S&P Estimates a Severe Coronavirus Outbreak in US Could Cost $90 Billion in Insured Medical Expenses (cnbc.com)

S&P Estimates a Severe Coronavirus Outbreak in US Could Cost $90 Billion in Insured Medical Expenses

  Friday, March 13th, 2020 Source: cnbc.com

A severe coronavirus pandemic in the U.S. could cost the nation’s health insurers roughly $90 billion in medical claims, leading to losses that could force some insurers to tap into reserves to pay those costs, according to a new analysis from S&P Global analysts.

The analysts calculate that under a more moderate scenario, COVID-19 medical costs would top $30 billion. The impact of a moderate outbreak would be in line with a very strong flu season, which would pressure profits, but not result in a loss.

“The key difference is saying how many people end up in a hospital … in the hypothetical severe scenario we are looking at about 4 million people in a hospital, whereas in a moderate scenario we’re looking at about a million people,” explained Deep Banerjee, lead insurance analyst at S&P Global Ratings.

The analysts modeled a pandemic stress test, looking at the 170 million people covered under the insurers’ Medicare Advantage, small employer group, and individual health insurance plans, as well as state Medicaid contracts.

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