A new report prepared by America’s Health Insurance Plans (AHIP) has found that the ongoing COVID-19 pandemic may cost US health insurers anywhere from $56 billion to $556 billion in 2020 and 2021, which depends on how many more people are infected.
The authors of the report calculated healthcare utilization and costs based on a few studies that showed the infection rates ranging between 20 and 60 percent of the population. They also calculated the cost of only 10 percent of the population was infected with COVID-19.
The report, by the Wakely Consulting Group, analyzed and evaluated these scenarios for more than 250 million insured people, including commercial members, Medicare and Medicaid managed health care plans.
Insurance-allowed costs may range between $56 billion and $92 billion if only 10 percent of the population were infected by the new coronavirus.
The costs would increase anywhere from $112 billion to $185 billion if 20 percent of the population were infected. And if 60 percent of people are infected, it would cost health insurers between $337 billion and $556 billion.
According to AHIP, the average cost could exceed $30,000 for each infected person receiving intensive care.
The authors calculated the costs and utilization of coronavirus patients on data for patients treated for seasonal flu and pneumonia.
They assume that 75 percent of total costs would be incurred in 2020, while 25 percent of costs would occur in 2021 when the pandemic is expected to wane. However, it is noted that such a high cost was projected for the second year of the disease.
Experts do not know how long the coronavirus pandemic would last. However, they believe that a vaccine is probably the only way to end this crisis. And a vaccine may be available in a year to two, or may even take longer, according to a CNN report.
The report said, “In the baseline scenario of a 20% infection rate, 51 million Americans would be infected, and the number of confirmed cases would be 35.6 million. These estimates indicate that 43% more people would be infected than would have positive test results.”
“About 5.5 million people, or 11% of the 51 million infected, would be hospitalized with COVID-19,” the report added. “Of these individuals, 1.3 million would be transferred to the ICU.”
It is estimated that nearly 16 million patients would require drugs, while more than 380,000 would require other medical services such as home health care and skilled nursing.
Older individuals are more vulnerable to COVID-19 than younger people but the Wakely report has shown that “Medicare patients would generate much lower spending in every scenario than commercial patients did, simply because the latter were more numerous.”
The report has also shown that “Medicaid managed-care organizations patients accounted for slightly lower costs than the Medicare patients did.”
However, there are a few limitations to the report. The researchers did not make risk-adjustment for people with high-risk conditions but they did it for age and gender. They also did not account for those who delayed care due to social distancing guidelines and other factors.
