- The number of coronavirus cases in the US continues to spike, with more than 143,000 people having been infected as of Monday morning, according to the latest numbers from Johns Hopkins University.
- A new analysis projects that health insurance premiums are going to skyrocket next year as a result of the unexpected costs of the coronavirus this year.
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News coverage hasn’t focused as intently on the dollars and cents of the coronavirus pandemic as much as it, rightfully, has zeroed in on the human cost of the virus — in terms of lives lost, hospitalizations, and the race to find a cure as well as a treatment to help people get over the virus in the meantime.
The longer this stays with us, though, the more the economic toll of the COVID-19 coronavirus is going to come into stark relief. Setting aside the impact of the virus on the economy (which has been so catastrophic that a $2 trillion economic stimulus bill from Congress was needed), a new analysis from an entity called Covered California finds that health insurance premiums may see a big spike next year because of all the medical bills incurred this year as a result of the virus.
Health carriers are in the process of setting rates for 2021, the analysis notes. And if those carriers want to recoup their costs from this year, in addition to pricing for the same level of costs next year while making sure to, obviously, maintain their solvency, the analysis finds that next year’s premiums could rise as much as 40%.
“Health plans went into 2020 with no hint of coronavirus on the horizon,” Covered California executive director Peter V. Lee told The New York Times. “No insurer, no state, planned and put money away for something of this significance.”
Adding a bit of additional context, the analysis from Covered California — which is the Golden State’s insurance marketplace that was created by the Affordable Care Act — notes that commercial health insurance rates for this year were set around the middle of 2019, long before the virus was first discovered.
Unfortunately, as of Monday morning the virus had already infected more than 143,000 people in the US and resulted in more than 2,500 deaths. That’s according to the latest numbers from Johns Hopkins University. The Covered California analysis predicts that health insurers, as well as employers and individuals, could be hit with anywhere from $34 billion to $251 billion in new expenses stemming from coronavirus treatment and tests. “Assuming that there is a large outbreak of the disease — which may result in half of the population getting infected, with from 4 to 15 million individuals in the national commercial market having confirmed cases after testing — the main cost drivers will be how many of those require hospitalization versus outpatient care and the costs of those services,” the analysis notes.
“Modeling from 10% to 20% of those getting infected needing hospitalization, and commercial rates, the costs could range from $31 billion to $238 billion for the first year.”