Experts are considering if insurance companies have the right to raise health insurance premiums for unvaccinated individuals. This is similar to how the Affordable Care Act (ACA) allows health insurance companies to charge smokers higher premiums than non-smokers. The hope is to incentivize people to get vaccinated against COVID-19, but it is unclear if this legislation will be passed. Employers are also looking to implement different types of strategies to encourage workers to get vaccinated. Insurance surcharges, which can amount to hundreds of dollars per year, are currently being considered.
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Will Health Insurance Premiums Rise?
At this time, there is a very small chance there will be bipartisan support to allow health insurance companies to raise health insurance premiums for those who are unvaccinated. Additionally, there is insufficient evidence base to back an increase in health insurance premiums.
Dr. Matthew Neidell, Ph.D., an economics professor in the Department of Health Policy and Management at Columbia University, explains, “My sense is covid cases aren’t expensive enough to justify higher premiums. Health care costs from smoking are quite high, so insurers can make a valid case raising premiums for smokers is cost-effective. The overwhelming majority of covid cases are minor illnesses that don’t require any formal health care, so it would be hard to justify raising premiums.”
Raising Health Insurance Premiums to Incentivize COVID-19 Vaccination
Policymakers and employers alike are searching for ways to modify health insurance premiums to encourage COVID-19 vaccination. Dr. Neidell shares, “One could say they raise premiums to create an incentive to encourage people to vaccinate, but it’s probably not a high enough amount to move the needle, and it’s not clear insurers should be playing that role.”
While it may not be possible for health insurance companies to raise premiums, employers can increase the cost of premiums by up to 30%. Two main options are being considered by employers to increase vaccine uptake:
- Increase premiums for those who are not vaccinated
- Implement a health insurance surcharge for employees who are not vaccinated
Health Insurance Surcharges
It seems more likely that employers will enact their own policies to encourage vaccination. From a health care cost perspective, unvaccinated individuals can cost their employers excessive amounts of money if they need to be hospitalized. Therefore, employers are considering charging an extra monthly fee to those who are not vaccinated.
In 2020, the average cost of an individual employer-sponsored health insurance premium was $7,470 per year. Employees will likely be averse to any additional increase to already high premiums. Getting vaccinated can also save individuals money in the long run by reducing avoidable COVID-19 cases. According to a statement released in May, as long as providing proof of vaccination is voluntary, significant incentives to get vaccinated are allowed.
The Food and Drug Association (FDA) does not currently mandate COVID-19 vaccination, but Tyson Foods, United Airlines, CNN, the U.S. military, and other companies have imposed vaccine mandates for their employees. These mandates mainly apply to employees who interact with the public. As long as workers can get exempt from the requirement for legitimate medical or religious reasons, these policies are deemed legal.
Flu shots have long been required for health care providers, so COVID-19 vaccine mandates in this context are already in place in many hospitals. If the FDA grants full approval to the vaccines, we will probably see many more companies mandating vaccination.
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Companies that have Announced Vaccination Plans
Over the past few months, employers have been developing plans to return to the office and how to do so safely. The table below lists companies that have announced their vaccination plans and what it entails.
|Delta Air Lines|
|The New York Times|
|Union Square Hospitality Group|
|The Walt Disney Company|
|The Washington Post|
Importance of Vaccination
As the Delta variant continues to spread, vaccination rates remain low in some areas. In places where there is a low rate of vaccination, the SARS-CoV-2 virus can continue to spread and mutate into new strains.
COVID-19 Vaccination Tracker by State
COVID-19 Health Insurance Premiums for Unvaccinated Individuals Frequently Asked Questions (FAQs)
Some companies are implementing health insurance surcharges for unvaccinated employees, and others are offering health insurance premium discounts for those who do get vaccinated. Below we answer some common questions regarding COVID-19 vaccine policies.
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Will my employer require COVID-19 vaccination?
Vaccine mandates are controversial. because employers do not want to lose their employees. Some employers worry that mandating COVID-19 vaccination will not be effective and might force employees to leave the company. Instead, many employers are working to make getting vaccinated easier for their employees by offering paid time off to get vaccinated.
What are COVID-19 vaccine incentives?
Vaccine incentives are monetary incentives for workers to get vaccinated. Companies are willing to pay substantial amounts of money to employees in order to return to the office sooner. Two-thirds of people reported they would get vaccinated if offered a financial incentive.
When will we return to the office?
Due to the current situation of the Delta variant, companies are pushing back their return-to-office dates. Previously, many offices planned to reopen as early as summer 2021, but now we see companies push this date to January 2022. When we can return to the office depends on how quickly we can reach herd immunity through vaccination and if we can prevent the development of new variants.
COVID-19 vaccination has created a complicated situation for health insurance companies and employers. In the coming weeks, we will almost certainly see an increase in mandates despite the controversy that surrounds the debate. At this time, experts are not predicting health insurance premiums to rise from the side of insurance companies.
While policymakers are figuring out how to encourage vaccination without damaging effects, it is important to understand how our personal choices are affecting those around us. Keep your coworkers, family, and friends safe by getting vaccinated today. If you need help finding an appointment, Mira is here to help.
Alexis Bryan MPH, is a recent graduate of Columbia’s Mailman School of Public Health. She is passionate about increasing access to care to improve health outcomes. Outside of work, she loves to travel, read, and pay too much attention to her plants.