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COVID and 20% Premium Increases

COVID-19 will likely result in 20% or higher health insurance premiums in 2021.

COVID related claim costs are averaging $12,000 per person, We are adding 30,000 - 35,000 new people a day to the count of infected, total today of 1.1M, and about half way to the 2.25M my model estimates. The impact of these months of COVID means raising the annual average healthcare cost in 2020 to about $9,000 per person, versus a assumption of about $7,000 per person a year in a typical year.

Catastrophic cases and high need patients, think stage 4 cancer or hemophilia, continue to require treatment regimens, and continue to be counted among those 5% of people that drive 35% of overall healthcare spend. To this group we can now add the patients with pulmonary stress needing ventilators as part of virus related treatment protocols.

Chronic care patients, such as people with diabetes and hypertension, make up about 30% of the people but consume about 60% of the care dollar spent. The average age of this group is in the low 60's. They are already heavy users of the health care system, and as we know from other analysis of COVID, also the prime target for significant virus-related infections and long recoveries.

This is scratching the surface; how many additional telehealth calls and mental health related services have been incurred among the 65% of people that normally do not see a doctor at all.

The next few months will be difficult, as we as a nation look to open up again and resume life, while at the same time grapple with new "hot spots" of viral outbreaks.

As an insurer or health system, are you prepared for the shift in case load as virus cases ebb and spike, while other chronic care and maintenance care also needs to be delivered?

Are you preparing your staff for the slow and long grind this will be?

Honesty, insight, transparency, and collaborative planning are going to be the hallmarks of success.

I would like to hear your thoughts and reactions. Contact me at, or on Twitter @shifthealthcare

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