Insurers’ health tab for virus in billions
Health insurers in California have paid an estimated $2.4 billion for coronavirus testing and COVID19 treatment, and Bay Area counties have seen some of the highest costs in the state, according to a study published Thursday by researchers at UC Berkeley’s School of Public Health.
The researchers estimate that corona virusrelated care could cost private and public insurers at least $25.1 billion — about 6% of annual health care spending in the state — before the California population reaches herd immunity, barring development of a successful vaccine. (Herd immunity is the point at which enough of the population is immune that contagious spread to the uninfected becomes uncommon.)
The $2.4 billion estimate is about six times the
state’s annual cost to treat seasonal flu, according to the news release.
Some of the highest outlays by insurers in the state came in San Mateo and Marin counties, with most Bay Area counties close behind and all above the statewide median. On a per capita basis, the spending in Marin County, at $77,584 per 1,000 people, was about 25% higher than the statewide median, and in San Mateo it was about 17% higher at $72,535 per 1,000, according to data estimates provided by the researchers. Northern California commercial health care prices tend to be much higher in general, Daniel Arnold, research director of the school’s Nicholas C. Petris Center, said in a statement.
While commercial insurers have borne about 60% of the costs and can raise premiums in response, uninsured people, Medicare and staterun MediCal have split the remainder. About 59% of costs were related to hospitalization, with the remainder split between testing and office visits, according to the study.
California in early March ordered all commercial and MediCal plans to waive outofpocket costs for coronavirus tests.
The researchers’ calculations assumed that 60% or more of the population must become infected with the coronavirus to establish herd immunity. To date, researchers estimate that about 5% of
Californians have contracted the virus.
Depending on the insurer, the price of COVID19 hospitalizations ranged from $53,004 for MediCal/Children’s Health Insurance Program to $108,898 for commercial insurers. Though older adults are more likely to be hospitalized, a younger person’s hospitalization would cost a commercial insurer far more than what MediCal and Medicare would pay for the same hospitalization, according to Brent Fulton, associate director of UC’s Petris Center.
The study’s estimates do not account for any longterm health effects of the virus or the cost of other delayed medical care, meaning that the numbers probably underestimate the future costs of the virus, the authors said in a statement.
“It’s not all about dollars. This is about the treatment of people and their lives and deaths,” Richard Scheffler, research team leader and professor at the graduate School of Public Health at UC Berkeley, said in a statement. “But if you don’t have the money to pay for it, it basically makes things worse.”