subsidized ACA plans due to 2020 income, including unemployment benefits, lose those discounts, but don’t qualify for non-expanded Medicaid.

Elena Marks

“These estimates are only related to job losses through the beginning of May, so the crisis could be much worse,” Marks said. “Policymakers need to consider Medicaid expansion or another option to extend health insurance coverage so that more at-risk Texans have access to affordable health care during this crisis. If they don’t, uninsured Texans won’t be the only ones who suffer. The costs will be passed on to doctors, hospitals, and state and local governments.”

In EHF’s latest statewide health policy poll, almost two-thirds (64%) of Texans said they support Medicaid expansion.

Right now, Texas has most people and highest percentage of residents in the health insurance coverage gap compared to any other state. Estimates show that in 2021, 27% of all Americans stuck in the coverage gap will live in Texas.

Despite the pending health insurance crisis that could come next year, EHF’s analysis also found that the unprecedented loss of employer-sponsored health insurance coverage presents new opportunities for the state to help Texans sign up for other health insurance options now.

EHF’s analysis found that 75% of the 1.6 million Texans who lost health insurance through their employers during COVID-19 are eligible for subsidized coverage through ACA or Medicaid plans. In 2019, EHF’s analysis found that those subsidies cut monthly insurance premium costs for Texas ACA enrollees by an average of 78% — from $544 to $118.

“That’s why Texas needs to expand efforts to enroll people in Medicaid and ACA plans,” said Marks. “A small investment in outreach and enrollment efforts can bring significant resources to governments, doctors and hospitals and enable more than 1 million Texans to afford health insurance now.”

EHF’s analysis was co-authored by Marks and Shao-Chee Sim, EHF’s vice president for research and evaluation. The analysis draws Texas data and information from Kaiser Family Foundation’s recent nationwide report.