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Coronavirus May Add Billions to U.S. Health Care Bill Coronavirus May Add Billions to U.S. Health Care Bill
(3 days later)
With so much still uncertain about how widespread hospitalizations for coronavirus patients will be around the United States, a new analysis says premiums could increase as much as 40 percent next year if the pandemic results in millions of Americans needing hospital stays.With so much still uncertain about how widespread hospitalizations for coronavirus patients will be around the United States, a new analysis says premiums could increase as much as 40 percent next year if the pandemic results in millions of Americans needing hospital stays.
“Health plans went into 2020 with no hint of coronavirus on the horizon,” said Peter V. Lee, the executive director of Covered California, the state insurance marketplace created under the Affordable Care Act, which conducted the analysis. To protect businesses and individuals from sharply higher rates, he supports a temporary federal program that would cover some of these costs.“Health plans went into 2020 with no hint of coronavirus on the horizon,” said Peter V. Lee, the executive director of Covered California, the state insurance marketplace created under the Affordable Care Act, which conducted the analysis. To protect businesses and individuals from sharply higher rates, he supports a temporary federal program that would cover some of these costs.
“No insurer, no state, planned and put money away for something of this significance,” Mr. Lee said.“No insurer, no state, planned and put money away for something of this significance,” Mr. Lee said.
So far, some 94,000 people have become infected in the United States, according to official counts, and at least 1,400 have died. In New York state alone, nearly 1,600 patients were in intensive-care units as of Friday morning and the numbers have been rising all week.So far, some 94,000 people have become infected in the United States, according to official counts, and at least 1,400 have died. In New York state alone, nearly 1,600 patients were in intensive-care units as of Friday morning and the numbers have been rising all week.
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. The analysis does not include costs for people enrolled in government programs like Medicare and Medicaid.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. The analysis does not include costs for people enrolled in government programs like Medicare and Medicaid.
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-19. according to the analysis. At the high end, the virus would add 20 percent or more to current costs of roughly $1.2 trillion a year.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-19. according to the analysis. At the high end, the virus would add 20 percent or more to current costs of roughly $1.2 trillion a year.
“There’s a lot we don’t know,” Mr. Lee said. “These are ranges.”“There’s a lot we don’t know,” Mr. Lee said. “These are ranges.”
While the bill before Congress would provide hospitals some financial relief, it may not result in any change to how much hospitals charge private insurers and employers for care, he said.While the bill before Congress would provide hospitals some financial relief, it may not result in any change to how much hospitals charge private insurers and employers for care, he said.
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. The federal government would fund the program to lower the amount being paid by employers and insurers.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. The federal government would fund the program to lower the amount being paid by employers and insurers.
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.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.
“As more people seek coverage and care due to this pandemic, this temporary, emergency program would protect Americans from the consequences of potential catastrophic costs,” the executives of the two major health insurance trade groups wrote Congress earlier this month.“As more people seek coverage and care due to this pandemic, this temporary, emergency program would protect Americans from the consequences of potential catastrophic costs,” the executives of the two major health insurance trade groups wrote Congress earlier this month.
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. They, too, recently told lawmakers they think a federal reinsurance program might make sense.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. They, too, recently told lawmakers they think a federal reinsurance program might make sense.
Without help lowering their costs by having the government pay for the most expensive hospital stays, 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.Without help lowering their costs by having the government pay for the most expensive hospital stays, 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.
“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,” Lee said in a statement, outlining his group’s proposals.“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,” Lee said in a statement, outlining his group’s proposals.
While state government insurance officials may push back, they may be inclined to allow the increases if they believe companies would need the additional revenue to pay medical claims. “Regulators would take a sharp eye to big premium increases,” said John Bertko, Covered California’s chief actuary, but if insurers “chew up half or more of their solvency reserves, regulators will say they need to build them up.” The group warned that smaller insurers could be especially at risk.While state government insurance officials may push back, they may be inclined to allow the increases if they believe companies would need the additional revenue to pay medical claims. “Regulators would take a sharp eye to big premium increases,” said John Bertko, Covered California’s chief actuary, but if insurers “chew up half or more of their solvency reserves, regulators will say they need to build them up.” The group warned that smaller insurers could be especially at risk.
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. Since the enactment of the Affordable Care Act, health care inflation has remained in the single digits.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. Since the enactment of the Affordable Care Act, health care inflation has remained in the single digits.
Increases in medical costs of 3 to 4 percent “would be manageable by most insurers,” concluded a recent analysts at S&P Global Ratings. 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.Increases in medical costs of 3 to 4 percent “would be manageable by most insurers,” concluded a recent analysts at S&P Global Ratings. 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.
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.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.
Updated June 5, 2020 Updated June 12, 2020
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
And 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. The cost of the epidemic could be tempered if people don’t seek other kinds of care, like a routine check up or hip replacement. That also happened during the 2008 recession, when people postponed any type of care and procedures.And 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. The cost of the epidemic could be tempered if people don’t seek other kinds of care, like a routine check up or hip replacement. That also happened during the 2008 recession, when people postponed any type of care and procedures.
“We think claims are really going to drop off over the next month or two,” said Edward Kaplan, a senior vice president at Segal, which advises clients on their health benefits. 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.“We think claims are really going to drop off over the next month or two,” said Edward Kaplan, a senior vice president at Segal, which advises clients on their health benefits. 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.
Another big unknown is whether people will be able to get treatment for Covid-19 or other illnesses, in spite of needing care. Depending on the course of the pandemic, health systems could become so overwhelmed that they have no available hospital beds or staff to treat patients who would otherwise receive care.Another big unknown is whether people will be able to get treatment for Covid-19 or other illnesses, in spite of needing care. Depending on the course of the pandemic, health systems could become so overwhelmed that they have no available hospital beds or staff to treat patients who would otherwise receive care.
If patients can’t get care, overall costs could be much lower than they would otherwise be, said Trevis Parson, chief actuary for Willis Towers Watson, which advises companies on benefits. His group is estimating costs could increase by as much as 7 percent because of the pandemic.If patients can’t get care, overall costs could be much lower than they would otherwise be, said Trevis Parson, chief actuary for Willis Towers Watson, which advises companies on benefits. His group is estimating costs could increase by as much as 7 percent because of the pandemic.
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.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.
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,” said Mr. Lee of Covered California.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,” said Mr. Lee of Covered California.
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. New York State is already reporting that patients with severe cases are staying on ventilators much longer than those with pneumonia might.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. New York State is already reporting that patients with severe cases are staying on ventilators much longer than those with pneumonia might.
How employers and insurers will ultimately react to any spike in costs is also unclear. While health care costs have historically risen by double digits in any given year, companies have been caught off guard by the dramatic change in circumstances. “It’s hard to think of anything that rivals this,” Mr. Parson said.How employers and insurers will ultimately react to any spike in costs is also unclear. While health care costs have historically risen by double digits in any given year, companies have been caught off guard by the dramatic change in circumstances. “It’s hard to think of anything that rivals this,” Mr. Parson said.