According to a new analysis, insurance premiums across the board could see a rise of more than 40% in the coming year. The spike would be in part due to insurers and employers projecting they will spend billions of dollars in additional fees to treat coronavirus patients. There is still much uncertainty about how many patients will need to be hospitalized around the country due to the coronavirus.
At the beginning of this year, health plans went to effect with no idea about the way coronavirus was going to affect it. To protect individuals and businesses from higher rates, Peter V. Lee of Covered California is suggesting a temporary federal program that will help cover some of the extra costs.
No state, insurer or business planned to put money aside for something this big happening. To this day, there have been over 94,000 cases of infected patients in the country. Officially, there have been at least 1,400 deaths so far. In New York, 1,600 patients have been sent to intensive care units as of this morning. The numbers are expected to continue rising throughout the week.
The organization Mr. Lee runs has estimated the total cost commercially in the insurance market as it represents the coverage of more than 170 million workers and people using health plans through private insurance companies. His analysis did not include the costs for individual people who are enrolled in government-funded programs like Medicaid and Medicare.
Once the total number of people needing care from insurers, employers and individuals is added up, it’s going to cost between 30 million in extra expenses for the testing and treatment of the Covid-19 virus. Around 1.2 trillion dollars each year could be added to the costs if the estimates end up at the high end of the spectrum.
According to Mr. Lee, it is difficult to come up with accurate estimates because there are too many unknown factors. The Congressional bill currently in talks could provide hospitals with much-needed financial relief. However, it may not change how much hospitals will have to charge to employers and private insurers for care.
Employers and insurance companies are already trying to convince Congress to consider offering help to pay for the crisis utilizing a special reinsurance program that could help cover many of the expensive claims people are making. The program would be funded by the federal government and would help lower the amount the insurer would have to pay.