UC Berkeley study finds COVID-19 has cost CA insurers $2.4B

Berkeley Way West
Karen Chow/File

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A UC Berkeley public health study published Thursday found that COVID-19 has cost California’s public and private insurers about $2.4 billion in testing and treatment.

In early April, researchers from UC Berkeley’s health economics research-focused Nicholas C. Petris Center began investigating both the current and potential costs of coronavirus-related expenses. The study found that the COVID-19 costs for California insurers is roughly six times the annual cost to treat seasonal influenza in the state.

“A lot of studies are looking at lost hospital revenue because there are a lot of canceling elective surgeries,” said campus alumna and study co-author Taylor Wang. “But, this (study) is really looking at the direct cost to hospitals for insurers for COVID.”

To determine the costs, the researchers used current COVID-19 infection rates and hospitalization data.

The estimated costs were broken down on a county level based on what type of insurance was being used or if the patient was uninsured, according to campus alumna Alexandra Peltz. Hospitalization expenses were then adjusted based on age, which impacted the number of people on ventilators.

The $2.4 billion represents the current cost of total care for all payer groups, including those on Medicare, those on MediCal, those on commercial insurance and uninsured individuals. In terms of the breakdown of the different proportions of the total cost, 60% is commercial, 25% is Medicare, 10% is MediCal and 5% is uninsured, according to Wang.

The researchers also found a wide variation across the state, with Northern California prices generally being much higher than those in Southern California, according to Daniel Arnold, research director of the Petris Center.

According to the study, Bay Area counties, such as San Mateo and Marin, have had some of the highest costs across the state.

In addition to differences in costs by county, there are also differences in prices by payer group.

“Older people are on Medicare, and so when you compare those prices to commercial, it’s pretty interesting because most younger people are going to be on commercial,” Peltz said. “It really highlights how much more those prices are.”

As for the study’s future plans, the researchers hope to track the potential long-term costs from the side effects of COVID-19.

Contact Aryia Dattamajumdar at [email protected] and follow her on Twitter at @AryiaDm.