Roughly 2,000 furloughed workers of MotorCity Casino Hotel are poised to lose their employer-sponsored health insurance on Aug. 1 as all three Detroit casinos remain closed under Gov. Gretchen Whitmer's executive orders.
The Detroit casinos shut down March 16 as the coronavirus pandemic hit.
Although some of the 24 tribal casinos within Michigan have since reopened, the governor hasn't given the green light for the Detroit casinos, which altogether employ about 6,000 people, many of them union members.
Like all unemployed workers, the casino employees also will soon stop receiving an extra $600 per week in unemployment benefits. That income top-up, authorized by the federal CARES Act pandemic relief package, expires at the end of July for everyone.
"Our casino continues to be closed, due to government orders, without a firm reopening date," MotorCity President Bruce Dall said in a statement Thursday. "Given this uncertainty, to protect the long-term viability of the casino, we have made the difficult decision to lay off the majority of our staff and end benefits, effective at the end of the day on July 31."
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MotorCity did not disclose the total number of laid-off employees. However, information on a Facebook page for casino workers said between 1,300 and 2,500 are expected to be let go.
A Whitmer spokesperson did not respond to a message seeking comment for this story.
The laid-off MotorCity workers will have four options if they wish to continue some form of health insurance:
COBRA A healthcare.gov plan (Obamacare) A spouse's health insurance plan Medicaid
They also could choose to go without any health insurance. The Affordable Care Act's financial penalty for skipping insurance, once $695 per adult or 2.5% of household income, ended in 2019.
COBRA insurance is a continuation of employer-sponsored health insurance plan in which a laid-off worker starts paying the full cost of their coverage. Eligibility typically runs for between 18 and 36 months after a layoff.
But it comes at a steep price. According to information provided to furloughed MotorCity workers, COBRA coverage would range from $538 per month for a single person to as much as $1,883 per month for a family.
"COBRA is an option, but most of the time it’s not affordable to people because the cost of paying the employer's share is so high," said Samantha Iovan, a senior analyst at the Center for Health & Research Transformation in Ann Arbor.
Obamacare plans sold on Healthcare.gov are usually much cheaper than COBRA plans if the individual and his or her family qualify for the plans' federal subsidies. However, laid-off workers have only 60 days to sign up for a Healthcare.gov plan outside the annual open enrollment period that runs Nov. 1 to Dec. 15.
Medicaid is the cheapest insurance option, but is generally only available to those laid-off workers who qualify as low income or are pregnant or are over 65. The maximum allowable income is 138% of the federal poverty level, which is about $16,000 for a single person or $33,000 for a family of four.
One problem with Medicaid is not every doctor and medical center accepts Medicaid patients.
"You might not have the doctor of choice that you are looking for, but you’ll be able to find somebody who takes Medicaid who can treat you," Iovan said.
Representatives for Michigan's Medicaid program were not immediately available to comment Thursday afternoon on whether newly laid-off individuals whose sole income is unemployment benefits can qualify for Medicaid.
Other Detroit casinos
Health insurance for furloughed MGM Grand Detroit workers is to continue through Aug. 31, a spokesperson said.
A representative for Greektown Casino-Hotel, operated by Penn National Gaming, declined to say when its employees' health insurance benefits expire, adding that the matter is under discussion.
The United Auto Workers union, which represents many Detroit casino workers, did not respond Thursday to Free Press inquiries.
In early June, the Michigan Gaming Control Board approved initial guidelines for the future reopening of the Detroit casinos that will limit the properties to 15% maximum occupancy capacity and prohibit smoking, playing poker or eating at the buffet, among other safety measures.
Dall, MotorCity's president, said they once anticipated the casino closure order lifting by July 4, but it remained in place amid a rise in Michigan coronavirus cases.
MotorCity has continued to keep its hotel closed during the casino shutdown.
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"We take great pride in all of our hard-working associates who have provided such tremendous service to our guests and we regret the terrible burden that this pandemic has brought to each of them," Dall said.
Casino wagering taxes are one of the city of Detroit's largest revenue sources and city officials say Detroit is losing about $600,000 a day in taxes from the shutdown.
Contact JC Reindl at 313-222-6631 or [email protected]. Follow him on Twitter @jcreindl. Read more on business and sign up for our business newsletter.
This article originally appeared on Detroit Free Press: Nearly 2,000 Detroit casino workers about to lose health insurance
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