As the Pandemic Eases, What Is the State of Health Care Coverage and Affordability in the U.S.?

To shore up an economy and health system battered during the COVID-19-induced recession, the U.S. Congress passed four major relief bills in 2020 and 2021. The Biden administration also made a number of administrative changes, including some aimed at helping people enroll in health insurance coverage.

After a year of severe job market disruption combined with a massive federal pandemic relief effort, what is the state of health care coverage and affordability in the United States?

To answer these and related questions, the survey research firm SSRS interviewed a random, nationally representative sample of 5,450 adults ages 19 to 64 from March 9 through June 8, 2021. This brief reports on the survey’s findings about current uninsured rates, pandemic-related coverage loss, and Americans’ ongoing struggles to pay their medical bills.

Highlights

• About 10 percent of adults ages 19 to 64 were uninsured during the first half of 2021. Rates were higher among Latinx/Hispanic and Black adults compared to white adults.
• Six percent of working-age adults reported they lost their employer health coverage because of job loss related to the pandemic; of those, 67 percent gained other coverage.
• Just under half of respondents reported they had been directly affected by the pandemic in at least one of three ways: getting COVID-19, losing income, or losing employer coverage. One-third reported lost income.
• More than one-third of insured adults and half of uninsured adults reported they had problems paying medical bills or were paying off medical debt during the prior year. These rates were similar to those found in Commonwealth Fund surveys fielded prior to the pandemic.
• People directly affected by the pandemic reported having medical bill and debt problems at higher rates than those not directly affected.
• Among respondents with medical bill and debt problems, 35 percent used up all or most of their savings, 35 percent took on credit card debt, 27 percent had been unable to pay for basic necessities like food or rent, and 23 percent delayed education or career plans.

Survey Findings

The survey indicates that the uninsured rate among people ages 19–64 in the first half of 2021 was 9.9 percent, a rate below those recorded in 2020 and 2019 in both federal and private surveys. Because the estimate has a margin of error of +/– 1.15 percent, the true estimate is likely between 8.9 percent and 11.1 percent.¹ Uninsured rates were highest among people with low income, adults under age 50, and Latinx/Hispanic adults. Latinx/Hispanic and Black adults had higher uninsured rates than white adults.

See the box below for insights on why the U.S. adult uninsured rate may be falling.

The COVID-19 pandemic triggered a deep economic recession that left millions of people unemployed and raised concerns that millions would also lose their job-based health coverage. But early Commonwealth Fund survey research and estimates based on federal data and unemployment claims suggested that coverage losses were relatively small.⁸

In this survey, we checked in with respondents again, finding that about 6 percent of working-age adults lost job-based coverage — whether through their own or that of a spouse, partner, or parent — since the pandemic began. Of these individuals, 67 percent gained coverage elsewhere. One of five who lost coverage got insured through another employer plan and the same percentage elected COBRA.

The Affordable Care Act’s coverage expansions also acted as an insurance safety net: 16 percent of people who lost coverage enrolled in Medicaid and 9 percent purchased a plan through the marketplaces.

Gaps in health insurance can leave people exposed to high medical bills and prevent them from getting health care when needed. That’s why people need an easy way to transition to a new source of coverage during a major life event or an economic shock. Last year we saw just how important it is to have this flexibility.

The survey asked respondents who had lost job-based coverage and did not get COBRA how long they were without insurance. More than half (54%) experienced a brief coverage gap of three or fewer months. But about 30 percent didn’t gain insurance until after four to 11 months, and 16 percent were uninsured for longer than a year. Even short gaps in coverage can leave people exposed to catastrophic health care costs, whether from COVID-19 or some other serious medical event.

The economic shutdown had a more devastating impact on certain sectors of the economy compared to others. The service industry, including restaurants and travel-related businesses, was particularly hard hit.⁹ Black, Latinx/Hispanic, and lower-income adults disproportionately work in such jobs. These groups were more likely to report having lost income than white or higher-income adults.

Given the economic and health crises of the past year, the survey asked Americans a series of questions about their medical bills during that time — a key measure of health care affordability the Commonwealth Fund has tracked in previous surveys.¹⁰

We find that the share of Americans who had difficulties with medical bills in 2021 is similar to the rates reported in Commonwealth Fund surveys conducted in 2018 and the first half of 2020.¹¹ More than a third (38%) of adults reported that over the prior 12 months they or a family member had problems paying medical bills, had been contacted by a collection agency about unpaid bills, had to change their way of life to pay their bills, or were paying off medical bills and debt over time. Although uninsured people reported medical bill problems at the highest rates, 64 percent of respondents with a medical bill or debt problem said they or the family member who incurred the bill had been insured at the time (data not shown). A third of those with debt said they were paying off $4,000 or more (data not shown).

In asking people about their experiences during the pandemic, just under half reported they had been directly affected in at least one of three ways:

• testing positive or getting sick from COVID-19
• losing income
• losing employer coverage.

The most frequently cited problem was lost income. Some people experienced more than one problem: for example, 23 percent reported only losing income, 5 percent reported losing income and getting COVID-19, 4 percent lost income and their employer coverage, and 1 percent had all three problems (data not shown). Black and Latinx/Hispanic adults and those with lower incomes reported at least one of these effects at higher rates than white adults and those with higher incomes (data not shown).

