The Coronavirus pandemic caused an economic disruption all over the world. An economic slowdown emanated from the pandemic. There is a long list of issues that have arisen and sectors that have been affected as a result of the Coronavirus outbreak. For the insurance industry, there has been a slow down in business, travel, and an increase in health claims as a result of the pandemic. This article however focuses on the effects of the outbreak on the health insurance industry and how the health insurance providers have responded to it.
Assessing the effect of the pandemic on health insurance providers on a global level may be difficult because the impact will vary from country to country. The impact will depend on the level of socio-economic development of the country and specifically the health sector of the country. Another reason why the impact differs from country to country is the number of cases and deaths vary between countries. However, regardless of the specific impact, health insurance providers have generally been impacted by a high number of illnesses and disability claims from people affected by the pandemic.
Effects of Corona Virus on Health Insurance
The attack of Coronavirus has had a lot of adverse effects on the health insurance industry. Irrespective of the adverse effects, there have been some positive effects of the virus on the health insurance industry. Some of the effects are highlighted below.
Loss of jobs meant the loss of insurance
It is no news the level of unemployment has risen drastically as a result of the pandemic and subsequent lockdown of economies. For many people, the loss of their job was the loss of their insurance. Before the pandemic, statistics show that majority of people received employer-based health insurance. This is the health insurance gotten as part of the employee benefits from employers. So, a lot of people lost their health insurance at a time when it was very important for them to have health insurance. For the health insurance providers, this meant fewer clients as a result of the pandemic.
Increase in the inability to pay premiums
The combined effects of the lockdown, economic shut down and increase in the number of unemployed, also meant that cash inflow and even outflow was slow. As a result of this, a lot of people channeled the money they had to provide for their basic needs for survival. People were thus unable to pay for their insurance premiums. The consequence of nonpayment of premium means the policyholder will no longer have the coverage provided by the insurer. An alternative for them may be Health Share.
Increased awareness of health insurance policies
For many reasons, a lot of people do not even bother with or just ignored the need to have a health insurance policy. The uncertainty surrounding Coronavirus has however caused people to rethink the importance and need of having a health insurance plan. The virus has increased awareness of the available health insurance policies. Statistics show that more people are enrolling for general health insurance covers. For obvious reasons, this is a positive reaction for the health insurance providers.
Increased government participation
In a lot of countries, the health insurance providers are private companies and in others, it’s public which means it is provided for by the government. With the outbreak of Coronavirus, government participation in the provision of a general health insurance plan for citizens has been on the increase. One main reason for this is that the attack of Coronavirus has also shown the need for affordable health care because it left millions of people who were without any health care insurance vulnerable to high out of pocket expenses. For the private providers of health insurance, if people opt to use the government plan which is usually cheaper, this might mean a further reduction in the number of people enrolling in the policies they provide.
Increase in claims
As expected, the Coronavirus outbreak caused an increase in the number of claims. This has been a result of the number of illnesses and deaths caused by the virus.
The Response of Health Providers to the Effects of Coronavirus
The response of health providers to the effects of Coronavirus has been dependent on the jurisdiction and the areas of the industry in that jurisdiction has been affected. It has however been stated that the Coronavirus outbreak could be a turning point for the insurance industry because it has given them the opportunity to demonstrate a higher purpose and value to society. The response from insurers can reshape the public’s view of health insurance providers.
In China, a leading health insurance provider sets up an emergency fund to help in the fight against the virus. They also made it easier to process claims. The claims process was fast-tracked. This was not just innovative; it also showed value for the life and wellbeing of the customers.
In the USA insurers announced the intention to waive co-pays and other forms of cost-sharing. Co-payment in health insurance is the arrangement in which the insured pays a specific part of the medical expenses out of pocket. The insurance provider then pays the remaining sum. This saves the policyholders from paying the usual cost for out of pocket expenses.
In South Africa, a leading health insurer is providing cover for any disease or disability caused as a result of complications to the infection of Coronavirus or even any other virus.
Generally, health insurers in many jurisdictions granted policyholders different types of flexible premium payment arrangements. One such arrangement is extending the time for premium payment. Insurance providers in many jurisdictions gave notice to the fact that they were allowing for an extended grace period for those who were facing financial difficulties due to Coronavirus. This means that people will no longer lose their health plans just because of the inability to pay the premium at the usual date. Another flexible arrangement available is paying a premium on installment.
Insurers also turned to technology and many other innovative means of delivering care and making claims. This was done with the aim of preventing overcrowding and limiting the spread of the virus. Many insurance providers also broadened the scope of the general plan to cover sicknesses arising from coronavirus. In some jurisdictions, health care workers were given free health coverage.
The impact of Coronavirus on the health insurance industry has been multifaceted. However, the response from most of the insurance providers has been with the interest of the policyholders in mind. They have also begun to search for long term solutions to the lackadaisical attitude of people towards health insurance.
If you’re exploring health insurance or looking for alternative healthcare plans, Life Insurance, or supplemental insurance plans feel free to reach out to our professional agents and see what program or programs might be right for you, that can help you through this time. Call Vivna, Inc. today to learn more here: 866.793.2301