35 million Americans could be left without health insurance as former Fed chair warns 'depression levels' of unemployment

Layoffs and mass unemployment following coronavirus pandemic could spike uninsured rate not seen in decade

As many as 35 million Americans could lose their health insurance following unprecedented unemployment claims and business closures in the wake of the coronavirus pandemic, which already has cut thousands of workers from their health plans tied to their employers.

The latest projection from Health Management Associates shows the number of uninsured people in the US, including workers and their families who rely on employer-backed plans, could skyrocket.

Millions of people would still be eligible to enrol in Medicaid, though it's unclear whether states are prepared for a surge in new claims for the federal health plan that serves poor Americans without significant funding from Washington D.C.

The report says the government plan could increase from 71 million people to as much as 94 million within the next several months.

Roughly 10 million people filed for unemployment within the past two weeks, including a record 6.6 million people who filed within the last week of March.

Analysts predict the numbers will continue to spike to as many as 20 million claims by the end of April, though the unemployment insurance claims capture only a fragment of the overall jobs and income pictures in the economic fallout from the outbreak.

On Monday, former Federal Reserve Chair Janet Yellen called the economic toll a "huge, unprecedented, devastating hit" as the nation's unemployment rate reaches "depression levels".

She told CNBC that unemployment may be as high as 21 per cent as the nation's Covid-19 death toll surpassed 10,000.

"High frequency indicators, particularly ones that bear on the performance of the labour market, particularly initial claims" are "absolutely shocking", she said.

Based on unemployment claims in March, analysts estimate roughly 3.5 million people lost their employer-based health insurance in the middle of the national health emergency, according to the Economic Policy Institute.

With most health plans administered on a monthly basis, thousands of Americans and their families were likely cut off from their health insurance on 1 April.

Donald Trump will not reopen the federal health insurance marketplace through the Affordable Care Act for a special enrolment period, leaving many Americans without any coverage as they potentially face thousands of dollars in out-of-pocket expenses if they fall sick.

Democrats have urged the president to re-open the marketplace, while progressive lawmakers and advocates for Medicare for All — which would replace the private insurance market with a nationalised plan serving all Americans regardless if they're employed — have pushed the White House to open up Medicare to cover all coronavirus-related testing and treatment.

The Department of Health and Human Services has indicated that hospitals and providers will be able to bill the federal government for care to uninsured people, and they'll be reimbursed at Medicare rates, according to Secretary Alex Azar.

The costs for coronavirus care can be devastating, according to analysts reviewing both in-network and out-of-network costs for hospitalisation.

Uninsured patients have paid as much as $74,310 for treatment, or if their provider has determined the care they receive is out-of-network, according to FAIR Health. But insured patients using in-network providers could spend as much as $38,755, the group found.

The surge in hospitalised patient care could dramatically raise health insurance premiums in 2021 by more than 40 per cent, with 170 million Americans on private insurance spending as much as $251 billion on healthcare costs within the pandemic's first year, according to Covered California, the state's health insurance marketplace through the ACA.