COVID-19 Could Reduce Employer Healthcare Costs by 4%

A Willis Towers Watson analysis released in late March estimated that employers could see healthcare benefit costs rise by 7% due to the pandemic.

The coronavirus disease 2019 (COVID-19) outbreak might reduce healthcare costs for employers by as much as 4%, according to a Willis Towers Watson (WTW) analysis released Friday morning.

The study is an update to a WTW analysis released in late March that estimated employers could see healthcare benefit costs rise by 7% due to the pandemic.

At the time, WTW estimated that at a 10% infection level, benefit costs could rise by 1% to 3%, while a 30% infection level could see costs rise by 4% to 7%. At the highest rate included in the analysis, a 50% infection level, costs could rise between 5% to 7%.

Related: Healthcare Benefit Costs Could Rise by 7% Because of COVID-19

The new analysis projects that an infection level of 1% could lead to employer healthcare costs declining between 1% to 4%.

A 15% infection level would see employer costs rise by 1% depending on care deferral, while a 20% infection level could see costs rise by 1% to 3%, according to the study.

Related: COVID-19 Outbreak Threatens Health Systems With New Financial Challenges

"With treatment for COVID-19 top of mind, people have been putting off nonemergency medical care, including routine office visits and elective procedures at hospitals," Trevis Parson, chief actuary at WTW, said in a statement. "Given this reduction in use of medical services, we expect cost reductions due to care deferral to more than offset projected cost increases associated with COVID-19 infections."

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The study was released days after the American Hospital Association, America's Health Insurance Plans, and the U.S. Chamber of Commerce sent a letter to congressional leaders that called on them to protect and expand health coverage for employers and workers.

"Employers need more support – and workers need to be able to continue their stable, secure coverage," the letter read. "As you consider the next round of legislation to overcome COVID-19, we urge you to prioritize maintaining private health benefits for individuals and families and to increase coverage options for those who are already uninsured."