The Food and Drug Administration (FDA) fully authorized Pfizer’s COVID vaccine on Monday for use in people over the age of 16. This moved the vaccine from an Emergency Use Authorization (EUA) to regular approval. Within hours of the FDA approval, companies, municipalities and other large employers started to announce vaccine mandates.
Delta Airlines is one of those companies. They are applying a moderately strong stick approach. Unvaccinated individuals will see their company sponsored health insurance premiums increase.
BREAKING: Delta Air Lines says unvaccinated employees must pay $200 per month surcharge for health insurance. pic.twitter.com/Lye141Oed9
— Sam Sweeney (@SweeneyABC) August 25, 2021
Actuarially, Delta Airlines is partially risk rating their health insurance pool. A group of employees who are statistically likely to run up big claims will be paying more in premiums. Risk-rating is unusual in the US health insurance system at this time. The ACA bans most forms of risk rating in the fully insured small group and individual markets with carve-outs for age and smoking status. ERISA usually regulates large, employer groups that self-insurer like Delta. Here, employers must offer a class of employees truly community rated premiums. However there is a carve-out as Sabrina Corlette of Georgetown explains:
Federal rules allow for two types of wellness programs – participatory, where the incentive is based on whether the employee participates in the program – or “health contingent”, where the employee actually achieves a health-related target. 6/13
— Sabrina Corlette (@SabrinaCorlette) August 25, 2021
What do we know about wellness programs and behavioral surcharges?
They don’t do much good.
The ACA tobacco surcharge has not been shown to increase smoking cessation attempts. Instead, it merely increases adverse selection as reasonably healthy smokers look at their net premiums even after subsidies and decide that the combination of the subsidized base amount and the non-subsidized surcharge makes the ACA a bad deal so they don’t buy coverage.
Rigorous evaluations of wellness programs in a variety of contexts show no changes in expenditures, behaviors or intermediate or final health outcomes.
A vaccination wellness program is a bit different than the other workplace wellness programs in that it involves two distinct decisions three to six weeks apart and no other changes in behavior. However, if we think that it is still a wellness program with a modest stick attached to it, we should not anticipate huge changes in behavior.
More importantly, we need to go back to thinking if we want to engage in risk rating as we discussed earlier this summer:
In health insurance, we aren’t often making that same decision that experience and risk rating is just. We, as a society, think that there is a significant component of luck that is randomly distributed that is highly correlated with costs. And if we think that luck matters a lot and that the provision or non-provision of affordable and useful insurance produces lots of suffering that we don’t want to see, then pure risk rating goes out the door. We’ve mostly made the decision as a society that pure risk rating produces bad things in the healthcare setting…
This is a political and social decision.
Going to a broader sense of risk rating in health insurance is a political and moral decision.
It could work.
It could have consequences that we either do or do not want.
I understand the frustration. I want to not worry about sending my currently unvaccinated nine year to school with hundreds of other unvaccinated kids every day. I want to not worry that my mother who has a medical history that looks like a CVS receipt won’t be exposed to an infection that could beat her vaccinated immune system. I don’t want to worry, and that means a combination of societal behavioral changes like increasing ventilation and regular, routine masking when indoors and mass vaccination. I’m frustrated. I’m confident that many Jackals are also frustrated. It is two shots, with the biggest unknown is whether the post jab celebratory food is pancakes or ice cream, and yet tens of millions of people still refuse to acknowledge that they are part of a broader society and their behavior generates benefits and costs that other people can not avoid paying.
But do we want to go down a path of risk rating health insurance again with a system that is unlikely to produce significant positive behavioral changes?
FelonyGovt
Don’t know, but as you say, I’m mad as hell about the ignorant and proudly in-your-face unvaccinated. My feeling is we do need to make them pariahs. It’s sad it’s come to this.
Very interesting post.
