As the Wuhan Novel Coronavirus Covid-19 spreads across the globe, its effects on the US healthcare system have been rather diverse. America is a unique case study for disease outbreaks such as Covid-19 because, unlike an overwhelming majority of the world, the US does not have universal healthcare. Out of 33 other developed nations, the US is the only state that still relies on a private healthcare industry.

Consequently, some of the effects of the Covid-19 across the American healthcare industry can be considered distinctive to the US. However, as in other states, a general panic has set in, causing a rush for medical supplies such as face masks and a decrease in travel. 

The Unique US Healthcare System 

In a privatized healthcare system, insured persons are often required to pay for their premiums, or plan fees, in whole or in part. Employers may opt to cover a percentage of the premium for its employees. Low income families and individuals may also qualify for government subsidies and reduced rates.

Due to the nature of the industry and government regulations, health insurance companies generally differ from state-to-state. A person would not, for example, expect to move from Texas to California and expect to retain their existing insurance provider. 

Plans vary greatly, with some covering the initial fee for a visit to the doctor and others charging a copay, a small initial amount paid at the doctor’s office before the appointment. 

Insurance plans generally spell out precisely what is covered and what is not. For example, during pregnancy, Plan 1 may pay for three days in hospital while Plan 2 only covers two days. For serious illness and injuries, insurance plans have a deductible—a bill amount that the insured person must pay before the insurance company will pay for a claim. 

In the case of a broken arm, for instance, the doctor may only charge $5,000. If your deductible is $2,000, then that is all you would pay while the insurance company picks up the remainder. If your deductible is $6,000, however, you must pay for the full amount.

All of this can be rather complicated and because rates continue to increase, many Americans have reconsidered their plans with some opting to do without health insurance. 

Refusing Medical Care to Avoid Bills

This situation, one in which Americans have to question whether they can afford medical help, has created a terrible and toxic cocktail for the Covid-19 outbreak. 

“One of the disadvantages the US has in trying to tackle Covid-19 is that many people avoid going to see a health care provider because they are worried about the cost,” said Gavin Yamey, professor of global health and public policy at Duke University.

A 2019 Gallup and West Health poll found 26% of American adults put off seeking medical care due to costs and 19% went without medication in the previous 12 months.

Many workers in the US also do not have guaranteed sick leave. As a result, employees who feel sick may feel compelled to report for work anyway where they will spread the virus instead of remaining home and resting. The mentality that business operations are more important than employee health is a pillar of corporate America. In times of outbreaks, it is deadly.

No Immediate Effect on Insurance Prices

In terms of an impact on health insurance companies, there appears to be very little financial risk at the present time. While more health insurance claims could be filed due to Covid-19, they are still immaterial in the overall financial picture. 

“I would think that, even with some escalation from here, you’re not talking about anything that’s material,” said David Windley, analyst at Jefferies. “If we get an outbreak and the impact gets into the tens of thousands, like it is in China, we’re probably having a very different conversation.”

Insurance companies can simply factor the cost into future pricing negotiations, Windley added.

Coronavirus is Boosting Urgency of Adopting Universal Healthcare

Although the Covid-19 virus may not have an immediately-foreseeable financial risk to US health insurance companies, it is still having other impacts. Ironically, the outbreak comes during the middle of the US election season as Bernie Sanders pushes for free, universal healthcare. The spread of Covid-19 is helping justify the need for it.

Health insurance companies are also experiencing increased usage of tele-medicine programs. These communication portals, whether an app or a phone call, allow medical personnel to pre-screen individuals before they schedule a doctor’s appointment. Tele-medicine programs have the added benefit of limiting individuals coming into contact with other patients and potentially spreading diseases.

More individuals are considering travel as a result of increased uncertainty in the future. As US health insurance is generally not accepted in foreign hospitals, travelers are also preparing for the possibility of extended hospital stays by purchasing travel insurance.

A Strained Supply Necessitates Policy Changes

Other effects are felt beyond insurance companies in other areas of US healthcare, namely hospitals and medical offices. The demand for face masks has crippled global supply to the extent that American healthcare providers are rapidly searching for alternatives. 

In the immediate future, they are turning to lesser-quality supplies, but there is a major interest in reusable supplies now. The ability to sterilize and reuse equipment is also eco-friendly. As medical facilities institute these measures during the coronavirus outbreak, they will likely remain in force after the outbreak subsides. A permanent shift to reusable supplies could potentially prevent a shortage in future emergencies.

Supplies, both face masks and common prescriptions, depend heavily on materials from China. The result is that healthcare providers are looking for alternative markets to source materials. Sourcing materials from outside of China would also alleviate concerns of infected products since the disease originated there.

“This is just the tip of how this is going to impact healthcare because we are so dependent on foreign markets,” said Mark S. Kestner, chief medical officer of healthcare technology company Tractmanager. “Hospitals right now are struggling to address it.”

The US healthcare system is inherently unique, particularly compared to other developed nations, and that is not a positive assessment. Especially during the coronavirus outbreak, sick individuals need access to medical assistance in order to contain it, partly for the sake of public health.

Instead, Americans feel pressured to work while ill, avoid seeing a doctor due to costs, and ultimately are put in a situation where they may well spread the virus. The US health insurance industry is an incredibly stable monolith due in part to soaring costs year-after-year. Even amid coronavirus fears, health insurance companies are some of the few that are not witnessing increased costs, although that could change with a severe uptick in the infection rate.

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