The COVID-19 pandemic has exposed weaknesses around the US healthcare system and resulted in a large amount of uncertainty around the healthcare and health insurance costs for the pandemic, says GlobalData, a leading data and analytics company.
As the US does not provide universal healthcare to its citizens, and with more than 30,000,000 citizens who have recently become unemployed, many have lost their employer-provided healthcare and are facing tough economic decisions about covering their healthcare costs out-of-pocket. Additionally, health insurers are facing uncertainty about the costs of the pandemic and the rates they will need to charge.
Johanna Swanson, Product Manager at GlobalData, comments: “In the US, most citizens receive health insurance through their employer, but the high levels of unemployment have resulted in significant numbers of people losing their coverage. Those unemployed can continue to receive health insurance by using coverage from the Consolidated Omnibus Budget Reconciliation Act (COBRA) or applying for Medicaid, but COBRA coverage can be costly as employers are often paying an average of nearly 82% of the cost of their employees’ health insurance.”
The US Government is considering helping employers cover the cost of COBRA, so future rounds of financial support measures could include this assistance. Also, states that did not expand Medicaid under the Affordable Care Act may reconsider due to COVID-19 in order to receive more funding for their unemployed population.
Swanson adds: “Healthcare providers and insurers face uncertainty around the costs and rates that will be caused by the pandemic. It remains unclear what the true cost of the pandemic will be for the health insurance industry. It is expected to reach billions of dollars, but estimates vary widely.
“Health insurers need to submit 2021 rates for approval in June 2020. These rates must be based on expected future costs, which has proven challenging due to the current level of uncertainty. Many insurers have indicated that they will not increase rates for 2021, but it remains to be seen how they will mitigate the high costs of COVID-19. Additionally, healthcare companies may be facing uncertainty about the rules and regulations on obtaining federal pandemic relief funds. This leaves a large amount of uncertainty around the costs for the COVID-19 pandemic.”