50% of Coronavirus Hospitalizations Covered by ESI Cost Over $25K

November 15, 2022 - While employer-sponsored health plans’ total costs for coronavirus hospitalizations could range from $10,000 to over $38,000 in 2020, employee costs remained fairly consistent, a Peterson-Kaiser Family Foundation (KFF) Health System Tracker brief found.

The researchers leveraged 2020 MarketScan inpatient data to assess the rate of coronavirus hospital admissions. They “trimmed” enrollee claims at the extreme ends of the cost spectrum.

The results found that the average employer-sponsored health plan member’s coronavirus hospitalization led to a bill of more than $41,611.

For the members themselves, this could mean on average anywhere from $1,280 to $1,880 in out-of-pocket healthcare spending depending on whether or not the plan required cost-sharing. A quarter of hospitalized employer-sponsored health plan members were left with a bill of more than $2,900.

However, the average member’s spending might have shifted in 2021 and 2022 because many payers instituted temporary out-of-pocket spending waivers at the beginning of the coronavirus pandemic. Since many—though not all—of these cost-sharing waivers ended in 2020, employee out-of-pocket healthcare spending for coronavirus treatment is expected to be higher in subsequent years.

Half of all coronavirus hospitalizations among employer-sponsored health plan members cost more than $25,000. A quarter of coronavirus hospitalizations cost more than $38,000.

The median total cost of a coronavirus hospitalization for those with employer-sponsored healthcare coverage was a little over $25,000 in 2020. The 75th percentile amounted to nearly $38,890. And the 25th percentile surpassed $16,000.

Another factor in the visit’s cost was whether or not the patient required an intensive care unit (ICU) stay.  The cost for a hospitalization that included an ICU stay totaled, on average, almost $65,570. In contrast, the cost without an ICU stay was less than half of that, averaging around $26,950.

However, while the total costs differed dramatically based on this factor, employees’ costs were not significantly impacted by an ICU stay. Across all coronavirus hospital admissions for employer-sponsored health plan members, there was only a $161 difference between the average employee healthcare spending with an ICU stay versus spending without an ICU stay.

For employees who were required to share some of the cost, the difference was even smaller ($141 difference).

The researchers placed this data in the context of the financial hardships that households experienced leading into 2020. A little more than a fifth of all single-person households and 13 percent of multi-person households did not have sufficient savings to cover typical employer-sponsored deductibles.

“This can lead to financial hardship and difficulty covering the cost of a COVID-19 hospitalization, despite the patient’s insured status,” the researchers noted.

The brief concluded by pointing to how these costs might create future challenges.

“Most of the total cost of COVID-19 treatment is covered by an insurer if the patient’s employer is fully insured, or the employer itself if it is self-insured. This may put upward pressure on premiums in future years, affecting all enrollees, regardless of whether they had a COVID-19 hospitalization,” the brief stated.

During the rate-setting period in 2022, payers were divided over whether or not to factor coronavirus pandemic effects into their premium-setting process. The brief indicated that most insurers are anticipating a small impact, similar to the low impact on 2022 premiums.