The Centers for Medicare and Medicaid Services recently released data showing the impact of the coronavirus on Medicaid enrollment from February, 2020, to June, 2020. (here) No surprise that with the economic lock down, unemployment skyrocketed. Nationally, the unemployment rate increased by over 200 percent and in Washington state the number increased by 150 percent.

The majority of these newly unemployed also lost their health insurance, which had been paid by their employers.

Medicaid began in 1965 as a safety-net health insurance plan for low-income families with children, for the disabled, and for some long-term care. The entitlement expanded with Obamacare to any low-income, able-bodied adult whose age is between 18 and 65.

With the spike in unemployment and the concomitant loss of wages and health insurance, the Medicaid roll likewise spiked. Nationally, total Medicaid enrollment increased by 5.7 percent from February to June, 2020. The child part of Medicaid, the Children’s Health Insurance Program, increased by only 0.4 percent, whereas the adult enrollment increased by 6.2 percent.

During the same time period, unemployment in Washington state increased by 150 percent and Medicaid increased by 4.5 percent to 1.78 million people. In other words, almost one in four Washingtonians are now enrolled in the Medicaid entitlement.

Medicaid was designed originally as a government safety-net, so an argument can be made the during this pandemic the entitlement is serving its purpose. On the other hand, the tragedy is that for half of all Americans, their health insurance is tied to their employment. This seems OK as long as they have a job, but as we have seen, it is not very good when jobs are lost.

A much better plan would be to eliminate employer-paid health benefits, allow workers to take the same tax deductions for the purchase of health insurance that employers can now take, and expand the individual health insurance market. This would eliminate the distortion caused by a third party, the employer, paying for health benefits, while giving individuals more choices and more control over their own health care. (here)