Estimated payer spending for COVID-19 may be lower than initially projected, according to a new report released by America’s Health Insurance Plans.
The first estimate released on March 30 showed COVID-19 treatment costs at between $ 56 and $ 556 billion. The new cost estimate is between $ 30 to $ 546.6 billion, according to the study done by Wakely.
For enrollees and beneficiaries, the out-of-pocket expenses could range from $ 2.8 billion to $ 48.6 billion of the total cost.
The new report came out on June 3, a week before a rise in the number of COVID-19 cases. On June 11, the Associated Press said numbers are rising in nearly half of the states.
Wakely looked into the potential costs of COVID-19 treatments for U.S. private insurance providers for 2020 and 2021. It is based on data on both COVID-19 costs, utilization and deferred care. Wakely included commercial health insurers, Medicaid managed care organizations and Medicare Advantage organizations in its research.
The updated report includes a lower rate of hospitalizations, higher costs for hospital visits and costs for deferred care.
Analysts developed these numbers based on modeled infection rates. They created a 10% infection rate representing no significant spikes in the next year-and-a-half. A 20% infection rate that indicates a scenario with ongoing infections and a small spike at the end of the year. And a 60% infection rate where there are ongoing infections and a large spike at the end of the year. They did not include a scenario in which a vaccine decreases infections in the next year.
WHY IT MATTERS
Despite these updates, experts still say that there is uncertainty on the ultimate impact COVID-19, especially for the healthcare industry.
There is even more ambiguity surrounding delayed elective and non-emergency procedures that will have to be scheduled and paid for at a later date.
As many insurers start determining their premiums for 2021, these figures may provide needed context.
THE LARGER TREND
Under federal law, insurers must spend at least 80% of their revenue on medical care. The extra money must go back to the purchasers.
With so many procedures being postponed due to COVID-19, many insurers are giving out refunds. Using preliminary data reported by insurers to state regulators and compiled by Market Farrah Associates, Kaiser suggested that insurers will be issuing a total of about $ 2.7 billion across all markets – nearly doubling the previous record high of $ 1.4 billion last year.
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