What Would You Do?

Like most conscientious Americans, during the past year I’ve gotten flustered when I see people not wearing a mask in businesses with signs that clearly state that mask wearing is required to enter the establishment.  However, since I got my vaccinations I’m not as bothered.  My thinking is that if they want to risk getting COVID19 and possibly dying from it, that’s their decision.  As long as my risk is mitigated, they can do whatever they want.  And because the virus will spread among the unvaccinated, that risk is very real.  Okay, perhaps I should be more compassionate, but my research into why so many Americans reject universal health care indicates that it can be difficult to persuade people to do things they don’t want to do even when it is beneficial to them. 

And that got me thinking.  Suppose someone who refuses to take the vaccine gets an acute case of COVID19 and needs to be hospitalized.  While in the hospital this individual is placed on a ventilator and spends six weeks in the ICU and another ten weeks in a rehab unit.  The total bill comes to $785,000.[1]  Should the person’s health insurance company pay for the hospitalization given that it was totally preventable?

You may be thinking, “Well, that’s not my problem, it’s an issue between the hospital and insurance company.”  But keep in mind, that as a member of an insurance plan, you are contributing to the cost of that person’s hospitalization.  Ultimately, the more the insurance company has to pay out for treatment, the more likely it will raise the cost of your insurance premium as well as possibly raising the cost of deductibles and copays.  So, someone’s decision not to get vaccinated could ultimately impact you financially.  That is why it is referred to as  selfish individualism.   

Health insurance is based on having a large membership (called a risk pool) where the majority of members are healthy most of the time and a few are sick some of the time.  This ensures that the insurer takes in more revenue in the form of monthly insurance premiums and payouts less in claims.  Private health insurance companies would go bankrupt if this were not the case. 

Health insurance companies also engage in a number of activities to reduce risk and to ensure they make a profit including funding wellness programs, charging high deductibles, and rejecting claims they do not believe should be reimbursed. 

Most would agree that people are responsible for their own behavior and with decisions come consequences.  From this perspective, by not getting vaccinated against COVID19, the individual has made a choice and is now accountable for the results (and of course they are jeopardizing the health of others).  Given these circumstances should the insurance company pay, or should it refuse and hold the consumer responsible for all costs?

Some might argue that the person paid his/her health insurance premiums and therefore should expect the insurer will cover the bill, regardless of the insured person’s behavior.  After all, insurers pay when a motorcyclist doesn’t wear a helmet, which is typically required by law, and then gets into an accident and suffers a head injury.  However, motorcycle accidents are infrequent, whereas COVID19 and its variants are highly contagious.  Tens of millions of Americans have indicated that they don’t plan to get vaccinated and if millions of them get the virus, then hundreds of thousands might need to be hospitalized, putting pressure on the insurance company’s bottom line.

So far, the health insurance industry has not suffered.  In fact, because most Americans and their health providers have put off doing elective procedures, health insurance revenues have actually increased during the pandemic.  (Although outpatient elective procedures are less costly than hospitalization for COVID19, they are performed much more frequently.)  However, insurers are wary of the future.  Costs could rise again next winter when the unvaccinated catch and spread the virus in a population that has not yet achieved herd immunity AND those who are vaccinated opt for those elective procedures they put off.[2] 

For now, health insurance will cover the cost of hospitalization for treatment of COVID19, even if the patient refused to get vaccinated.  But you have wonder if that is a good idea.  Personal freedom should come with responsibility.

[1] Average cost of hospital care for COVID-19 ranges from $51,000 to $78,000, based on age | Healthcare Finance News

[2] Unexpected Health Insurance Profits and the COVID-19 Crisis | Health Care Economics, Insurance, Payment | JAMA Health Forum | JAMA Network

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