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Experts and patient advocates say the coronavirus crisis reveals the urgent need to move away from an employer-based insurance system.

As many as 35 million Americans could lose their employer-sponsored health insurance in the coming months due to the economic fallout of the coronavirus crisis, according to a new report published on Friday.

The study, from research and consulting firm Health Management Associates (HMA), analyzed how the economic damage of the COVID-19 pandemic could impact health insurance enrollment in employer-sponsored coverage, Medicaid, and the Affordable Care Act marketplaces. Researchers modeled three different scenarios using different publicly reported estimates of the potential increase in the national unemployment rate. 

Under the report’s worst-case scenario, which estimated a very plausible 25% national unemployment rate, 35 million Americans would lose their employer-sponsored coverage. This loss would have substantial ripple effects on Medicaid, as the report estimates that 23 million more people will enroll in the program in the coming months. 

While most of these new enrollees will be those who lost their employer-sponsored coverage, others will have previously received coverage via the ACA marketplace. The report notes that about 60% of ACA marketplace enrollees earn between 100-200% of the federal poverty line, providing them with highly subsidized health insurance and making them more likely than other enrollees to move to the publicly funded Medicaid due to job loss.

This scenario would also explode the national uninsurance rate, leaving an estimated 39-40 million Americans completely uninsured, up from the current figure of about 29 million. While the worst-case scenario of a 25% unemployment rate may seem extreme to some, economists at the Federal Reserve Bank of St. Louis predicted in March that the unemployment rate could reach 32%

If that happens, the number of those who lose employer-sponsored could surge past 35 million.

“I think it could be higher than 35 million,” Wendell Potter, a Medicare for All advocate and former insurance company executive, told COURIER. “There’s no way of knowing how long this crisis will continue. Not only will a lot of those people be unemployed and uninsured, but there’s still a very big question mark about how many employers will actually be able to get back into hiring again and how many will actually just shut their doors for good. It’s going to be some time before we have employment back to levels where they were before this began.”

The coronavirus pandemic has already shuttered large swaths of the economy, causing the loss of at least 10 million jobs in just two weeks. An estimated 3.5 million of these newly unemployed Americans likely lost their health insurance as well, according to an analysis of state and federal data from the Economic Policy Institute. 

Even in the HMA report’s two more conservative scenarios, which estimated national unemployment rates of only 10% and 17.5%, between 12 million to 23 million Americans would lose their employer-sponsored coverage and as many as 6 million more people would find themselves newly uninsured altogether.

Losing health care during a pandemic is, for obvious reasons, not ideal. Congress recently passed legislation guaranteeing free coronavirus tests to all Americans, but many are still struggling to obtain tests amid the nationwide testing shortage. And while tests may be covered, treatment itself can be incredibly expensive, especially if you’re uninsured. Last month, an uninsured Boston-area woman was charged nearly $35,000 for her treatment.

“The employer-based system has been crumbling for a long time and no one has been paying a lot of attention to that. What we’re seeing now is how misled we have been by politicians and the insurance industry about the stability of employer-based systems.”

The loss of coverage won’t be felt equally across the country, either. Thirty-six states and Washington D.C. have expanded Medicaid coverage under the Affordable Care Act. In those states, the program now covers people with incomes up to 138% of the federal poverty line, which is currently $12,760 for individuals and $17,240 for a family of two. Because of the expansion, many people who lost their jobs will qualify for Medicaid in those states. But the 14 states that have not expanded Medicaid, which include Texas and Florida, are home to one-third of all jobs, and the newly unemployed in those states are more likely to suffer, the report found.

“Given the inability of some newly unemployed individuals in non-expansion states to qualify for Medicaid, we estimate the uninsured rate could increase more acutely in these areas compared to expansion states,” the report reads. In Texas alone, as many as 1.3 million residents could find themselves without coverage, according to the report’s worst-case scenario. 

Healthcare advocate Peter Morley said the report highlights the need to immediately expand Medicaid in the 14 non-expansion states.

“The Centers for Medicare and Medicaid Services must immediately expand Medicaid in each of these 14 states and override the state government’s refusal to expand Medicaid to ensure comprehensive coverage to those in the greatest need and in coverage gaps,” Morley said in an emailed statement. “The Department of Health and Human Services and each state needs to immediately prepare for the influx of new cases or there will be insurmountable tolls of uninsured.” 

Healthcare analyst Charles Gaba agreed. “The report provides a strong argument in favor of the remaining non-expansion states to quit screwing around and just expand Medicaid to the full 138% Federal Poverty Line cap without additional hoops for enrollees to jump through like work requirements,” he said in an emailed statement. 

Several states have implemented work requirements, which mandate that people who depend on Medicaid for health care work a certain number of hours each month—80 in most states—in order to receive coverage, but most of these work requirements have been rejected in court thus far. Utah, which had been the only state with active Medicaid work requirements during the pandemic, suspended its requirements on Friday. 

Morley and Gaba’s statements underscore a clear-cut truth: Medicaid will provide a huge lifeline for millions of Americans in the coming months. Even assuming only a 10% unemployment rate, the report estimates that 11 million Americans will join the Medicaid rolls.

Potter, meanwhile, believes the report and the crisis it examines makes the case for Medicare for All. “The employer-based system has been crumbling for a long time and no one has been paying a lot of attention to that. What we’re seeing now is how misled we have been by politicians and the insurance industry about the stability of employer-based systems. It is not only continuing to crumble, it is really collapsing,” he said. “This should put in sharp focus the urgency of planning to move to a healthcare system in which people are not dependent on their employers for health insurance.”

Vermont Sen. Bernie Sanders has also repeatedly spoken about how the pandemic shows the shortcomings of the current system and the need for Medicare for All.

“At a time when millions are losing their jobs AND their health care, the American people are now seeing the gross deficiencies in our employer-based private health care system. Health care is a human right, not an employee benefit,” he wrote on Twitter on Friday.  

According to a poll from Morning Consult, support for Medicare for All has increased dramatically during the crisis, with 55% of voters supporting the idea in March, up from only 46% in February. 

Yet former Vice President Joe Biden, the frontrunner for the Democratic nomination for president, has not changed his tune on Medicare for All, and has instead joined many other Democrats in calling on the Trump administration to create a special enrollment period for the Affordable Care Act.

The Trump administration announced last week it would not do so, and is in fact, still trying to repeal the ACA altogether. Despite the administration’s refusal to implement a special enrollment period, people who experience “qualifying life events,” such as losing their jobs, can still enroll in a health insurance plan on the individual markets.

RELATED: Here’s How to Apply for Health Insurance If You Lost Your Job Because of Coronavirus

But according to the HMA report, the individual markets will only play a minimal role in blunting the widespread loss of coverage. Even if unemployment affects 25% of the American population, the number of people who obtain insurance through the individual marketplaces would only increase by 2.1 million.

Ultimately, Potter said the report is proof that the insurance system in the U.S. needs to be seriously reformed. “There should be congressional hearings, there should be some conversation by Biden and Sanders and others on how we can move forward. If we can’t right now achieve Medicare for All, what are the next steps?”