How the Unvaccinated Raise Insurance Premiums for the Rest of Us

Under the Affordable Care Act (ACA), private health insurers cannot deny a person coverage or charge them a higher premium because of a pre-existing condition or because of their health status. 

Is being unvaccinated for Covid-19 a pre-existing condition? If it isn’t, the unvaccinated could be denied healthcare coverage, but perhaps they should be. 

The health care market is characterized by a significant cost-shifting problem. Right now, healthy, vaccinated individuals are paying the collective cost of the unvaccinated population’s Covid-19 related healthcare. The Covid-19 vaccine has been widely available for almost a year and has proven to be highly effective for preventing costly hospitalization and for mitigating “long-covid” symptoms, which can be very costly. It is so effective that while the unvaccinated population represents only 15% of adults in the U.S., it incurs more than 90% of the nation’s Covid-19-related healthcare costs. It is widely understood that those who remain unvaccinated are far more likely to be hospitalized for Covid-19, and require more specialized – and thus, more expensive – medical care. 

Even before the Covid-19 pandemic, there was a major cost-shifting problem burdening the healthcare system. Before the passage of the ACA, the insured population was essentially carrying the cost of the uninsured. While the ACA’s individual mandate has helped mitigate the issue, another ACA provision poses a new problem in the context of Covid-19. Because insurers cannot deny coverage based on a pre-existing condition, they have been unable to deny coverage to the unvaccinated. 

The unvaccinated population is incurring billions of dollars in healthcare costs, and insurance companies spread these costs evenly among policy-holders, whether they are vaccinated or not. Why should a policyholder who makes the responsible choice to get vaccinated have to pay the price of the unvaccinated patient’s bad decision through higher premiums?

Health insurers in the individual marketplace have interpreted the pre-existing condition provision of the ACA to mean that they can’t impose penalties for not being vaccinated, but some private and public employers have taken the step of penalizing unvaccinated employees to address this cost-shifting problem. 

Delta Airlines, rather than imposing a vaccine mandate, took the usual step of charging unvaccinated employees a $200 monthly penalty, essentially a higher insurance premium, to address the expectation of higher healthcare costs. 

Insurers themselves have also re-instated copays and deductibles for Covid-related costs that were waived at the beginning of the pandemic and before the widespread availability of the vaccine, but these affect both the unvaccinated and vaccinated. 

So long as vaccination status is considered a pre-existing condition for the purposes of health insurance, employer-imposed penalties seem to provide the best path forward for addressing the cost-sharing problem posed by the unvaccinated population’s disproportionately high healthcare costs. 

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