Will the pandemic mean higher health care costs in the future?
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The COVID-19 pandemic is producing a deeply uncertain period for the economy, and one of the places that’s playing out in a big way is in health care — specifically, what consumers will end up paying for their care and health insurance down the road.
Covered California, the state health insurance marketplace, has a report out estimating COVID-19 testing and treatment will cost the commercial market between $34 billion and $251 billion. The report finds that insurance premiums in private plans could jump from 4% to 40%. That’s a pretty big range, and it has a lot to do with no one knowing how costs will be distributed across the health care landscape.
“Some of the costs of treating patients with coronavirus are just not being paid for at all,” said Ateev Mehrotra, who teaches health care policy at Harvard University.
But this much is certain: the bills will come. Some will get picked up by Medicare and Medicaid, and others by private insurers and individuals. And some costs will be eaten by clinics and hospitals, Mehrotra said.
But there may be mitigating factors that limit the financial impact of the pandemic, he added.
“Patients are understandably scared to go get health care, so a lot of other forms of healthcare have been reduced,” he said.
Discussions about coronavirus costs, and who pays them, are happening now, said Benjamin Isgur, who leads the Health Research Institute at PWC.
“If we’re thinking about the employer insurance market, this is the time period when health plan actuaries are starting to think about what next year’s costs will be,” he said.
The problem is, those actuaries, when trying to figure out what employers and individuals will have to pay, have little data to work with.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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