COVID hospitalization averages $20K—and insurers want unvaccinated to pay up

Delta surcharge is "necessary to address the financial risk" of not getting vaccinated.

Delta Air Lines plane taxis toward a gate between other Delta planes at John F. Kennedy International Airport in New York on Monday, July 20, 2009

Hospital care for seriously ill COVID-19 patients is costing the US health care system billions of dollars. And with vaccines highly effective at preventing hospitalization now widely and freely available to everyone over the age of 12, insurers and some businesses want the unvaccinated—who make up the vast majority of COVID-19 hospitalizations—to cover more of those costs.

This past June and July alone, the estimated cost of caring for unvaccinated people who were hospitalized for preventable cases of COVID-19 reached about $2.3 billion, according to a recent analysis by the Peterson Center on Healthcare and Kaiser Family Foundation. The analysis estimated that in those two months there were 113,000 unvaccinated people who were hospitalized primarily for COVID-19 and that their infection would have been prevented with vaccination. They then multiplied that number by $20,000, a rough estimate of the average cost of hospital care for COVID-19 patients, bringing the total to $2.3 billion.

Waived waivers

Hospitalizations have only skyrocketed since then. On the last day of July, the country's seven-day rolling average of hospitalizations was around 40,000. Now, that average is nearly 86,000, according to the Centers for Disease Control and Prevention.

Of course, the overall costs of health care are never primarily shouldered by sick individuals. They're mainly covered by taxpayer-funded public programs and private insurance. From the roughly $20,000 hospital bills, a patient may only pay around $1,300 in out-of-pocket expenses, based on data on the cost of similar care for pneumonia cases.

But the unvaccinated hospitalized with COVID-19 may not have even needed to pay that—at least not until recently. About 88 percent of people enrolled in an individual or fully insured health plans had out-of-pocket costs for COVID-19 treatment waived by their insurance providers at some point during the pandemic. Health insurers skipped the cost sharing for a number of reasons, including seeing soaring profits amid the pandemic as people put off normal health care spending, like non-urgent doctor visits, screenings, and elective procedures. Insurers also offered waivers out of concern over possible federal mandates for cost-sharing waivers and public relations considerations.

Financial risk

But with highly effective vaccines now offered widely at no out-of-pocket costs, insurance companies are no longer feeling so generous. In a separate analysis, Peterson-KFF looked at the two largest insurers in all 50 states, plus the District of Columbia—102 health plans in all that cover about 62 percent of people fully enrolled in health plans. Though all of the plans had waived cost-sharing at some point during the pandemic, 72 percent of them (73 plans) have now nixed those waivers. Of the 29 plans still offering waivers, 10 are set to end waivers by the end of October, and 12 more are set to end them by the end of the year.

And health insurers aren't the only ones tired of bearing the brunt of COVID care costs. In a memo to employees Wednesday, Delta Air Lines CEO Ed Bastian announced that, in addition to mandatory indoor masking and weekly COVID testing, unvaccinated workers will have to pay a $200 surcharge every month, starting November 1, in order to stay in the company's health care plan.

"The average hospital stay for COVID-19 has cost Delta $50,000 per person," Bastian wrote in the memo. "This surcharge will be necessary to address the financial risk the decision to not vaccinate is creating for our company. In recent weeks since the rise of the B.1.617.2 [delta] variant, all Delta [Air Lines] employees who have been hospitalized with COVID were not fully vaccinated." Additionally, starting September 30, unvaccinated employees will lose pay protection if they have to miss work due to a COVID-19 infection.

Bastion noted that, as of Wednesday, 75 percent of Delta's employees are vaccinated.

From: https://arstechnica.com/science/2021/08/covid-costs-billions-so-delta-to-charge-unvaxxed-airline-workers-200-month/