Health Insurance and the Pandemic

By: Nigel Romano Partner, Moore Trinidad & Tobago Chartered Accountants  |   October 28th, 2020

General insurance, e.g., home and car, take care of your possessions.  Life insurance takes care of your family.  In the new normal, given COVID-19 and the prospect of other pandemics, I believe that the industry needs to focus on the individual—what’s in it for them?

Who takes care of the individual when they get sick?  Who pays for the treatment should they be diagnosed with cancer?  Who helps them to recover or compensates them for reduced earning capacity as a result of the effects of COVID-19?

As we live longer due to advances in medicine, despite good lifestyle choices, the possibility of succumbing to a major illness exists.  This is where medical, disability and long-term care insurance kicks in.  I believe that, now more than ever, the insurance industry needs to focus on health insurance.

Medical/Health Insurance

Health or medical insurance provides coverage for expenses incurred as a result of sickness, injury, routine medical bills, disability, or accidental death and dismemberment.  Health insurance can be an expensive proposition and designing the right plan for an individual and their family could be quite complicated.  However, this is most probably the most critical kind of insurance you can offer since not having the right medical insurance could lead to financial distress as a result of illness or an accident.

The point to note here is that quality medical care is not free. One trip to the emergency room could put an individual and their family in debt for a long time. Also, without health insurance, people are less likely to see their doctor for that all important annual check-up.  As a result, diagnosis of a serious medical condition like a tumour, blockage of arteries, or cancer may be delayed, making the treatment more expensive and less effective.

As Suze Orman notes in her book, “The Road to Wealth”, “not having health insurance means that people could be deprived of the care they need and deserve—and still find themselves hundreds of thousands of dollars in debt.”  Insurance companies should be focused on developing affordable group health insurance plans, the best way to serve individuals.  Next, they should focus on affordable private health insurance plans.

Group Health Insurance

Group health insurance plans provide coverage to a group, usually comprised of company employees or members of an organisation. Group health members usually receive insurance at a reduced cost because the insurer’s risk is spread across the group.  Simply put, this type of insurance is cheaper and more affordable than individual plans available on the market because there are more people who buy into the plan.  I believe that insurance providers should focus on expanding group health coverage to as many small and medium enterprises as possible.  This expansion of coverage will spread the risks across a higher number of people, thereby reducing cost even further.

Private Health Insurance

Insurance companies should also look at more creative ways to offer private individual health insurance plans to individuals who don’t have health coverage through their job or do not want to rely on the care offered by public institutions.  Private health insurance should be designed for those who are self-employed, part-time employees, or retirees.

Technology and Health Insurance

In both group and individual offerings, insurance companies should be exploring the widespread use of technology, particularly the proliferation of health and fitness apps, to incentivise companies, organisations and individuals to share their data in exchange for discounts for good metrics.  For example, completing 10,000 steps every day or burning a certain number of active calories should translate into lower premiums. We live in interesting times—many risks and many opportunities. Let’s find ways to create value for our customers while capturing value for our team members and shareholders—win/win.