The Potential National Health Cost Impacts to Consumers, Employers and Insurers Due to the Coronavirus (COVID-19)

This policy/actuarial brief provides projections and models the potential costs associated with coronavirus (COVID-19) testing and treatment on the national commercial health insurance markets (individual, small and large group employers — including both those employers that are insured and self-funded). There are additional cost and access implications for Medicare, Medicaid, other public programs, and the uninsured, but this brief focuses only on the impacts on Americans with commercial insurance coverage. Major findings include:

The one-year projected costs in the national commercial market range from $34 billion to $251 billion for testing, treatment and care specifically related to COVID-19 — with the potential that costs could be higher than the high end of the range.

Potential COVID-19 costs for 2020 could range from about 2 percent of premium to over 21 percent of premium if the full first-year costs of the epidemic had been priced into the premium.

Health carriers are in the process of setting rates for 2021. If carriers must recoup 2020 costs, price for the same level of costs next year, and protect their solvency, 2021 premium increases to individuals and employers from COVID-19 alone could range from 4 percent to more than 40 percent.

Covered California