As the coronavirus pandemic weighs on the health care system, the insurance industry looks for government assistance. Yahoo Finance’s Anjalee Khemlani joins Seana Smith to break down the details.
SEANA SMITH: Well, turning to the health care sector now, American insurers expanding coverage for coronavirus-related treatment. And as this happens, there are questions rising about how insurers are going to afford this and whether or not they'll need to ask for federal aid. Here digging into this, we have Anjalee Khemlani. And, Anjalee, I know that you've been speaking with executives in the insurance industry. What are the expectations at this point?
ANJALEE KHEMLANI: Right. So, Seana, it's actually still a mixed bag, whether you talk to analysts or strategists or the executives themselves. They seem to be under the impression that they will not necessarily see as severe an outbreak here to impact their bottom line. So there's a couple of things at play here right now. We've got all the major insurers covering testing and visits related to COVID-- inpatient as well. It varies on whether that's in network or out-of-network or both.
And so looking at that cost that they're taking on, waiving the co-pays, waiving the patient share portion of that, plus taking on the cost itself to reimburse providers is going to be a significant number. But on the flip side, they're also saving a lot of money, because the same thing that is harming the hospital industry, which is a reduction in elective surgery which is where a lot of money does, in fact, go, that has stopped.
And so that's where insurers are seeing a lot of savings. And so the question of whether or not they'll actually need federal aid, whether or not they'll end up saving at the end of the day, or if this outbreak does get worse, whether or not they'll end up having to dip into reserves, and what does that mean for 2021 premiums? So there have been some reports out that show numbers, you know, anywhere between 4% to 40% of increased premiums as well as for the self-insured plans, which is what a lot of large employers are on somewhere in the 7% range in addition to the annual about 5% that they usually end up tacking on. So really still a mixed bag out there, but of concern, especially if you look at the fact that the trade lobbying group already for the insurers has asked Congress for some sort of mitigation in advance. So that's something that we have to keep an eye on.
SEANA SMITH: All right, Anjalee, thanks so much for that.