Unvaccinated People May Have To Pay More For Health Insurance

More employers and insurance companies are considering raising health insurance premiums for employees who choose to forego vaccination.

Starting in November, Delta Airlines will charge unvaccinated employees an extra $200 a month for the company health plan, citing the high cost of COVID hospitalizations.

"It's similar to what already occurs with smokers," said Tom Campanella, Healthcare Executive in Residence at Baldwin Wallace University.

Unvaccinated Americans are at higher risk to develop severe cases of the virus. Ohio Department of Health data shows that unvaccinated Ohioans account for more than 96% of hospitalizations for COVID-19 in 2021.

Industry analysts said the average cost of a COVID hospitalization ranges from $30,000 to $50,000 in Ohio. A Kaiser Family Foundation report estimates that preventable hospitalizations for COVID among unvaccinated Americans cost the healthcare system nearly $6 billion between June and August.

"It all winds up getting back into premiums somehow," Campanella said. "Somebody has to pay that cost."

Some companies are choosing to shift the burden of those costs from all employees to only those who choose to forego vaccination.

For companies like Delta, which is not requiring employee vaccination, it may also incentivize more employees to get the shot.

"Employers are looking at it as an incentive to get their employees vaccinated. I also think it is an attempt to get control of some of the costs related to COVID," said Kelly O'Reilly, President and CEO of the Ohio Association of Health Plans, the trade association representing 15 Ohio health insurance providers.

O'Reilly said she's not aware of any Ohio-based companies that have implemented higher premiums for unvaccinated workers yet, but she expects it to become more common.

"I think they're looking to keep their employees safe, to keep their businesses operational and then, to keep costs down," O'Reilly said.

O'Reilly and Campanella said self-insured companies can more easily increase premiums for unvaccinated employees.

Self-insured plans make up nearly 40% of health insurance coverage in Ohio and are most common among large and medium-sized companies.