Health insurance

Can health insurance companies charge higher premiums for the unvaccinated? What about life insurers? 5 questions answered


FILE – A pharmacy technician loads a syringe with Pfizer’s COVID-19 vaccine on Tuesday, March 2, 2021, at a mass vaccination site at the Portland Expo in Portland, Maine. U.S. experts should recommend COVID-19 vaccine boosters for all Americans, regardless of age, eight months after receiving their second dose of the vaccine, to ensure long-lasting protection against the coronavirus as the delta variant wears off. spread across the country. An announcement was expected as early as this week, with doses starting to be widely administered once the Food and Drug Administration officially approves the vaccines. (AP Photo / Robert F. Bukaty)

(THE CONVERSATION) The current wave of COVID-19 in the United States primarily affects unvaccinated Americans, who account for more than 95% of current cases of hospitalization and death. Given that the average cost of a COVID-19 hospitalization in 2020 was around US $ 42,200 per patient, will the unvaccinated also be asked to bear a greater portion of the cost of treatment, in terms of assurance ?

We asked economists Kosali Simon and Sharon Tennyson to explain the rules governing how health and life insurers can discriminate against clients based on vaccine status and other health-related reasons.

1. Can insurers charge more for unvaccinated people?

This is a really interesting question and depends on the type of insurance.

Life insurance companies have the freedom to charge different premiums based on risk factors that predict mortality. Buying a life insurance policy often involves a health check or medical examination, and seeking immunization status is not prohibited.

Health insurers are another story. A multitude of state and federal regulations over the past three decades have severely restricted their ability to use health factors in issuance or pricing policies. In 1996, the Health Insurance Portability and Accountability Act began to prohibit the use of health status in any group health insurance policy. And the Affordable Care Act, passed in 2014, prevents insurers from pricing plans based on health – with one exception: smoking status.

2. Are premiums or coverage still affected?

Fortune recently reported that although many of America’s largest life insurance companies do not yet ask clients for their vaccination status, a few insurers told the magazine that they do so for those at high risk. It was not clear in the article if this affects premiums.

A recent study comparing life insurance policies from 2014 to February 2021 found that premiums and coverage had not changed much during the pandemic. The study found evidence that the terms of the policy for older people and those with high-risk health conditions worsened.

The study’s authors suggested that the rapid development of vaccines may be the reason life insurance markets have yet to show a dramatic response to COVID-19, but their work does not distinguish vaccine recipients. unvaccinated.

It’s important to note that either way, the premiums and coverage of existing life insurance plans won’t change, so a death from COVID-19 will definitely be covered. In general, denial of life insurance claims is rare and only occurs for specific documented reasons.

3. So smokers can pay higher premiums?

In life insurance, smokers certainly pay higher premiums, as do obese people.

ValuePenguin, a unit of LendingTree that provides research and analysis, found that smokers typically pay more than three times as much for life insurance as non-smokers.

The site also found that obesity increases premiums by around 150% – or more if the person also suffers from health problems associated with being overweight.

As for the pricing of health insurance, the Affordable Care Act allows insurers to increase premiums by up to 50% for smokers. The difference between what smokers and non-smokers pay may actually be greater because the former cannot use a key government grant to pay for the smoking supplement.

The ACA makes no similar exception for obesity.

4. What about reductions for the vaccinated?

There is one tool available to health insurers – including self-insured employers – to reduce premiums for vaccinated people: welfare incentives.

Just as insurers and companies offer discounts for things like trying to lose weight or quitting smoking, they are also allowed to reduce the health insurance premiums paid by vaccinated employees.

In 2019, the average maximum incentive offered by employers to workers to participate in wellness activities was $ 783 per year.

Some employers are already promoting COVID-19 vaccinations this way. For example, Missouri State University is offering a $ 20 per month discount on health insurance premiums for employees who have received a COVID-19 vaccine. Others are considering similar discounts.

And so, even though insurers may not charge the higher premiums for unvaccinated people, people who refuse to be vaccinated may end up paying more than their vaccinated colleagues.

5. Do insurers take into account other vaccines or flu shots in the rates?

To our knowledge, insurers have not specifically used vaccination status or the flu shot to set premiums.

As part of accessing your medical records, life insurers can find out if you have been vaccinated, but there is no system in place to check annually if you have been vaccinated against the flu. Health insurers cannot apply for immunization status for the reasons listed above.

Employers may offer incentives to get the flu shot as part of their wellness programs.