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Jim de Bree | Unvaccinated and Insurance Costs

Many states are engaged in promotional activities to encourage people to be vaccinated. Obviously, we will not let go of COVID-19 until we achieve herd immunity, but a significant portion of the population’s anti-vaccine sentiment can prevent herd immunity from being achieved.

These promotional activities may seem trivial, but in addition to health concerns, there are financial reasons behind these efforts. As you will see when you renew your health insurance next fall, the pandemic has resulted in a significant increase in medical costs, which could lead to higher premiums. Treatment of COVID-19 is costly for those who need hospitalization and for long-distance carriers who experience long-term health problems after being infected with COVID-19.

These costs will definitely be included in the cost of getting health insurance in the coming years.

Vaccinated people are less likely to need hospitalization or other expensive treatment with COVID-19. Instead, when the next wave comes, unvaccinated people will bear the brunt of COVID-19 cases and bear most of the COVID-19-related treatment costs. Recent studies show that the incidence of new COVID-19 is currently predominantly among unvaccinated individuals. This can almost be prevented by just vaccination.

Therefore, those who are not vaccinated will increase the cost of medical care for everyone. Perhaps a better incentive for vaccination would be to put the unvaccinated person in a separate insurance risk pool or impose an additional charge on health insurance premiums.

I believe that the best way to reduce health care costs and benefit insurers is usually to have a large comprehensive insurance pool that distributes risk to the entire population and allows bulk purchase discounts. But if some of the population deliberately ignore social attempts to improve infectious diseases, why shouldn’t they endure the economic consequences of their actions?

Historically, some have argued that people with poor health, such as smoking and overeating, need to charge higher premiums or be placed in a separate insurance risk pool to prevent unhealthy behavior. I’ve always felt that this is a slippery slope that can be manipulated to maximize the profits of insurers at the expense of consumers. So I was hesitant to go that way.

However, COVID-19 is different. Unlike obesity, the disease can spread without vaccination. Obesity and smoking are not infectious diseases. In addition, if COVID-19 continues to appear in the majority of the unvaccinated population, it is more likely to mutate into vaccine-resistant mutants, which puts vaccinated people at risk. Will be done.

The segment of unvaccinated people who are uninsured or covered by Medicaid and do not pay their premiums will probably be offered some other financial incentive to get vaccinated. There is a possibility that

What I have written here contradicts my historical view of funding medical care, but the need to obtain herd immunity against COVID-19 is so great that so far existing medical funding You need to consider ideas that are incompatible with the delivery mechanism.

Jim de Bree is a semi-retired CPA living in Valencia.

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