The Society of Actuaries Announces New Actuarial Model Examining Health Costs Under COVID-19
Schaumburg, IL (June 30, 2020) – The Society of Actuaries (SOA) released a new modeling tool to assess the impact of COVID-19 on health care insurance estimates for 2021. This model and an accompanying research report help illustrate the level of the COVID-19 outbreak, the potential scenarios over the next half year and the direct costs from this pandemic.
During March through May 2020, there have been dramatic changes in the use of health care services in the U.S., stemming from the COVID-19 outbreak and state physical distancing requirements. The project was supported by a $150,000 grant from the Robert Wood Johnson Foundation.
Based on this research model, the SOA determined that each month in which a high level of social distancing is enforced leads to an approximate four percent decline in projected annual insured health care costs. Once physical distancing requirements are relaxed, patients and physicians are expected to reschedule some of the deferred health treatments and non-urgent health care services. The model also explores the cost per capita for health plans to test patients for COVID-19 and can model potential future diagnostic and vaccine costs. All of this information helps to inform insurance carriers and regulators of the potential costs that may emerge.
“This modeling tool helps insurance carriers and regulators as they look to 2021 health insurance costs, the impact of COVID-19 treatment costs and how these trends may progress over the next year,” noted R. Dale Hall, FSA, MAAA, CERA, CFA, managing director of research at the SOA. “We developed this model to help understand the first wave and plan for a variety of potential future scenarios of COVID-19, as well as to see how the different factors play out over time, such as when there is a vaccine and how insurers cover future costs.”
About the SOA
With roots dating back to 1889, the Society of Actuaries (SOA) is the world’s largest actuarial professional organization with more than 31,000 actuaries as members. Through research and education, the SOA's mission is to advance actuarial knowledge and to enhance the ability of actuaries to provide expert advice and relevant solutions for financial, business and societal challenges. The SOA's vision is for actuaries to be the leading professionals in the measurement and management of risk. Visit soa.org.