Barbara
My employer is mandating vaccination with the usual narrow exemptions for anyone who needs/wants to go to the office. Delta has a lot more public interactions than we do. This is Delta mostly protecting itself, not its customers. Not impressed.
stinger
Make them pay more for coverage? Deny them coverage? Deny them access to restaurants and airplanes and schools and workplaces? I don’t know how best to deal with this level of selfishness, compounded by ignorance, stubbornness, fear, and you’renotthebossofmeism, in an open society but we need to do something. Won’t someone think of the nurses??
Anonymous At Work
Calculus may have involved United issuing a blanket mandate prior to approval without immediate blowback, i.e. Florida and Texas banning the airlines or forbidding state employees from using them, etc. Without the adverse consequences, “Why not?” becomes the thinking.
The $200 a month is easier than having employees who constantly travel finding testing sites, reporting results from all manner of places, or (more likely) constantly complaining about not being able to test weekly because of the constant travel.
Starfish
A lot of people who do not have children who are not vaccinated do not know how brutal the decision to send the children into the Petri dish was. I can’t imagine the lives of younger parents at this time. A coworker’s wife had a child by c-section during the pandemic. Some hospitals were drop off only where only the patients could go in. Some hospitals were rushing people through, with c-section patients staying two days instead of four. Infants and toddlers are sick ALL THE TIME as they build up their immune systems, and all their parents are living with the “Is this COVID” question every day in a way that those of us who had littles in normal times did not.
I was in my 700th Zoom meeting of the day with someone, and she texted me to let me know that three days into school her child had been thrown into quarantine because someone tested positive in her son’s class.
Because some daycares did not get their CARES Act funding, daycares have shutdown, and people are scrambling for childcare spots that may or may not exist.
Nettoyeur
This is a cowardly chicken s*** backdoor mandate by Delta, whose HQ/hub is in Georgia, home of many Trump loving, vax and mask hating MAGAs (incl governor) and in the middle of the Southern COVID Surge. Could turn into real mandate after some lawyering.
Caphilldcne
I think we are past due for requiring vaccines on flights and trains. I think Canada is requiring vaccines for flights. As always they’re a step ahead of us.
sab
@Barbara: My employer has an older brother who is an anti-vax nutjob, so no mandates for is. I work seasonally, so I may decide not to go back. Even with remote working I still have to go into the office periodically.
WeimarGerman
Wondering if any actuaries participated in setting this $200 a month fee. On the face of it, it seems a low amount for what could be a expensive hospital stay. Add to that the volume of daily interactions that gate agents and other airline employees have, it seem more a let’s pick a tiny stick approach.
United Airlines went the other way and just accelerated their timeline for full vaccination of all employees.
The pilots union is crying foul, and arguing that the airlines cannot make these unilateral changes to the terms of their employment. Tough.
The Moar You Know
No, actually we don’t. Because if we let that wolf in the house under the good and worthwhile guise of “getting vaccine resisters vaccinated”, then that wolf is gonna go on a fucking rampage just like it did last time. It’s a short step from “raising premiums on vaccine-resisters” to “raising rates on people with cancer”. And diabetes. And who are overweight, or have chronic conditions, or have family histories of heart disease or cancer. I could go on. I remember the abuses before Obamacare outlawed most of them. And I don’t want to go back to that, even if we get more shots in arms that way.
Good piece, Mr. Anderson. You’ve actually changed my mind.
ETA: I’ll be honest: I want to punish these people. Not just change their behavior, but I want to punish them in the process. In every way possible, because we could have beat this thing and now that’s not an option, because of them. But we gotta look past that and not punish ourselves while trying to figure out how to beat the resisters into compliance.
Bodacious
Bummer, your reference that workplace wellness programs that “show no changes in expenditures, behaviors or intermediate or final health outcomes” makes it likely that these type benefits will eventually die out without the data to support them [‘Just Say No’??]. My previous gig offered lots of very nice options, one being- Free pedometer + Lunchtime walk = $$ It’s also true that hardly any of my coworkers could find the time or energy to collect on those offers. But honestly, I probably would have put in the miles without any carrot being offered.
FlyingToaster
The hardest thing right now, for me, is dealing with the combination of anti-vaxer, Covid-skeptics, and MAGAts dominating the public arena (with complicity by the MSM).
