By Peter Johnson

In recent days, actuaries and economists have begun to estimate how much it will cost to care for those stricken by COVID-19, the disease caused by the novel coronavirus. Since the crisis is still at an early stage, and medical data collection and analysis is limited, those estimates have a wide range.

Covered California estimated in a March 22 report that the total cost of COVID-19 coverage for the national commercial market could range from $34 billion to $251 billion in 2020. FAIR Health in a March 25 report estimated a possible range of $362 billion to $1.449 trillion in charges for hospitalized patients and $139 billion to $558 billion in allowed amounts.

Given those figures, an increase in premiums seems inevitable. The Covered California report projected national premium increases for individual and employer plans in a range of 4% to 40% in 2021. Willis Towers Watson estimated in a March 26 report that self-funded employer plans could see their benefit costs increase by as much as 7%.

The distribution and extent of coronavirus infections is a critical factor in determining how much the medical response will cost. According to a March 25 Commonwealth Fund report, 44% of the U.S. population may be at elevated risk from COVID-19 due to age or chronic illness.

“We also see how it’s playing out differently in different cities. New York, right now, is really bearing the brunt of this. Other areas seem to have increases in the incidence as well. So particularly in those areas, the question is whether treatment and utilization of services is going to be constrained by the lack of hospital beds,” says Cori Uccello, a senior health fellow with the American Academy of Actuaries.

In areas where there are fewer clinicians and intensive care facilities, treatment could cost more on a per-patient basis, particularly if the population is at elevated risk.

The ongoing public policy and public health response will play a central role in the ultimate expense. If hospitals need to operate at or above capacity for several months, the cost of care could grow beyond present levels, according to the Covered California report.