Coronavirus May Add Billions to the Nation's Health Care Bill - The New York Times - 0 views
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Insurance premiums could spike as much as 40 percent next year, a new analysis warns, as employers and insurers confront the projected tens of billions of dollars in additional costs of treating coronavirus patients.
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Mr. Lee’s organization estimated the total cost to the commercial insurance market, which represents the coverage currently offered to 170 million workers and individuals through private health plans.
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Depending on how many people need care, insurers, employers and individuals could face anywhere from $34 billion to $251 billion in additional expenses from the testing and treatment of Covid-1
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At the high end, the virus would add 20 percent or more to current costs of roughly $1.2 trillion a year.
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Insurers and employers are already prodding Congress to consider helping them pay for the crisis by setting up a special reinsurance program that would cover the most expensive medical claims
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While insurers have enjoyed strong profits in recent years, they say the cost of the pandemic could be overwhelming, especially to employers and workers already struggling to pay for coverage.
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Employers and others have launched a new group, the Alliance to Fight for Health Care, that includes many of the same parties that worked together to defeat the enactment of the so-called Cadillac tax on high-cost employer plans
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Mr. Lee warned that insurers are likely to seek rates that are double their additional costs from the virus. If their costs go up 20 percent, Mr. Lee says rates could jump as much as 40 percent in 2021.
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He thinks his clients in New York, which is being particularly hard hit by the virus, could see additional costs of 4 to 5 percent. In other areas, if there are many fewer cases, costs could be less.
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Rate increase requests still might be difficult for some states and consumers to swallow. The nation’s largest insurers, which include giant for-profit companies like Anthem, CVS Health and UnitedHealth, reported billions of dollars in profits last year, and analysts say these companies have abundant capital to absorb any losses because of the pandemic
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“These increased costs could mean that many of the 170 million Americans in the commercial market may lose their coverage and go without needed care as we battle a global health crisis,”
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Increases in medical costs of 3 to 4 percent “would be manageable by most insurers,” concluded a recent analysts at S&P Global Ratings
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If costs were to go up by 10 to 12 percent, the analysts say the stress on the companies would be greater, with insurers reporting losses and forced to use their capital reserves to pay claims.
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But some actuaries are predicting costs are likely to be much lower. One actuary said insurers have told him that they have no plans to raise rates sharply because the do not think the pandemic will change their predictions about ongoing medical expenses once it has run its course.
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other actuaries are coming up with estimates that are lower because they have different assumptions about how many people might be hospitalized and whether that would be offset by the declines in medical care for other illnesses or surgeries as people stay home and elective procedures are postponed indefinitely
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Since the enactment of the Affordable Care Act, health care inflation has remained in the single digits.
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Another big unknown is whether people will be able to get treatment for Covid-19 or other illnesses, in spite of needing care.
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Even then, how much the private sector will pay is unclear, especially if the government starts setting up hospital beds and temporary hospitals in various regions, and supplying staff to treat patients.
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Another unknown factor is how much it will cost to treat those coronavirus patients who are hospitalized. “Everybody is still guessing what a coronavirus hospitalization stay looks like,”
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While there are some estimates hovering around $20,000 for a hospital stay based on a typical pneumonia case, his group is estimating that the average could be closer to $72,000 for severe cases