Our health insurance system is pretty strong for one built on private markets. Still, it is not perfect. Unfortunately, the COVID-19 pandemic has exposed some of the systemic weaknesses of our system. Chief among them is affordability. The pandemic has shined the light brightly on what happens when insurance is not affordable.
A study conducted in early May 2020 showed that some 21 million people were unemployed in the US. When you consider that more than half of American adults get their health insurance through their employers, it becomes apparent just how many may have lost their insurance along with their jobs.
The final numbers will not be known for some time. But it is safe to say that losing your health insurance due to unemployment is made that much worse if you cannot afford to buy an individual policy on the amount of money available from unemployment insurance.
Health Insurance and Premium Hikes
We have known for quite some time that affordability is a problem with our system. Every year brings premium increases for both employers and employees alike. In some years, the increases are double-digit increases the present even more affordability problems for cash-strapped Americans. So what does the future hold?
Another survey just released by The Manifest suggests that employers put a greater emphasis on health insurance as a benefit to attract new talent. That survey assumes the fact that a return to work over the next weeks and months will force employers to offer stronger benefits packages at hiring time.
Such assertions seem credible on the surface. But there is one potential monkey wrench in the works: companies suffering their own financial problems even though they are hiring again. Remember that the COVID-19 pandemic did not just cost jobs, it also cost companies revenues. There will undoubtedly be those looking to hire who, at least in the short term, cannot afford to offer health insurance.
Health Insurance in the Long Term
None of this changes the fact that health insurance was at the top of the list of employee benefits at the start of the year. Companies looking to strengthen their benefits packages were looking at ways to improve their health insurance packages prior to the pandemic’s onset.
In the long term, health insurance is still likely to be the number one benefit for American employers, according to Dallas-based BenefitMall. But how much of the benefit will be paid for by employers remains to be seen. We might be looking at a situation in which employers demand that carriers find a way to bring rates down somehow.
We might also see a gradual transition away from traditional health insurance in favor of employers self-insuring. Larger corporations are already more likely to self-insure if they have the financial resources to do so. Yet it is not out of the realm of possibility for smaller employers to work out deals with healthcare providers and local networks in order to self-insure at a lower cost.
It Won’t Get Any Easier
The COVID-19 pandemic has once again reminded us of the questionable affordability of health insurance among people who are either unemployed or working jobs that do not offer healthcare benefits. The thing is that it will not get any easier as time marches on.
The U.S. population continues to age. Moreover, the first wave of baby boomers is now entering retirement. And with people living longer, they are accessing healthcare delivery for longer as well. This means greater stress on Medicare, private health insurance providers, and the whole system in general. None of it will make health insurance any more affordable.