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Fate of commercial insurance under the COVID-19 pandemic

April 6, 2020

Topics: Quote of the Day

Covered California, March 22, 2020

This policy/actuarial brief provides projections and models the potential costs associated with coronavirus (COVID-19) testing and treatment on the national commercial health insurance markets (individual, small and large group employers — including both those employers that are insured and self-funded). There are additional cost and access implications for Medicare, Medicaid, other public programs, and the uninsured, but this brief focuses only on the impacts on Americans with commercial insurance coverage.


The potential impacts detailed in this report reflect what could happen absent decisive federal action. If these impacts are not mitigated, the public health and economic consequences to consumers, small and large employers and health insurers are potentially staggering, including:

  • Consumers and employees not getting needed testing or treatments due to cost barriers, both for COVID-19 but also for other health conditions.
  • Employers no longer being able to offer affordable coverage, or dramatically shifting costs to employees.
  • Consumers and employers no longer being able to afford coverage, leading to employer groups dropping coverage or individuals deciding to go uninsured.
  • Even more unsubsidized marketplace enrollees being priced out of individual markets.
  • Small insurers risk insolvency, and if they close, put covered consumers at financial risk, damaging competition that benefits consumers and the employers that purchase on behalf of millions of Americans.
  • Dramatic cost increases, many of which will be borne by the federal government in the form of higher Advanced Premium Tax Credits (APTC), or by both federal and state governments paying for increased Medicaid enrollment as individuals and employers drop coverage.



By Don McCanne, M.D.

There have been many similar reports to this one. Although we already have an inequitable, fragmented, dysfunctional health card financing system, in spite of the highest per capita health care spending of all nations, the current COVID-19 pandemic crisis is revealing the severe instability in our health care financing infrastructure.

MSNBC’s Yasmin Vossoughian: “Our health care system seems to be crumbling underneath this crisis. There is not enough support for the health care system; there is not support for the American people inside of the health care system. Are you now reconsidering your position when it comes to single payer health care?”

Former Vice President Joe Biden: “Single payer will not solve that at all.”

Sorry, Mr. Biden, you are wrong.

All nations are now facing this pandemic. They each have to deal with the added costs of the burden placed on their public health systems and the costs of rendering health care to those who develop COVID-19. But the United States is unique in that the instability in health care financing and coverage will expose tens of millions to personal financial hardship and possibly even bankruptcy. That does not happen in nations that have stable, universal health care financing systems.

Mr. Biden, a single payer, Medicare for All program would remove financial barriers to care and prevent financial hardship due to medical bills. Yes, additional public health measures are required, and the nation would benefit from better social insurance programs covering other individual and family costs related to the pandemic, but that is certainly no reason to reject the vastly superior Medicare for All model of financing health care. And, remember, it is the people who are the patients, not the commercial insurers.

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About the Commentator, Don McCanne

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Don McCanne is a retired family practitioner who dedicated the 2nd phase of his career to speaking and writing extensively on single payer and related issues. He served as Physicians for a National Health Program president in 2002 and 2003, then as Senior Health Policy Fellow. For two decades, Don wrote "Quote of the Day", a daily health policy update which inspired HJM.

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