We did not specifically ask people who reported any one of these pandemic effects whether they had medical bill or debt problems as a result. But the survey indicates that this group of people also reported higher rates of problems with medical bills and debt than people not affected by the pandemic in these ways. Stratification by income and race/ethnicity suggests medical bill problems were more common among those affected (data not shown). People who lost income reported medical bill problems at the highest rates, especially those who also tested positive or became sick with COVID-19 or lost coverage.

People covered by either public or private insurance at the time of the survey reported problems with medical bills or debt (some may not have had coverage for the full year). For people with low income who are enrolled in Medicare or Medicaid, even small bills related to premiums, deductibles, coinsurance and copayments, or uncovered health services can place a strain on limited budgets. Especially at risk are nonelderly adults who are enrolled in Medicare because of a disability or severe illness — a group that includes some of the sickest and poorest people under age 65. And while federal Medicaid rules cap the amount of money that enrollees can spend on premiums and out-of-pocket costs, there is much variability by state.¹²

Private insurance, both individual-market and employer group plans, often feature significant cost-sharing. Plans requiring deductibles have become more common, and the size of deductibles has grown as well, leaving increasing numbers of privately insured people exposed to potentially high costs.¹³ In addition, consumers frequently face coverage denials, out-of-network surprise bills, billing mistakes, and confusing contract language regarding which services are covered or excluded.

The ACA’s minimum benefit requirements and preexisting condition protections, along with cost-sharing subsidies and limits on out-of-pocket costs, have significantly improved the coverage offered by plans sold in the individual market. But the greatest protections are aimed at people with the lowest incomes and are far less extensive for people farther up the income scale.

Even when stratifying by income level, medical bill problems were more common among Black adults compared to white adults (data not shown).

For many Americans, medical bill problems and debt are undermining economic, food, and housing security and hindering educations and careers.

Policy Implications

The survey findings provide a glimpse of insurance coverage in the United States during one of the most challenging economic periods in recent history. Its findings suggest that federal relief efforts to help people maintain their Medicaid coverage, combined with state and federal efforts to encourage people to enroll in the ACA marketplaces and in Medicaid, may have offset pandemic-related, job-based coverage losses. These public policies also may have helped lower the uninsured rate below prepandemic levels.

But the findings also show that large shares of adults continue to suffer financially when they get health care, even if they are covered by Medicare, Medicaid, or private insurance. The people most affected are those with low income and those who are Black or Latinx/Hispanic.

The findings on medical bill problems and their consequences — from ruined credit ratings to the inability to afford basic life necessities — are in line with past Commonwealth Fund surveys. People who suffered the most during the pandemic also suffered the most from medical bill problems. But the overall rates of problems reported in the survey for the past 12 months are similar to those reported by adults prior to the pandemic. This consistency suggests that cost burdens are a chronic aspect of U.S. health care that that may be exacerbated by economic and health crises, and ultimately undermine America’s overall economic well-being.

The historic No Surprises Act, which is set to go into effect in January 2022, will protect most consumers from surprise medical bills from out-of-network providers and some emergency transportation providers.¹⁴ What additional policies are needed to protect consumers?

Insure more people:

• Make the temporary American Rescue Plan marketplace subsidies permanent to potentially reduce the number of uninsured by 4.2 million in 2022.¹⁵
• Provide Medicaid-eligible adults in the 13 states that have not yet expanded their program a federal insurance option to cover an estimated 2.3 million uninsured people.¹⁶
• Ensure that the millions of people who maintained their Medicaid coverage under the Families First Coronavirus Response Act don’t lose it at the end of the COVID-19 emergency. Federal and state policymakers also could consider adjustments to stabilize Medicaid coverage.¹⁷
• Develop an autoenrollment mechanism to help people enroll and stay enrolled in comprehensive coverage. Creating a public plan as a default option would be essential to a national autoenrollment program.¹⁸

Make health insurance more comprehensive:

• Rein in deductibles and out-of-pocket costs in marketplace plans. A bill introduced by Senator Jeanne Shaheen (D–N.H.) could eliminate deductibles for some people and reduce it for others by as much as $1,650.¹⁹
• Combined with the reduction in deductibles and out-of-pocket costs, fix the “family coverage glitch” and lower the “employer firewall” threshold to make this better coverage available to more people currently in employer plans. Under current law, people in single-coverage employer plans with premiums that exceed 9.8 percent of income are eligible for subsidies through the marketplaces. Lowering this “firewall” affordability threshold for employer plans to 8.5 percent (the American Rescue Plan’s out-of-pocket premium cap) and fixing the coverage glitch to make this threshold apply to premiums in both single and family policies would mean that no one would have to spend more than that for their health insurance.²⁰
• Standardize and simplify health plans sold in the marketplaces to make it easier for consumers to understand which health services are covered.
• Investigate the increasing reports of coverage denials in the individual market and improve the ability of consumers with public or private insurance to contest these denials.²¹
• Lower the often-high prices that private insurers pay to hospitals to help reduce premiums and deductibles. This could be pursued by adding a public plan option to the marketplaces, among other approaches.²²

The U.S. Supreme Court’s recent decision reaffirming the constitutionality of the Affordable Care Act paves the way for Congress to use the tools provided by the health law to not only cover the remaining uninsured but to finally make health care in the U.S. affordable to all. Doing so will be essential to the country’s postpandemic recovery and its future prosperity.