There is no silver bullet. The relevant term in “novel Coronavirus” is “novel”, meaning new and we don’t quite know what we’re doing. The only approach that seems to work is a complicated (well, for anyone who hasn’t done lab time at uni) set of overlapping actions. Masks. Distancing. Increased indoor airflow. CO2 detectors to notify when the air ain’t moving. Vaccination. Testing. Avoidance of specific activities, e.g. Choir‽. Checking your kid’s temp every morning and attesting online before sending them to school. Making sure they take their Zyrtec daily so the ragweed allergy doesn’t convince their social studies teacher that they have COVID.
And these knuckleheads keep posting “Show me the studies that say that masks work”, which is so fucking beside the point that I just want to toss them in the Charles.
glc
Very much against risk-rating which is a byproduct of our disfunctional employment-related health care system.
No problem with having an employer mandate – and you lose your job if you don’t vaccinate. But messing up the insurance system further than it already is, is not progress.
Health care is a right, even if you’re stupid, obnoxious, or unemployed.
Some day we may get there.
Barbara
@Bodacious: Bingo. The carrot isn’t enough to prompt lasting changes. That would require more dramatic incentives that either demand more from the employer or cross the line regarding discrimination on the basis of health condition.
Victor Matheson
First of all, $200/month seems like a big deal. $2,400 a year just to not take a shot? How could that not change behavior?
That being said, a mandate seems a lot easier here.
And btw, thanks for he explainer on how they can do this under the ACA given the prohibitions on charging some people more than others for health insurance.
randy khan
So, first, obviously mandatory vaccination would be better from a public health perspective, and *much* better for all of the customer-facing people at the company. But I bet $200 a month will move a significant number of people – it’s not like $5 for walking extra miles or something like that.
All that said, I think it is troubling and a dangerous step to take any step down the path of risk rating.
Delk
I can’t wait for the nut jobs that scream about HIPAA (with the bonus p!) to start arguing ERISA (probably with an extra S!).
r€nato
Delta’s move is satisfying to the “fuck you, anti-vaxxers” part of me.
But when my prefrontal cortex takes charge over my amygdala… it’s a terrible idea. Opens the door to all sorts of risk-sorting bad-behavior-in-bad-faith from health insurance peddlers as well as yet more complications for insurance buyers.
Yet another reason to have #universalhealthcare.
Edward Brennan
@glc:
Couldn’t have said it better.
I don’t want these stupid people putting off going to the hospital because they can’t afford it. I want them there early getting whatever we can provide.
People will die from these policies.
As someone who has avoided healthcare and accepted pain as the cost… I am lucky things haven’t turned south.
I recently talked to a high school friend whose brother worked as a waiter, got sick, high deductible… Hoped it’d get better before it got worse. Died in his sleep…
I am sure that there are people, not on this blog, who would deny me care for my past choices.
That isn’t what I want even for antivax people.
Healthcare for all, even the stupid.
sab
Ohio’s Corona Virus Long-term care reporting website is not accurate at all. My dad’s nursing home has at least 3 resident cases on his floor alone, but the state web-site reports zero.
way2blue
Did I read earlier this week that health insurance providers are shifting toward no longer waiving co-payments for unvaccinated, CoVID-infected patients? Perhaps that would push folks towards safer behavior in a universally consistent fashion.
Earl
It just means the dollars weren’t big enough to effectuate movement.
Weekly tests and your insurance doesn’t pay. Let them pay the $89 a pop Labcorp charges and we’ll see if that lights a fire under asses. $4628/year.
Eric
@Earl: That larger stick may get you some movement, but not only the one that you want. If you have a group who believes its an unjust policy, a fraction of them will end up faking a vaccine card and continue to risk their community.
The larger the stick, the more that will be vaccinated because the individual cost is too high. But also some will choose to leave the company (which is hard for some business sectors that are struggling now) and others will lie and cheat.
Earl
@Eric: Nobody should accept vaccine cards. Get the data from the state. eg the qr code in California.
Impossible to fake? Absolutely not. Harder than the cdc cards some 6th grader made for our government? Definitely.