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COVID-19

With fewer people on health insurance, health care jobs could be in jeopardy, report says

Sabri Ben-Achour, Rose Conlon, Erika Soderstrom, and Alex Schroeder Aug 4, 2020
Heard on: Marketplace Morning Report
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In the middle of the COVID-19 pandemic, reduced revenue to health care providers made up 29% of the historic second-quarter GDP decline. Chip Somodevilla/Getty Images
COVID-19

With fewer people on health insurance, health care jobs could be in jeopardy, report says

Sabri Ben-Achour, Rose Conlon, Erika Soderstrom, and Alex Schroeder Aug 4, 2020
In the middle of the COVID-19 pandemic, reduced revenue to health care providers made up 29% of the historic second-quarter GDP decline. Chip Somodevilla/Getty Images
HTML EMBED:
COPY

About 5.4 million Americans lost their employer-sponsored health plans, and did not or could not get alternate health insurance. That’s a risk in and of itself, but it may result in job loss in the health care industry.

That’s the warning from the nonpartisan nonprofit Families USA, which is out with new research Tuesday. Stan Dorn, a senior fellow at Families USA, is the author of the report. He spoke with Marketplace’s Sabri Ben-Achour, and the following is an edited transcript of their conversation.

Sabri Ben-Achour: U.S. GDP declined 9.5% in three months and one would have thought perhaps the bulk of that was in restaurants or transportation. But, according to research, it was actually health care.

Stan Dorn: Yes, we were surprised to find that 29% of the entire staggering drop in GDP, the second quarter was due to reduced revenue for health care providers. By contrast, in the entire restaurant industry — food services, accommodations, hotels industry — 17% of GDP drop was [caused by] that sector. There was no other engine driving the downturn as much as health care.

Ben-Achour: Which is kind of surprising, because we hear about the surges in the need for emergency care as coronavirus peaks in different parts of the country. But that’s not what we’re talking about, is it? Who are the folks who are losing their jobs here?

Dorn: So far, we’ve lost more than a million jobs in the health care sector, which is more than any other sector but the restaurant industry, but even so, the amount of money involved is greater by far than the restaurant industry. So, we’re talking about hospitals, doctors offices, clinics, having to lay off staff. Nurses, janitors — 1 out of every 7 workers in the United States is employed by the health care industry. So when the health care industry sneezes, the whole economy catches a cold.

Ben-Achour: What you’re describing is what the health care industry is suffering from just the shutdown. What are you predicting will happen because people have lost their health insurance coverage?

Dorn: What we’ve seen so far is just the the prelude to what we’re afraid may happen soon. In the past, less revenue for health care providers has translated into a staggering drop in GDP. What we found is that health insurance losses projected to result from even an economy that remains stable at many levels will cost another 1.5 million to 2.5 million jobs. As hospitals, doctors offices, clinics lose money, they have to lay off staff, and that hurts the surrounding local economies as well.

Ben-Achour: But, I mean, couldn’t people who lose their job-sponsored health insurance get Medicaid or something under the Affordable Care Act?

Dorn: Sure, and many will. But not all will. Lots of folks who qualify for help won’t sign up. That’s happened before, we know it’s going to happen again. There are two changes. One, fewer patients will have insurance of any kind, and, two, patients who do have insurance will have it in a form that pays less to health care providers. Medicaid, for example, pays a lot less than private health insurance.

COVID-19 Economy FAQs

What does the unemployment picture look like?

It depends on where you live. The national unemployment rate has fallen from nearly 15% in April down to 8.4% percent last month. That number, however, masks some big differences in how states are recovering from the huge job losses resulting from the pandemic. Nevada, Hawaii, California and New York have unemployment rates ranging from 11% to more than 13%. Unemployment rates in Idaho, Nebraska, South Dakota and Vermont have now fallen below 5%.

Will it work to fine people who refuse to wear a mask?

Travelers in the New York City transit system are subject to $50 fines for not wearing masks. It’s one of many jurisdictions imposing financial penalties: It’s $220 in Singapore, $130 in the United Kingdom and a whopping $400 in Glendale, California. And losses loom larger than gains, behavioral scientists say. So that principle suggests that for policymakers trying to nudge people’s public behavior, it may be better to take away than to give.

How are restaurants recovering?

Nearly 100,000 restaurants are closed either permanently or for the long term — nearly 1 in 6, according to a new survey by the National Restaurant Association. Almost 4.5 million jobs still haven’t come back. Some restaurants have been able to get by on innovation, focusing on delivery, selling meal or cocktail kits, dining outside — though that option that will disappear in northern states as temperatures fall. But however you slice it, one analyst said, the United States will end the year with fewer restaurants than it began with. And it’s the larger chains that are more likely to survive.

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