Early this week, I thought that Medicaid and the ACA Exchanges will both be doing an incredible amount of heavy lifting on maintaining and expanding health insurance and health finance coverage during the pandemic. Unemployment is going to be massive and COBRA will be too expensive for many people.

Unemployment Insurance Weekly Claims

Initial claims were 3,283,000 for the week ending 3/21 (+3,001,000).

Insured unemployment was 1,803,000 for the week ending 3/14 (+101,000).https://t.co/ys7Eg5LKAW

— US Labor Department (@USDOL) March 26, 2020

There are two major Unemployment Insurance (UI) changes in the Senate bill. The first is that all eligible beneficiaries will receive a $600 per week add-on payment that is federally funded. The second is that the federal government will be paying for baseline unemployment benefits for broad, new classes of workers who traditionally are not covered by UI. The Senate bill is buying physical distancing externalities with these policies. Loren Adler of the Brookings Institute digs into the bill the Senate passed last night and found that the federally funded UI benefits are going to be counted differently for Exchange and Medicaid.

Making the increases to unemployment insurance go farther, the final COVID-19 emergency response bill disregards the new $600/week benefit for purposes of determining Medicaid/CHIP eligibility.

Base UI compensation would still count & both would count for ACA PTC determinations. pic.twitter.com/TW77FEbmqO

— Loren Adler (@LorenAdler) March 26, 2020

What this means is that a single individual who is getting the $600/week federal bump payment for the full length of the benfit will have a very hard time qualifying for CS-94. Eighteen weeks at $600 per week is 86% FPL plus whatever wages earning in the first few months of the year plus whatever other unemployment benefits that are earned as well. However, that same individual, if they live in a Medicaid Expansion state is has a decent chance of qualifying for Medicaid Expansion as their monthly countable income will be state financed unemployment insurance. If an individual is getting less than about $330 a week in state UI benefits and no other income, they are Medicaid Expansion eligible and also barely eligible for any APTC on the Exchange as the federal benefit pushes their ACA income to about 390% FPL.

In the situation where an individual is eligible for Medicaid Expansion and is also barely subsidized, the rational choice for almost everyone is to choose Medicaid Expansion as it is no premium and almost no cost sharing versus a fairly high premium Bronze plan with $6,000 or more in cost sharing.

Medicaid Expansion will be bearing more of the load than I thought at the start of the week.