In-Depth: The cost of COVID-19, health insurance, and hospitalization

COVID-19 coronavirus hospital nurse
Posted at 2:44 PM, Aug 26, 2021
and last updated 2021-08-26 14:44:57-04

TAMPA, Fla. — As the human cost of COVID-19 continues to grow each day, the looming financial costs of COVID-19 could prompt economic hardship for millions of Americans, both insured and uninsured.

The costs of COVID-19 hospitalizations and treatment are hard to lock down. Costs vary by severity of the condition and what type of hospitalization would be needed, such as an ICU stay versus a standard hospital admission. Below, you’ll find some facts about COVID-19 costs and insurance.

How much does the average hospital stay for COVID-19 cost?
No set amount has been found to be a solid average cost. But, the numbers hover between $15-25,000 or more.

FAIR Health analyzed data from over 30 billion healthcare claim records and found the average charge per COVID-19 patient requiring hospitalization averaged out to between $17,064 for a patient over 70 to $24,012 for people in their 50’s.

Prior to the emergence of the delta variant, The Centers for Medicare and Medicaid Services found the Medicare fee-for-service for COVID-19 hospitalizations averaged approximately $24,033. A separate analysis of Medicare costs found the average cost to be $21,752. An August Kaiser Family Foundation analysis estimated the cost of COVID-19 hospitalizations at approximately $20,922.

Finally, Delta Airlines CEO Ed Bastian said Wednesday the average cost for an employee being hospitalized with COVID-19 was costing around $40,000.

How does the cost differ between in and out-of-network costs?
The numbers vary according to severity of illness. According to FAIR Health’s analysis, a hospitalization for someone who was uninsured, or out-of-network with no benefit, was approximately $73,300. FAIR Health estimated the in-network cost per privately insured patient was lower, approximately $38,221.

How much do unvaccinated COVID-19 hospitalizations cost?
The Kaiser Family Foundation conducted an analysis of this question and came up with a cost of more than $2 billion for the months of June and July 2021. The analysis used an average cost for a hospital visit of $20,000 and estimated the number of unvaccinated COVID-19 related hospitalizations in the United States at approximately 113,000 for June and July. Multiplying the costs and patients, the KFF found the costs in June were more than $700 million and the costs in July topped $1.5 billion.

If the costs doubled again in August as they did from June to July as the delta variant ravages the country, the total costs for unvaccinated COVID-19 hospitalizations in three months would top $5 billion.

Can insurance companies raise premiums based on COVID-19 costs?
The courts haven’t weighed in on the matter yet, but private companies and their insurance providers have in the past shifted costs based on some health conditions that yield higher costs. For example, many companies and insurance providers charge employees who smoke a higher premium than those who don’t because of likely higher health care costs. Some also offer discounts by completing certain programs throughout the year.

“Private businesses certainly have a compelling financial interest in doing something to protect both the health and welfare of the employees and the costs that they’re incurring,” said University of South Florida Public Health Professor Jay Wolfson.

Still, it appears the potential of paying extra costs for not being vaccinated is motivating many who have not gotten a shot yet. Delta announced a plan Wednesday to charge the unvaccinated an extra $200 a month in their insurance premiums. ABC News reported the number of Delta employees going to the airline's on-site clinic for first vaccine doses increased more than fivefold, just 24 hours after the company’s announcement.

What else could drive health insurance costs higher with COVID-19?
There are many unknowns as COVID-19 continues to impact Americans both on a long and short-term basis. But one factor that could start to drive up costs in the short term is cost-sharing.

During the first year of the pandemic, many insurance companies (88 percent) waived the out-of-pocket costs if someone was hospitalized, according to the KFF. However, in 2021 with vaccines fully approved and widely available, some insurance companies have stopped the practice. According to the KFF, 72 percent of the two largest insurers in each state and DC no longer waive the costs and another 10 percent will end their waivers by the end of October. This means many patients who are hospitalized, the vast majority unvaccinated, will be hit with hospital bills for their treatment.

The KFF said a typical deductible in an employer health plan is $1,644 and the estimated average out-of-pocket for someone hospitalized with pneumonia (which the KFF said was similar to those hospitalized for COVID-19) was more than $1,300.