Jim de Bree | Unvaccinated and Insurance Costs

Jim de Bree
Jim de Bree

Many states are engaging in promotional activities in order to encourage people to get vaccinated. Clearly we won’t put COVID-19 behind us until we achieve herd immunity, but the anti-vaccination sentiment among a significant segment of the population may prevent us from achieving herd immunity.  

These promotional activities may seem frivolous, but in addition to health concerns, there is an economic reason behind these efforts. As we will find when we renew our health insurance next fall, premiums will likely increase because health care costs have increased significantly as a result of the pandemic. Treating COVID-19 is expensive for those who require hospitalization and for long haulers who experience health problems for a protracted period of time after contracting COVID-19. 

Those costs will undoubtedly be baked into the cost of obtaining health insurance in the coming years.  

Those who have been vaccinated are less likely to require hospitalization and other expensive treatments from COVID-19. Instead, when the next wave comes, it will be the unvaccinated who bear the brunt of the COVID-19 cases and will incur the lion’s share of COVID-19-related treatment costs. According to a recent study, new COVID-19 incidence now occurs predominantly among the unvaccinated. This is largely preventable simply by getting vaccinated.  

Thus, the unvaccinated will drive up health care costs for everyone. Perhaps a better incentive for vaccination would be to place the unvaccinated in separate insurance risk pools or to impose a surcharge on their health insurance premiums.  

Normally, I believe the best way to reduce health care costs and insurance company profiteering is to have large inclusive insurance pools that spread the risks over the entire population and allow for the greatest volume purchasing discounts. However, when a segment of the population intentionally disregards society’s attempts to ameliorate a communicable disease, why shouldn’t they bear the economic consequences of their actions? 

Historically, some have argued that people who engage in poor health habits such as smoking, overeating, etc., should also be charged higher premiums or placed in a separate insurance risk pool to discourage their unhealthy behavior. I always felt that is a slippery slope, which can be manipulated to maximize insurance companies’ profit at the expense of consumers. Thus, I have been hesitant to go down that path.  

However, COVID-19 is different, because unlike obesity, failing to get vaccinated can cause this disease to spread. Obesity and smoking are not communicable diseases. Furthermore, if COVID-19 continues to manifest itself in a large unvaccinated portion of our population, it has an increased chance of mutating into a variant that is resistant to vaccines, thereby placing the vaccinated population at risk.  

For the segments of the unvaccinated population who are uninsured or are covered by Medicaid and do not pay for their own insurance, perhaps some sort of other financial incentive could be provided for them to get vaccinated.  

What I have written herein conflicts with my historical views toward funding health care, but the need to attain herd immunity against COVID-19 is so great that we have to consider ideas that may previously have been incompatible with existing health care funding mechanisms.  

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

Related To This Story

Latest NEWS