Health insurance coverage during the COVID‐19 pandemic: The role of Medicaid expansion

• Published date: 01 January 2023
• Author: Bidisha Mandal,Nilton Porto,D. Elizabeth Kiss,Soo Hyun Cho,Lorna Saboe‐Wounded Head
• Date: 01 January 2023
• DOI: http://doi.org/10.1111/joca.12500

RESEARCH ARTICLE

Health insurance coverage during the

COVID-19 pandemic: The role of

Medicaid expansion

Bidisha Mandal

1

| Nilton Porto

2

| D. Elizabeth Kiss

3

|

Soo Hyun Cho

4

| Lorna Saboe-Wounded Head

5

1

School of Economic Sciences,

Washington State University, Pullman,

Washington, USA

2

Human Development & Family Science,

University of Rhode Island, Kingston,

Rhode Island, USA

3

Department of Personal Financial

Planning, Kansas State University,

Manhattan, Kansas, USA

4

Family and Consumer Sciences,

California State University, Long Beach,

California, USA

5

South Dakota State University

Extension, South Dakota State University,

Brookings, South Dakota, USA

Correspondence

Bidisha Mandal, School of Economic

Sciences, Washington State University,

111 E PO Box 646210, Pullman, WA

99164, USA.

Email: bmandal@wsu.edu

Funding information

USDA National Institute of Food and

Agriculture, Grant/Award Number:

NC2172

Abstract

Using data from the US Census Bureau's Household

Pulse Survey, we analyzed the likelihood of loss of

health insurance and enrollment into new health cov-

erage during the early months of the COVID-19 pan-

demic. Loss of employment was associated with a

significant increase in the likelihood of loss of health

insurance and, specifically, an increase in the likeli-

hood of employer-sponsored health insurance. How-

ever, individuals in Medicaid expansion states

experienced a lower likelihood of loss of health insur-

ance compared with individuals in nonexpansion

states. At the same time, there was a statistically signifi-

cant increase in Medicaid enrollment in expansion

states, by 3.2 percentage points. Reemployment or

acquiring employment was associated with a gain in

health insurance coverage. During an economic down-

turn, eligibility, and coverage gaps leave many without

affordable coverage options, and the pandemic will

likely bring renewed attention to gaps in Medicaid cov-

erage in nonexpansion states.

KEYWORDS

COVID-19 pandemic, health insurance, job loss, Medicaid

Received: 14 October 2021 Revised: 11 October 2022 Accepted: 13 November 2022

DOI: 10.1111/joca.12500

© 2022 American Council on Consumer Interests.

296 J Consum Aff. 2023;57:296–319.

wileyonlinelibrary.com/journal/joca

1|INTRODUCTION

The level of unemployment experienced by US workers due to the COVID-19 pandemic has

been unprecedented. Over 20 million jobs were lost between March and April 2020 in the

United States (Bureau of Labor Statistics, U.S. Department of Labor, 2020). While a third of

those jobs were recovered in May and June, there is much uncertainty regarding the timeline

for the full recovery of the US labor market (Weber Handwerker et al., 2020). One major job

benefit in the US labor market is the availability of employer-sponsored health insurance

(ESHI) for full-time workers in mid-to large-size businesses. However, decreased rates of ESHI

coverage during economic downturns could induce a surge in enrollment in public health

insurance programs or subsidized health care coverage among low-income households who are

considered income-eligible for public assistance by their states. While the COVID-19 pandemic

induced recession and the 2008–2009 Great Recession are not alike, both produced severe eco-

nomic downturns. The importance of Medicaid was evidenced during the Great Recession.

Between 2007 and 2009, Medicaid enrollment rates increased by 1.3 percentage points among

the nonelderly adult population, while enrollment rates in the Children's Health Insurance Pro-

gram rose by 4.8 percentage points (Frenier et al., 2020). Following the enactment of the Afford-

able Care Act (ACA) in 2012 and the state option to expand Medicaid, enrollment in the public

insurance program for low-income individuals has grown steadily.

In this study, we used survey data collected by the US Census Bureau during the first few

months of the pandemic to test three primary hypotheses. First, we hypothesized that employ-

ment loss would be positively associated with the likelihood of loss of health insurance coverage

and, specifically, the likelihood of loss of employer-sponsored coverage. Conversely,

reemployment would be associated with greater likelihood of gain in insurance coverage. Our

second hypothesis was that likelihood of health insurance loss and, specifically, the likelihood

of loss of Medicaid benefits, would be lower in states that expanded Medicaid under the ACA.

Our third and final hypothesis was that loss of employment would increase Medicaid enroll-

ment, especially in expansion states.

We found that job loss was associated with a 2.2 percentage point increase in the likelihood

of loss of health insurance overall, and with a 4.4 percentage point increase in the likelihood of

loss of ESHI coverage. On average, the likelihood of loss of Medicaid benefits was 8.3 percent-

age points lower among individuals in expansion states. Among previously unemployed individ-

uals, those who were reemployed were 7.2 percentage points more likely to gain insurance

coverage compared with those who remained unemployed. Reemployment was associated with

an increase in the likelihood of coverage through various sources, including employer-spon-

sored, direct purchase, and Medicaid. Loss of employment was associated with a 3.2 percentage

point increase in the likelihood of enrollment in Medicaid overall, and with a 3-percentage

point increase in the likelihood of Medicaid coverage in expansion states. Results of this study

emphasized the perils of health insurance coverage tied to employment and the protective role

of Medicaid in a severe economic downturn.

2|LITERATURE REVIEW

Financial risk avoidance is often cited as a reason why people purchase health insurance.

In line with the expected utility theory (Von Neumann & Morgenstern, 1944), risk-averse

consumers would be willing to purchase health coverage to protect against unanticipated,

MANDAL ET AL.297