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CLEVELAND, Ohio – Unvaccinated people could become the new smokers in health insurance.
Just as smokers sometimes pay higher health care premiums, employers are considering requiring people who do not get the COVID-19 vaccine to pay higher insurance premiums.
The reason is clear: the unvaccinated fill hospitals and cost medicare billions. These costs are passed on to other consumers in the form of increased premiums.
Avoidable hospitalizations for COVID-19 among unvaccinated adults cost more than $ 5 billion from June to August 2021 alone, according to a joint analysis by the Peterson Center on Healthcare and the Kaiser Family Foundation.
The costs of COVID-19 treatment for private insurers are estimated at $ 546.6 billion over 2020 and 2021, according to advocacy and education group America’s Health Insurance Plans.
“This has an impact on the overall affordability of health care and health insurance for all of us, when we can least afford it,” said Kelly O’Reilly, President and CEO of the Ohio Association of Health Plans.
Delta Airlines has already taken action. Delta’s unvaccinated employees face monthly increases of $ 200 on their health insurance premiums starting November 1. The airline cited the high costs to cover employees hospitalized with the virus as the reason for its move.
JPMorgan announced Monday that unvaccinated employees will pay higher employee contributions in 2022, to offset costs associated with the increased risk of contracting coronavirus and additional testing.
Mercer, a large consulting firm that works with employers around the world, is hearing from clients who want to know how to charge unvaccinated workers more for health insurance, according to news reports.
This could be an extra $ 20 to $ 50 per paycheck, a Mercer spokesperson told USA Today: “Unvaccinated people have the potential to cost employers more in terms of care costs. health, they therefore consider that they are justified by this additional supplement.
Charging unvaccinated employees more for health insurance was seen as a way to encourage workplace vaccination, until the Biden administration announced a mandate for vaccination in September. Biden’s policy requires companies with more than 100 employees to mandate vaccines or regular testing for unvaccinated workers.
Employees of health care and education organizations that receive federal funds should be immunized, as well as all federal employees and contractors. The plan affects approximately 80 million Americans.
Placing a premium on unvaccinated workers has more to do with the fact that unvaccinated workers could increase health care costs for everyone.
The idea is popular with people who have been vaccinated. A recent survey of 600 U.S. adults found that 38% of those vaccinated, and only 7% of those unvaccinated, believed health insurance companies should charge unvaccinated people more for coverage. The survey was commissioned by Expertise.com, a service provider research company.
O’Reilly said she hadn’t heard of any insurance company in Ohio considering raising premiums for unvaccinated people.
“I think we’ll see more of this potentially over time as a way for employers to incentivize their employees to get vaccinated,” O’Reilly said.
Some insurers serving northeast Ohio are still deciding what to do. It’s too early in the process to comment on the relationship between premiums and immunization at this time, said Mike Gallina, vice president, organizational development and community engagement for AultCare Health Plans.
Other insurers, including Anthem Blue Cross and Blue Shield in Ohio, Humana, Cigna Health and Life Insurance, SummaCare and Medical Mutual of Ohio, did not respond to maintenance requests or declined to comment.
Self-insured businesses have flexibility
Companies offer health insurance to their employees in two ways – and one makes it easier to penalize workers who are not vaccinated against COVID-19.
Some buy insurance for their employees, with medical costs then covered by the insurer. This is called a fully insured plan.
O’Reilly said there are more regulations regarding companies with fully insured plans, so it will be more difficult for those companies to charge unvaccinated workers more for insurance coverage.
Some companies are self-insured. That means the company itself is taking the financial risk of covering the costs of employee health care, said Tom Campanella, a resident healthcare executive at Baldwin Wallace University. These companies hire insurers only to administer and process claims. The company pays workers’ claims itself.
Self-insured businesses can legally charge additional premiums to unvaccinated people who work for them, Campanella said.
“They take the financial risk, so they really make the rules,” he said. “They are in a position where they have a lot of flexibility in how they approach issues like COVID-19. “
A self-insured company could also reduce premiums for all employees, as the Biden administration’s vaccination mandate means the company is not forecasting high insurance costs.
A company that anticipated an 8% increase in premiums could reduce it to 5% because worker vaccination rates are high, Campanella said.
“It could be some kind of carrot there,” he said.
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