This article was updated in August 2020.


Since May, when this article was originally written, jobless claims had continued on a downward trend that tracked with a decrease in the prevalence of new COVID cases. Unfortunately, new COVID cases have trended back up sharply in the past few weeks with some parts of country experiencing record high new case counts. Predictably, jobless claims also reversed their declines, with the week of July 18th showing the first increase since March 28th. Through July 25th, over 54 million Americans have filed jobless claims.


Unfortunately, job loss will impact many beyond income insecurity: Some of these workers and their families will also experience significant disruption in their health insurance coverage. With 52% of Americans relying on employer-sponsored health insurance, many will find themselves in need of new coverage.


As members exit commercial plans and explore coverage options, they face the high costs of COBRA or the complex enrollment processes of the ACA and Medicaid. ZS projections show that these obstacles will drive a significant rise in the uninsured (around 21 million newly uninsured) and, ultimately, an increased reliance on government programs via ACA (with a peak increase of four million members) and Medicaid (a peak increase of 16 million members). Ultimately, commercial plans will not return to pre-COVID-19 enrollment levels in 2021.

We regularly hear that the pandemic will usher in a new normal, albeit a normal that morphs along with our understanding of COVID-19. But how can health plans properly plan for this new normal when “normal” keeps changing? To answer that question, we modeled the impact of COVID-19 on health plan enrollment over the next 18 months. Our model incorporates current data to inform two key questions and their underlying complexities:

  • How will COVID-19 impact employment over time?
    • Which industries and states are the most impacted?
    • What is the speed and magnitude of recovery for each state based on unemployment claims and reopening dates?
  • How do changes in employment impact lines of coverage?
    • What was the coverage situation before the pandemic?
    • How will state-by-state variations in areas like Medicaid expansion and ACA exchange statuses change enrollment flows?

The answers to these questions allow us to quantify COVID-19 impact and identify which states may be disproportionally affected. This information can help inform how health plans adapt to the COVID-19 normal.


While our model covers all lines of coverage, we want to focus primarily on commercial variations across state and industry, ACA coverage and Medicaid coverage. Here’s a look at some of the projections from our model:


States: COVID-19 will inflict significant changes to commercial group coverage over the next 18 months, regardless of geography. While some states like Nevada and Florida will likely experience disproportionate impact, even low-impact geographies like Washington, D.C., and Virginia may see a 15 to 20% decline in members covered by commercial plans.


Industries: Groups like government employees or professional services workers are unlikely to be as impacted, but those employed in travel, leisure and entertainment will likely face significant coverage changes. In a previous blog, we highlighted the impact of COVID-19 on quoting data and employee benefits. Additional data points from ZS’s syndicated B-to-B demand study confirms the widespread changes that we’re seeing:

  • Small businesses were the first to struggle with prospect demand (down 40% for the four-week period ending April 18th)
  • Though delayed compared to small businesses, large business demand has also been impacted, with demand down 13% since the week ending March 28th
  • This is happening across all geographies

Lines of coverage: Looking beyond commercial group insurance, health plans with a large ACA presence should prepare for even heavier churn than usual, likely topping 50%. We project that ACA plans will experience an outflow of more than six million members into Medicaid and the uninsured ranks as employees in the gig economy or those without employer-sponsored healthcare coverage lose their primary sources of income. While this outflow is staggering, the anticipated shifts from commercial and COBRA coverage will result in a four million net increase in ACA members compared to pre-COVID-19 levels. While federal subsidies for COBRA, much like those enacted by the American Reinvestment and Recovery Act of 2009, would somewhat blunt commercial group enrollment losses to ACA plans, additional federal or state government subsidies to ACA premiums and cost-sharing could cause the numbers to climb even higher. We’re already seeing a push for increased subsidies, but the impact is still uncertain.

Considering the massive disruption, health plans should turn their focus to retain existing members in the near term and prepare their organization to succeed in the new normal—no matter what that might be.


Customer retention: In the near term, commercial group enrollment will continue its industry-wide downward trend. The projected length of the recovery, coupled with the number of employers permanently ceasing operations, will require health plans to focus on member and group retention; in the near term, growth will be extremely challenging.


To cope with the forecasted industry disruption, health plans need to fully embrace a customer-centric approach across stakeholders—members, employers and brokers. For instance, now is an opportune time to implement or enhance existing “feedback loops” with brokers and consultants via listening sessions, roundtables or other similar forums. The outreach demonstrates concern for their businesses, acknowledges their value, and cements crucial business relationships. Additionally, these sessions provide health plans critical intelligence and leading indicators of changes in industry trends, such as the first signs of recovery. To complete the loop, findings should be synthesized and shared across the sales force.


Future sales growth: Of the newly jobless in April, 78.3% identified their unemployment as temporary, presenting a possible means to capture members as they return to the workforce.


As the nation’s economy improves, plans will need to refocus their sales teams on the segments that reemerge the earliest. Employers will return to the market with new perspectives on health insurance; sales forces will need to improve the agility of their execution models to adapt to the new landscape.


To identify these market trends and opportunities, health plans should broaden their monitoring and forecasting capabilities. This includes identification and weekly—or even daily—tracking of key metrics such as quotes and win rates by segment, industry or other relevant characteristics. The resulting data foundation provides the basis for more insightful forecasts, advanced analytics and opportunity identification.


Similarly, grounded sales teams can pivot and elevate profiling of brokers, existing accounts, target prospects and other key stakeholders. This exercise can establish new, data-driven habits that benefit the sales force and the organization overall.


We are already in the middle of this rapid change to the health insurance landscapes with 30-plus million members leaving the commercial markets, according to our model. Given that this commercial business is not projected to fully return until after 2021, health plans must act immediately to mitigate the potential damage. These efforts to retain customers and improve sales intelligence capabilities will put plans in a stronger position to accelerate their recovery as the nation reopens.