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1 Reason Vaccine Mandates Might Work Better Than You Think

By Keith Speights and Brian Orelli, PhD – Oct 2, 2021 at 2:01PM

Key Points

  • Insurers are phasing out waivers of out-of-pocket costs for COVID-19 treatment.
  • Vaccine mandates combined with the prospects of higher costs could boost vaccination rates.
  • The financial incentive might not help much because many people don't understand their health insurance benefits.

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In theory, at least, higher out-of-pocket costs associated with COVID-19 treatments could cause vaccine mandates to be more effective.

COVID-19 vaccine mandates are controversial, but they could be effective in driving vaccination rates higher. There's also another trend underway that could cause the mandates to be at least incrementally more effective. In this Motley Fool Live video recorded on Sept. 22, Motley Fool contributors Keith Speights and Brian Orelli discuss the potential impact of health insurers no longer waiving out-of-pocket costs for COVID-19 treatment.

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Keith Speights: Brian, earlier in the pandemic, I'm going to switch gears here a little bit. But earlier in the pandemic, many insurers weren't requiring their members to pay anything out of pocket if they were hospitalized due to COVID-19 or had to get COVID-19 treatments.

However, the Kaiser Family Foundation has some data that shows that this is as of the end of August, I believe, that 72 percent of US healthcare plans are no longer waving those out-of-pocket costs for COVID-19 treatment and that percentage is likely to rise in the coming months.

Do you think this makes a big difference for health insurers such as UnitedHealth Group (UNH -1.59%) or Anthem (ELV -0.79%) and I guess more importantly, what impact do you think this trend could have on COVID-19 vaccine mandates?

Brian Orelli: It's definitely an incremental benefit to the insurers who won't have to pay the added costs associated with COVID-19, especially the whatever co-pays or whatever the insured patient would have to pay, now that patient will have to pay it instead of the insurer.

In theory, I think it could benefit the vaccine companies if people are taking into account the potential outlay of getting COVID-19 versus getting the vaccine and having a reduced risk. From a financial perspective, getting the vaccine would make the most sense because if you don't have the risk of having to pay whatever you're going to have to pay if you get COVID-19.

But I don't know how many people actually understand their insurance situation and then how many people who weren't going to get vaccinated at this point are going to take into account the possibility of the financial ramifications. I'd like to think a financial incentive might promote vaccinations more than mandates, but I'm not sure if that's really the case here.

Speights: Yeah. I agree with you. I'm not that confident that this trend for insurers to no longer wave out-of-pocket costs -- I just don't think that's going to make a big difference on vaccination rates, but the mandates could. Definitely something we'll be watching.

Orelli: From a financial standpoint, I think it makes a lot of sense but I just don't think that people really think that way. If you don't think that way, then does it really matter? A mandate, you know that you have to do it or else you have to get tested weekly at your job, or else you can't go to your favorite restaurants or whatever. I feel like mandates are more in your face versus this, which is a financial issue once you get COVID, but maybe you're not really thinking about it.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy.

Stocks Mentioned

UnitedHealth Group Stock Quote
UnitedHealth Group
UNH
$539.20 (-1.59%) $-8.72
Elevance Health Inc. Stock Quote
Elevance Health Inc.
ELV
$524.92 (-0.79%) $-4.20

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