On March 23, 2020, Covered California, the state-based marketplace that connects California residents with health coverage options, released a policy brief in response to the growing spread of Coronavirus Disease 2019 (COVID-19). This report is titled “The Potential National Health Cost Impacts to Consumers, Employers and Insurers in the Commercial Market Due to COVID-19.” The brief provides estimates of the financial impact that the coronavirus outbreak will have on Americans with both employer-sponsored coverage and individual health insurance policies. Notably, Covered California estimates that the cost to the commercial coverage market for one year of COVID-19 testing ranges from $34 billion to $251 billion and that the cost to the commercial coverage market for one year of COVID-19 treatment ranges from $31 billion to $237.6 billion. To recoup these costs in 2021, commercial health insurers will need to recoup their costs to stay solvent. Covered California projects that health insurance premiums for commercial coverage could increase by 4 to 40 percent to account for this, depending on the severity of the outbreak and the number of people who become infected with the virus. These costs could be reduced with the infusion of federal funding into the state health insurance marketplaces. Otherwise, health insurance coverage could be out of reach for many Americans.
In addition to the cost projections, Covered California recommends that states create a special enrollment period (SEP) for people affected by COVID-19. The publication of this report comes shortly after California extended the special enrollment period that was created earlier in the year for consumers who were unaware of the state’s new penalty for failing to maintain health coverage. The extended special enrollment period will allow consumers to select and enroll in a health plan through June 30, 2020.
Read Covered California’s press release about the report.