Insurance rates will spike without US action on coronavirus costs, Covered California says
Without federal action, insurance premiums are likely to skyrocket by as much as 40 percent or more in 2021 because of the costs of testing and caring for patients with COVID-19, Covered California reported Monday.
“Consumers, employers and our entire health care system may be facing unforeseen costs that could exceed $251 billion, said Covered California Executive Director Peter V. Lee. “Consumers will feel these costs through higher out-of-pocket expenses and premiums, as well as the potential of employers dropping coverage or shifting more costs to employees.”
The agency’s chief actuary, John Bertko, prepared the report after conferring with actuarial experts in the commercial insurance markets and analyzing interviews with health insurances plan leaders.
In a report to congressional representatives, Covered California leaders noted that insurers are in the process of setting premiums right now. The report made several recommendations that Lee said could mitigate the potential impact of cost increases for consumers and businesses:
Expand subsidies for people earning 400 percent above the federal poverty level, and increase tax credits for those earning under 400 percent of that level.
Temporarily set limits on costs for COVID-19 testing and treatment to provide more certainty on pricing for health insurers and self-insured employers and those they cover.
Set up a national special-enrollment period this year for the individual market, just as 12 state-based marketplaces have already done.
“There is no time to waste,” Lee said. “We must take action now to prevent the pain of this epidemic from becoming worse for hundreds of millions of Americans next year.”
Lee advocated for policies under consideration in Washington that would provide federal funding for portions of unforeseen COVID-19 costs for the individual and employer markets, along with Medicare managed care programs, saying the measures could provide needed funds and certainty for consumers, small and large employers, and states across the nation.
COVID-19, a respiratory illness caused by the new coronavirus SARS-CoV2, has posed a great challenge to health care systems worldwide because so many people require intensive or critical care to support their breathing. To reduce the strain on hospitals, public health officials have ordered people around the world to shelter in place to reduce these numbers, and those orders have led to economic .turmoil as companies shut down operations, sometimes laying off employees or providing no pay.
Last week, Covered California joined other state-based health insurance marketplaces in opening a special enrollment period to allow all consumers to sign up for coverage. Typically, coverage is only open to everyone during open enrollment from November to January.
In addition to federal subsidies, the state of California is also offering a range of financial help to make coverage more affordable. Consumers can find out more at www.CoveredCA.com.
