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Vaccinations and insurance claims

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The majority of private health insurers in the U.S. have stopped voluntarily waiving deductibles and co-pays related to COVID-19 hospitalizations as vaccines have been widely available for more than half the year, and some private employers are charging unvaccinated workers more for health insurance.

But State Rep. Jonathan Carroll (D-Northbrook) wants health insurers to go further, filing legislation Monday that would force unvaccinated Illinoisans who come down with COVID to pay for any resulting hospital stay out of pocket beginning in 2023.

“We’re not saying people that aren’t vaccinated can’t get healthcare…but we’re at a point now where the vaccine has proven to be effective,” Carroll said. “We’re seeing more variants popping up, we’re seeing numbers spike, and generally speaking it’s the unvaccinated that are causing this problem.”

However, that’s illegal under the Affordable Care Act and other federal law, as reaffirmed in a bulletin from the federal Centers for Medicare and Medicaid Services in October.

“Plans and issuers may not discriminate in eligibility for benefits or coverage based on whether or not an individual obtains a COVID-19 vaccination,” CMS said.

Carroll acknowledged he’s already heard feedback on his idea to that effect, and called his proposal “a starting point” to explore other avenues to incentivize hesitant people to get vaccinated.

“This is really about, ‘What’s the responsible things to do?’” Carroll said.

While employers are allowed to charge unvaccinated employees more for their premiums through “wellness programs” that incentivize healthy behaviors, CMS said that option is limited to changing costs “and not for denying eligibility for benefits or coverage based on a health factor.”

Employers are taking advantage of the wellness program option in order to incentivize vaccine uptake among their workforces. Companies including Delta Airlines have announced plans to begin charging unvaccinated employees more in health insurance premiums. Delta announced the change in August and began implementing it last month.

Private companies aren’t the only ones trying out the strategy; Nevada could become the first state to add a surcharge to unvaccinated state employees’ premiums after a board that oversees state worker benefits voted last week to charge $55 monthly to unvaccinated workers. The money is meant to offset the cost of COVID testing for those who haven’t gotten their shots.

Wisconsin-based Mercyhealth, which operates three hospitals in northern Illinois, has taken a slightly different tact. Instead of higher insurance premiums, Mercyhealth introduced a $60 monthly “risk pool fee” for unvaccinated employees, which began getting dedicated from their wages in October.

After the new policy’s announcement in September, Mercyhealth told NPR last month that its employee vaccination rate rose from about 70% to 91%, with very few workers quitting in protest.

Delta, omicron and costly hospitalizations

All American adults have been eligible for COVID-19 shots for more than half a year, but a stubborn portion of the U.S. population 18 and over has not yet been vaccinated. Among all American adults, 71.5% have received at least one COVID vaccine dose, and in Illinois, that number is slightly higher: 73.1%.

But as new data began piling up this fall about the drop-off in immunity about six months after an initial course of Pfizer or Moderna vaccines, public health officials scrambled last month to adjust messaging about who needs a booster shot.

Just as the pandemic’s summer surge ended in Illinois, colder temperatures began pushing people inside, where the virus is more easily spread. That coincided with millions of adults’ six-month mark post-spring vaccine, though booster dose uptake has been relatively quick; more than 2 million Illinoisans have now gotten a third shot.

But while public health officials are still waiting for definitive understanding of how COVID’s newly discovered Omicron variant behaves, early data suggests it’s spread even more easily than Delta.

After a brief lull in mid-October, the number of new COVID patients admitted to Illinois hospitals on a daily basis has more than doubled in the last month. Aside from representing a dangerous trend as Christmas and New Year’s approaches, increased COVID hospitalizations is expensive.

From June through August of this year, approximately U.S. hospitals saw approximately 287,000 preventable COVID hospitalizations of unvaccinated American adults, according to a September report from the Peterson Center on Healthcare and Kaiser Family Foundation. Those preventable hospitalizations cost an estimated $5.7 billion — and that was before the pandemic’s most recent wave fueled by the virus’ Delta variant peaked in September.

Those costs are incurred by both insurers, the vast majority of which haven’t yet passed on the increased financial burden to consumers, though that’s expected in the long-term.

The average cost of a COVID patient’s hospital stay is about $20,000 dollars, according to the Peterson Center and Kaiser report, and could be upwards of $50,000 for long stays and complicated cases. But fully insured patients would only end up paying about $1,300 out of pocket.