Health insurance coverage expected to decrease

By Tim Brown

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Record numbers of people have been filing for unemployment benefits across the state because of the COVID-19 pandemic, and many of them could eventually lose their health insurance. When someone without health insurance needs medical care, counties and hospital districts often end up paying for that treatment under their requirements to provide indigent health care.

Due largely to pandemic-related unemployment claims, April's national jobless rate reached 14.7%, and the figure is certain to continue growing. In May, economists at investment bank Goldman Sachs projected that the U.S. unemployment rate would peak at 25%. At about the same time, the Kaiser Family Foundation (KFF) released a study that looked at the potential loss of health insurance by people who lost their jobs between March 1 and May 2. The study estimates that more than 1.6 million Texans who lost their jobs during this period will also lose their employer-sponsored insurance.

Not everyone who loses a job will become uninsured. Some will find insurance with a new employer. Others may qualify for Medicaid (the KFF study estimates that 328,000 of the 1.6 million Texans will qualify) or may be able to purchase health insurance through the marketplace. Continuing with their former employer's health plan under provisions of the Consolidated Omnibus Budget Reconciliation Act (COBRA) will be an option for those who can pay for it, although it can be more expensive than the other options. Some people will decide to purchase short-term health insurance plans.

We don't yet know exactly how many people who lose their jobs because of the pandemic will end up without health insurance — those estimates will take time to develop. But looking at the estimates for a period before the beginning of the pandemic can provide a starting point for the discussion.

Luckily, the U.S. Census Bureau's Small Area Health Insurance Estimates (SAHIE) program provides annual calculations of how many people don't have health insurance by county; however, the most recent SAHIE figures are for 2018.

Map 1 shows the SAHIE estimates for the percentage of the population under 65 years old without health insurance in 2018. Borden County, southeast of Lubbock, has the distinction of having the lowest figure, at 11.3%. At the other end of the spectrum, 39 counties exceeded 25% uninsured as revealed by the two darker brackets. As in previous years, many of the counties with the highest rates of uninsured are found along the international border and in the Panhandle.


The SAHIE program also produces estimates of the percentage of the population without health insurance under 19 years old as seen in Map 2. Two facts stand out about those estimates.

First, the figures cover a much smaller range than those for the general population. The under 19 estimates reach 20% in only nine counties and stay at 10% or lower in 37 counties. The lowest figure shows up in Bell County, at 6.7%.

Second, in Map 2, the counties along the international border show a distinct improvement over Map 1. Only two of the 34 counties where estimates exceeded 16% can be found along the border. The rest appear scattered mostly from the Hill Country across West Texas to the Panhandle. Curiously, every Panhandle county that borders Oklahoma falls into the over 16% bracket — except for Childress County, which borders Oklahoma's southwest corner. Childress County, with an estimated 12.2%, falls close to the median of 12.4% for all 254 counties.

As might be expected, the percentages increase significantly for those in poorer income groups. Map 3 shows the estimates for the under 65 population living on less than 200% of the poverty level. If you look only at the counties in the highest and lowest brackets, Map 3 is fairly similar to Map 2. For example, many counties in the broad swath from the Hill Country to the Panhandle stand out in both maps.

But, at 200% of the poverty level, Map 3 includes many people who are not living in poverty. For a family of four, the 2018 poverty guideline was $25,100, according to the U.S. Department of Health and Human Services. Twice that amount is $50,200, which is relatively close to the statewide 2018 median household income of $60,632.

Although not included in this article, the SAHIE program also produces estimates of the percentages of the population without health insurance at several other multiples of the poverty level: 138%, 250% and 400%.

While recent estimates of the number of people in Texas without health insurance are not available, recent unemployment rates are. The Texas Workforce Commission has county unemployment rates for March 2020. However, Map 4 shows the annual unemployment rate by county for 2018 — the same period as the health insurance estimates. Since the March 2020 rates are based largely on data from before most of the COVID-19 job losses, a map of the March 2020 unemployment rates would be virtually identical to Map 4 and therefore isn't included in this article.

While higher percentages of the uninsured occurred mostly in the western half of the state, many of the counties with high unemployment rates are in the eastern part in a wide swath along the Louisiana border. In fact, virtually the entire eastern half of the state has high unemployment rates, which are scarce in a group of counties that include Austin and San Antonio and that are linked to the Eagle Ford Shale. That may be about to change.

In April, BW Research Partnership noted that the energy industry lost 303,500 jobs in March and projected that the energy sector could lose as many as 1.5 million more jobs in the following months. In May, a review by The Texas Tribune found that in some counties the oil and gas sector accounted for more than half of the unemployment claims filed from March 15 to April 25.

Also in May, the U.S. Bureau of Labor Statistics reported that the national unemployment rate for April reached 14.7%. However, the agency suggested that the true unemployment rate was around 19.7%, because many people who should have classified themselves as furloughed were misclassified.

On May 20, the Federal Reserve Bank of Dallas projected that capital expenditures by the industry would "decline by an additional 30% from previously announced levels and are likely to fall further, consistent with a sharp reduction in oil investment in 2020." At the time, West Texas Intermediate crude oil traded at over $33 per barrel, well above the negative prices seen earlier in the month, indicating that prices will have to rise even further to reverse declining expenditures. If the projections pan out, more workers will lose their jobs in oil and related industries, and individuals previously laid off in those industries will not be rehired anytime soon.

Fortunately, about 80% of the 18 million unemployed Americans are furloughed and didn't necessarily file for unemployment; technically, furloughed individuals are only temporarily unemployed and can expect to be rehired by their former employer. Of course, that depends on the businesses reopening. Assuming they do reopen, the Congressional Budget Office has projected that the unemployment rate will fall to 11.7% in the fourth quarter of this year and to 10.1% in 2021.

No matter how high the unemployment rate goes, the expectation is that it will stay elevated for an extended period, even if there is no second spike in COVID-19 cases. Naturally, not all of the people who lose their job will lose their health insurance, but many will, and many of them will have dependents who will also lose their health insurance. Consequently, counties and hospital districts can expect to see an increase in the number of people qualifying for indigent health care.