Growing numbers of unemployed Americans face a health insurance crisis. The Urban Institute has predicted that between April and December 2020, over 10 million people will lose employer-sponsored health insurance due to the pandemic. As a result, millions are likely to enroll in Medicaid as a safety net.

COVID-19 has also demonstrated that income and racial disparities in healthcare are alive and well. Researchers have found, for example, that African Americans are dying from COVID-19 at 2.5 times the rate of whites. Individuals who are eligible for both Medicare and Medicaid are also at higher risk for more severe cases of COVID-19. This population often has multiple chronic health conditions, in addition to being low income. The Centers for Medicare and Medicaid Services (CMS) has reported that this group has been hospitalized for COVID-19 at a rate more than 4.5 times higher than individuals who are eligible only for Medicare.

All of these factors create a perfect storm of challenges for states. They must trim budgets as revenues fall, while preserving Medicaid programs for growing numbers of citizens. NASBO estimated that in fiscal year 2019, Medicaid accounted for close to 29% of total state spending. Since Medicaid represents a significant share of state budgets, experts worry that states may be forced to consider cuts to healthcare programs, services, and benefits in response to COVID-19-related pressures.

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Containing Rising Healthcare Costs in the Wake of COVID-19 - ModernHealthcare.com