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Analysis

3 Ways COVID-19 Has Changed the Insurance Landscape

By Alexandra Wilson Pecci  
   April 30, 2020

Skyrocketing coverage losses, unemployment fears, and payers reimbursing a bigger chunk of COVID-19 claims are just three ways that the crisis is changing the health insurance landscape.

Several pieces of new data out this week point to drastic changes in the health insurance landscape since the start of the COVID-19 pandemic.

Skyrocketing coverage losses, unemployment fears, and payers reimbursing a bigger chunk of COVID-19 claims are just three ways that the crisis is changing the health insurance landscape.
 

1. Insurance coverage losses increase

A new Economic Policy Institute (EPI) analysis shows that many Americans are losing their employer-sponsored health insurance right when so many of them need it most.

It finds that as of April 30, a little less than 28 million workers had been laid off or furloughed since early March, which translates into likely employer-provided health insurance losses of 12.7 million.

That's up from an April 16 EPI estimate that 9.2 million may have lost employer-provided health insurance coverage.

The data also illustrates the risks of tying health insurance coverage to employment, since unemployment is skyrocketing, EPI say, which notes that because "the United States is unique among rich countries in tying health insurance benefits to employment, many of the newly unemployed will suddenly face prohibitively costly insurance options."

In addition, new research from the Urban Institute notes that "many newly unemployed people may be unaware that they may qualify for public insurance or subsidies for marketplace coverage."
 

2. Medical expense and unemployment fears plague consumers

Even consumers who haven't lost their jobs or their health insurance are worried about it happening and are cutting back on medical expenses before they even have any, new data shows.

A new AccessOne survey finds that:

  • Three-quarters of consumers are concerned that they will lose their jobs as a result of the coronavirus pandemic
     
  • More than half worry they'll lose their health insurance as a result of that job loss
     
  • 68% are concerned about their ability to pay for general medical expenses this year
     
  • 58% said they would consider delaying a non-emergency but medically necessary surgery this year due to cost and 56 percent said they would delay a diagnostic procedure due cost (high-income earners more likely to delay)
     
  • Nearly three-fifths of respondents said that out-of-pocket medical bills are not in their top five high-priority household expenses
     

3. Insurers paying bigger portion of COVID-19 claims

Even as people lose their employer-sponsored health coverage, data from Waystar found that insurers are paying a larger portion of the financial burden for COVID-19 patients.

It showed that while patient financial responsibility averaged at 10% across all COVID-19 claims, it dropped to 2% for the largest claims. 

In addition, institutional organizations (such as hospitals), are getting reimbursed an average of $12,000 per COVID-19 claim, while professional organizations (such as smaller medical practices) are getting reimbursed an average of $200 per claim.

The new data also shows that Waystar's telehealth volume grew 40 times larger in the past month.

That's in line with growth from Teladoc Health, which saw total visits skyrocket in Q1 2020 as the telemedicine company experienced a substantial demand increase as a result of the coronavirus disease 2019 (COVID-19) outbreak.

Alexandra Wilson Pecci is an editor for HealthLeaders.


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