The true cost of the Covid-19 pandemic is nearly impossible to quantify. The human toll, surpassing the Vietnam War last week at 60,000 deaths, is difficult to comprehend. The number of people who have lost their livelihoods, at 30 million, is as yet incomplete, as many face long waits to file for unemployment. And we still don’t know the long-term effects on the economy or how the crisis will end, as experts warn that the novel coronavirus may well return in the fall.
But health insurance companies are less worried about the cost of the pandemic. As they prepare premium rates for 2021, a bigger problem than the cost of care will be the uptick in uninsured.
“The reality is that once we get the pandemic better under control, there’s a very real concern that there is going to be a longer-term economic downturn,” said Jocelyn Guyer, a managing director with Manatt Health. “The question of where people are getting coverage is going to be with us for a long time.”
How much does covering Covid-19 cost?
Calculations on the cost of care for the average Covid-19 case vary by a wide margin. One estimate by Covered California pegged the average cost per admission at $72,000, with patients admitted to the hospital staying for an average of 12 days. Less sick patients can rack up $600 in the average cost for an outpatient visit.
Centene CEO Michael Neidorff said the company had not yet seen enough claims data to estimate the average cost of Covid-19 treatment for Medicaid patients.
“It’s not been significant. It’s been more the testing — and we haven’t seen a lot,” he said during a Tuesday earnings call.
Even with most insurers covering out-of-pocket costs for Covid-19 testing and treatment, they may see savings in the end as patients suspend other care during the pandemic. Healthcare providers from orthopedic surgeons to dentists were forced to cancel all non-emergency procedures for the last month. Analysts with Moody’s Investors Service estimated insurers will see a decrease in utilization between 20% and 40% per month from non-essential procedures.
The postponed hip replacements and stent procedures are expected to come back, but when that will happen is anyone’s guess. Some states have already begun to lift restrictions on healthcare services, but patients, worried about getting sick, may still be hesitant to seek care.
“If you think about yourself personally, you wouldn’t feel comfortable walking into a hospital, a dentist’s office or an outpatient facility. When you think about the higher risk folks that need cardiac [surgeries] done, they’ll come in first,” Moody’s Assistant Vice President Stefan Kahandaliyanage said in a phone interview. “You’ll have this gradual pacing. We don’t expect a huge comeback of patients.”
Whether or not the cost of Covid-19 treatment will inflate premiums next year is still up in the air. Covered California estimated that premium increases could range from 4% to 40% next year, though the latter would be a high estimate.
Rita Numerof, co-founder of healthcare consulting firm Numerof & Associates, said she expected to see rate hikes next year, as insurers anticipate cancelled procedures will be rescheduled. But if premiums are too high, “I think there will be enormous pushback from businesses,” she said.
Dean Ungar, a vice president and senior credit officer with Moody’s, said it depends on how the rest of the pandemic plays out.
“It seems like we’re more on the mild side of things, but we don’t really know yet,” he said. “We don’t know what happens when we start to relax social distancing and lockdowns. It’s a little bit early to say.”
Where will people go for insurance?
The bigger question, for the moment, is where people who have lost their coverage will go for insurance. As many as 35 million people — including workers and their families — could lose employer-based health insurance during the pandemic, according to a report by Health Management Associates. As a result, Medicaid enrollment would increase by 11 million to 23 million, and another 1 million to 2 million people would get individual insurance, largely through the ACA marketplaces.
Source: MedCity News