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The health of private insurance in the US during covid-19

In an insurance-based health system, it is the insurance companies that pay the bill for epidemic care.

At the beginning of the pandemic, health insurance companies in the United States planned to treat Covid-19 like any other medical condition: Generally, people pay a percentage of costs that their plan considers legitimate.

That changed on March 10, with good news for patients. US Vice President Mike Pence told reporters that the country's government and private insurance programs will change the way they do business. "All of our major health insurance companies have joined Medicare and Medicaid and agreed to waive all copayments [and] cover all treatments for those who contract the coronavirus," he said. "They failed to meet the surprise bills and pledged to promote telemedicine."

But whatever relief people with health insurance coverage feel will ease the unemployment caused by the new coronavirus. A Commonwealth Fund survey conducted in May and released on June 23 showed that 41% of respondents in the United States who said they or one of their partners had lost their job since February relied on that job for health insurance. Now they have to find a way to pay for insurance or health care on their own.

"This survey shows how our biased approach to health insurance coverage in the United States leaves many people without coverage, or simply laid off far from losing it," says Sarah Collins, vice president of the Commonwealth Fund. About two-thirds of Americans are covered by private health insurance, and the rest are covered by various government programs.

Dependence on employment for health insurance premiums is just one of many factors that could threaten the health insurance industry in the United States as the COVID-19 pandemic continues. But while some of your customers may struggle, the industry is doing well.

While there have been occasional stories of exceptions to the VP's promise of full coverage by insurers, the errors were most often due to a flawed billing system or a self-insured company trying to evade its obligations. So far, public disclosure of illegal invoices has proven effective enough to remedy the error without interference from regulatory authorities.

In 2018, private health insurance paid $ 1.243 billion (£ 1 trillion; € 1.1 trillion) for health care costs, which is a third of total health spending in the United States. This year it could go down as Americans avoid seeking medical attention for fear of infections and physical confinement. Visits to hospitals in the United States fell nearly 55% in March and April, according to a Strata analysis of the decision. 1 In May, this trend may appear to be picking up and even reversing a bit, as patients are starting to flock again for delayed procedures.

Medicare, the federal senior health insurance program and the largest payer in the United States, has been a source of stability, making payments to various parts of the health care system to help fill the income gap. Some private insurance companies have done the same in a more limited way.

Benefit of insurance companies

When insurers agreed in March to cover all costs associated with coverage and waive out-of-pocket copayments, most considered the deal temporary and the expiration dates attached. Some companies have extended their initial dates, and liberal advocacy group Public Citizen has lobbied several others to extend waivers that are about to expire. The large insurer Kaiser Permanente, with its 12.2 million members, extended its resignation until the end of the year.

It's unclear how many delayed or canceled procedures will be performed at a later date, but some certainly won't, either because the patient has passed away or because staff and physical space have limited capacity to meet pent-up demand.

But despite the lower payments, the insurance industry doesn't expect to see big windfalls - it's heavily regulated at the national and state levels. One of the provisions of Obamacare (the Affordable Care Act) requires insurers to pay fixed minimum percentages of the premiums they charge for medical services (at least 80% for individual and small group policies; 85% for large groups). If your profit margin increases due to postponed measures in the epidemic, it will be only within a narrow margin, and "surplus" income must be returned to policyholders. Some insurance companies have already started sending discounts to their clients.

Meanwhile, some insurance policies are likely to cost buyers more in the future. The worst-hit firms in New York City are looking for a double-digit increase in insurance premiums next year, while some companies in upstate New York, which has been less affected by the epidemic, are calling for modest rate cuts.

Unemployed workers are flocking

Most health insurance in the United States is obtained through the workplace, and people who have lost their jobs lose their health insurance on the last day of their last month at work.

Laid off workers can, by law, choose to pay the full cost of staying under company health insurance plus a 2% administration fee for up to 18 months, through a program with an impractical but known name. its acronym, Cobra. Unless a person qualifies for state benefits, choosing a Cobra can be expensive - up to $ 600 per month for individual coverage, and family coverage can cost three times that amount. The original workplace policy may require additional copayments for visits and medications.

But workers must exercise this option within 60 days of firing or loss. That window is now closing for the first wave of jobless during the pandemic. Many newly unemployed will be eligible for benefits to help them purchase health insurance under Obamacare provisions. But many who think they will soon return to work simply don't bother, and not all will be looking for new jobs: the pandemic has disrupted public transportation and made mobility difficult.

Additionally, the bureaucracy is becoming more difficult than usual because many government agencies charged with administering reemployment and welfare programs now operate remotely.

Medicaid crisis looms

"You really can't talk about health equality without talking about Medicaid in the midst of a pandemic - this is the largest public health first responder that we have," Sarah Rosenbaum, professor of health policy, said in an organized briefing. by Alliance for Health Policy.

Medicaid, a program that provides health insurance to the poorest people in the United States, is paid jointly by the federal government and the states. Rosenbaum warned of the nationwide Medicaid threat.

Major cuts in Medicaid funding are likely in the Democratic and Republican states, where social isolation has significantly reduced the revenue that states typically collect from sales, restaurant and income taxes. States cannot, by law, run deficits: if revenues fall, spending must be cut.

California faces a revenue shortfall of $ 54 billion, roughly 37% of its current public budget. Despite the large federal role, Medicaid is in many cases "the largest item in the state budget" and therefore an attractive target for cuts, says Tom Betlach, partner at Speire Healthcare Strategies.

As an example, he uses Arizona, where he ran Medicaid. Under the pre-pandemic formula, with a federal contribution, Betlach says, "to get $ 33 million in state savings, we had to cut $ 100 million from the delivery system." But, with the feds collecting a larger share of spending, cutting $ 33 million, the state's contribution would also reduce the federal share and lead to a decrease in Arizona Medicaid spending by approximately $ 135 million in total funding.

House Democrats seek to increase the federal contribution to Medicaid, but the Republican-controlled Senate is taking a wait-and-see stance. The impasse is unlikely to be resolved until September at the earliest, when Congress returns from its summer recess.