How Will the Pandemic Affect My Health Insurance Costs?

Uncertainty and fear have been the backdrop of daily life for most of 2020 — and with an unprecedented health care crisis comes unprecedented upheaval in the health insurance industry. The full cost of the coronavirus is not yet quantifiable, nor is an exact calculation of how regular people will be affected by changes to their health care policies. One thing is certain, however: Millions of Americans have already experienced changes in their coverage and millions more will likely soon follow suit.

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Health plans started fresh in 2020 with no indication of the carnage that was on the horizon — and those rates are largely locked in for the year. That, however, all changes on Jan. 1, 2021. According to a New York Times report in April, insurers were projecting tens of billions of dollars in new costs and losses thanks to the expensive testing and treatment of millions of cases. They, of course, will pass much of that onto customers, and the Times cites a report predicting that premiums could rise by as much as 40% next year.

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As early as mid-July, employers were reporting increases of 3% to 4.5% in their 2021 premiums from major insurers, according to a report from CNBC. Those increases, of course, will likely be passed onto participating employees. The report also cites concerns that widespread delayed care from 2020 will lead to more acute claims — and therefore even higher costs — next year.

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According to a recent report from the Robert Wood Johnson Foundation, 160 million people under the age of 65 received health insurance through their employers before the COVID-19 crisis. With tens of millions now out of work, the report estimates that 25 million to 43 million Americans could lose their health insurance along with their jobs.

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More than 50% of the newly unemployed who live in states that expanded Medicaid through the Affordable Care Act (ACA) could receive coverage through that program. Fewer than one in four of them will remain uninsured thanks to the Medicaid expansion. About two-thirds of those who live in non-expansion states, however, will not be covered by Medicaid.

Some of those who lose employer-based coverage due to job loss might be eligible for Medicaid. Those who aren’t might be eligible for a Special Enrollment Period through Healthcare.gov if they lost their coverage or expect to lose their coverage within 60 days. In most cases, that would mean a change in health insurance costs, although whether those costs increase or decrease depends on the person, the policy, and many other variables.

A joint initiative between the Kaiser Family Foundation and the Peterson Center on Healthcare created a model of likely coronavirus costs based on what they know about the costs of treating pneumonia. The model predicts that many cases will cost around $20,000 to treat. The most serious cases that require long hospitalizations and ventilator support, however, are likely to cost more like $88,000. How much of that is passed onto the patient, of course, depends on the person, the insurance policy, and the deductible, but one thing is certain — recovery will come with scary envelopes arriving in the mail.

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Because older Americans are the most vulnerable, Medicare beneficiaries are among the highest-risk groups for the coronavirus. The good news is, the government-run plan has them in fairly good hands. Medicare covers all COVID-19 lab tests with no out-of-pocket costs, as well as all antibody tests and all medically necessary hospitalizations. Medicare has extended its telehealth coverage, and although there is currently no vaccine, Medicare will cover the cost of vaccination if one becomes available.

A new law passed by Congress requires most individual health insurance coverage and group plans to pay for all expenses related to coronavirus testing and diagnosis during the emergency period. But there are exceptions. “For example, regulations issued by the Trump Administration in 2018 promote the sale of short-term policies that are not required to cover emergency health benefits (EHB),” according to the Kaiser Family Foundation. About 1.3 million Americans are enrolled in these short-term plans.

Another 1 million Americans are enrolled in private health coverage arrangements called sharing ministries. Like short-term policies, they’re not subject to federal regulation and therefore aren’t required to cover testing and diagnosis costs. Two states — Iowa and Tennessee — allow their farm bureaus to sell private health care plans. These plans are also not bound by federal regulations — tens of thousands of Americans are enrolled in farm bureau plans.

As previously stated, federal law mandates certain coverage and exemptions across the vast majority of health insurance plans in the United States. Those regulations, however, are fairly narrow. What services and products each individual can expect to pay for or not depends largely on their health insurance policy and their individual plans — and there are hundreds in total. The trade association America’s Health Insurance Plans maintains a comprehensive and up-to-date list of virtually every provider and policy in the country, what they’re doing during the COVID-19 crisis, what’s changing, what’s staying the same, and what their policyholders can expect. Visit the site to see how your provider is responding.

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