Photo: National Institute of Health
… life insurers charge more for smokers and for the obese The Philadelphia Inquirer took the step of discussing whether insurance companies should charge more for the unvaccinated. It is an interesting piece, so I will quote a little bit of it. The interesting portion notes that a stay in the hospital for Covid-19 generally costs about $42,000 per patient. Some, however, can ranged in the millions. At the present time, almost 95 percent of those hospitalized are unvaccinated. That brought up how insurers can treat those who are high risk. Life insurance companies have been punishing people with risks for decades. Should health insurers do the same? If they are a business who is responsive to its investors, that answer is a no-brainer. And it brings us back to that somewhat existential question that some people debate today, Is health insurance a right or a privilege? Here are the summarized results of that study.
The unvaccinated The debate affects those who refuse to be vaccinated for Covid, The current COVID-19 wave in the U.S. is mostly affecting unvaccinated Americans, who represent more than 95% of current cases of hospitalization and death. Given that the average cost of a COVID-19 hospitalization in 2020 ran about $42,200 a patient, will the unvaccinated be asked to bear more of the cost of treatment, in terms of insurance, as well? We asked economists Kosali Simon and Sharon Tennyson to explain the rules governing how health and life insurers can discriminate among customers based on vaccination status and other health-related reasons. “Can health insurance companies charge the unvaccinated higher premiums?” Philadelphia Inquirer, September 5, 2021 Here is part of what they said. Can insurers charge the unvaccinated more? This is a really interesting question and depends on the type of insurance. Life insurance companies have the freedom to charge different premiums based on risk factors that predict mortality. Purchasing a life insurance policy often entails a health status check or medical exam, and asking for vaccination status is not banned. Health insurers are a different story. A slew of state and federal regulations in the last three decades have heavily restricted their ability to use health factors in issuing or pricing polices. In 1996, the Health Insurance Portability and Accountability Act began prohibiting the use of health status in any group health insurance policy. And the Affordable Care Act, passed in 2014, prevents insurers from pricing plans according to health — with one exception: smoking status. “Can health insurance companies charge the unvaccinated higher premiums?” Philadelphia Inquirer, September 5, 2021 So, life insurers can charge more but health-care insurers cannot? Maybe it is time to change that law. Are premiums or coverage being affected yet? Fortune recently reported that while several of the biggest U.S. life insurance companies aren’t yet asking customers for their vaccination status, a few insurers told the magazine they are doing so for people at high risk. It wasn’t clear from the article whether this is affecting premiums. A recent study comparing life insurance policies from 2014 through February 2021 found that premiums and coverage didn’t change a lot during the pandemic. The study did find some evidence that policy terms for the oldest individuals and those with high-risk health conditions did worsen. “Can health insurance companies charge the unvaccinated higher premiums?” Philadelphia Inquirer, September 5, 2021 My Medicare supplement increased significantly during Covid to the point where I am looking for another supplement plan. I have used it only once in about four years, for cataract surgery. “Can health insurance companies charge the unvaccinated higher premiums?” Philadelphia Inquirer, September 5, 2021 Are smokers being discriminated against in America? In short, yes. Should they be? Yes, but so should those who abuse alcohol, if you want to get consistent. The smokers do pay higher premiums, In life insurance, smokers definitely pay higher premiums, as do people who are obese. ValuePenguin, a unit of LendingTree that provides research and analysis, found that smokers typically payover three times more for life insurance than non-smokers. “Can health insurance companies charge the unvaccinated higher premiums?” Philadelphia Inquirer, September 5, 2021
So, should the unvaccinated pay three times more for premiums like smokers? That is an interesting idea and would make business sense. For more information, here is the Inquirer link: https://www.inquirer.com/health/coronavirus/can-health-insurance-companies-charge-unvaccinated-higher-premiums-what-about-life-insurers-5-questions-answered-20210903.html
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