Severely ill coronavirus patients will generate such costly hospital bills that it could drive up insurance premiums by double digits for tens of millions of Americans next year.
That’s according to Peter Lee, director of California’s individual insurance marketplace, whose actuaries have estimated that medical care stemming from the virus could generate between $29 billion and $216 billion in hospital costs nationally for patients on employer-sponsored or individual market coverage, depending on the number of people ultimately infected.
The report out of California – which, like a half-dozen other states,is allowing people special permission to sign up for Affordable Care Act plans during the pandemic – underscores yet another economic ripple effect of the virus: It will spur large new health-care costs that many Americans will eventually feel.
While the vast majority of coronavirus patients will experience only mild symptoms, a subset of the infected will develop pneumonia or other respiratory trouble, requiring a hospital stay where they can have access to oxygen or a ventilator.
Actuaries for Covered California, the state’s ACA marketplace, estimated that patients hospitalized because of coronavirus would stay an average of 12 days, generating an average bill of $72,000.
A majority of these patients will be over age 65, so the federal Medicare program will pay their bills, which are typically around half or two-thirds of what commercial insurers pay. Low-income people on Medicaid will have coverage, too.
But the outlook is troubling for other Americans. If they are insured, they’ll mostly be covered after meeting their annual deductible, but they’ll still cause a boost in health-care spending that will make future premiums more expensive for everyone else.
And uninsured patients who require hospitalization will incur tens of thousands of dollars in costs.
Covered California estimate calculated total costs to the system based on three scenarios. There’s the scenario in which coronavirus has “low” impact, in which 400,000 people are hospitalized in the U.S.; “medium” impact where 1.2 million are hospitalized; and “high” impact where 3 million people are hospitalized.
In any of these scenarios, insurers will face large, unexpected bills that could prompt widespread premium spikes next year.
“It’s a phenomenally large implication,” Lee told me.
California’s $72,000 estimate for a hospital stay for coronavirus is considerably larger than what other analysts have projected. Kaiser Family Foundation researchers found the average employer-sponsored plan pays an average of $20,292 for hospital admission of a patient with pneumonia and major complications. The average cost ranged from $11,533 to $24,178, depending on the area of the country.
But this much is clear: The coronavirus outbreak, which killed 100 people in the United Statein a single day Monday, will further strain a U.S. health-care system whose patients are already plagued by perpetually rising costs and inefficiencies all around.
Yet the pandemic has also offered Obamacare advocates a chance to tout the law’s successes on its 10th anniversary yesterday.
“We couldn’t need it more in terms of this pandemic,” House Speaker Nancy Pelosi, D-Calif., said on a call Monday hosted by the Democrat-connected group Protect Our Care. “As we prayerfully go into this further discussion on the coronavirus challenge, thank God for the Patient Protection and Affordable Care Act.”
Advocates were forced to dramatically scale back their plans to celebrate the ACA’s decade of existence on March 23. President Obama released a video message instead of delivering an address at American University, which was canceled.
Congressional Democrats still seized the opportunity to tout the law’s expansion of coverage to around 20 million Americans through the individual marketplaces and Medicaid expansion and its requirements for plans to cover essential services – including hospital visits and vaccinations, services that are particularly relevant during this pandemic.
They resurrected their frequent pre-coronavirus messaging about the Trump administration’s constant bombardment of the law, most specifically its position that the entire measure is unconstitutional and should be struck down by the courts. Pelosi asked the administration to reverse its position on the ACA and to instead encourage the states still resisting Medicaid expansion to accept it.
And they called on the administration to further promote the law during the pandemic, by opening up HealthCare.gov for a special enrollment period.
Sign-ups are typically allowed only in the final two months of the year, but Colorado, Connecticut, Maryland, Massachusetts, Nevada, New York, Rhode Island and Washington (which all run their own marketplaces) have all temporarily reopened sign-ups. Enrollment was already open in California and the District of Columbia for other reasons, but both jurisdictions have said they’ll keep it open longer.
Rep. Lauren Underwood, D-Ill., who worked at the Department of Health and Human Services as the ACA was being passed, said it’s “really important we leverage all existing authorities to ensure the American people have access to the care and coverage they need.”
“We just haven’t seen any move toward that end from the administration,” she said.