State could see $16 million in coronavirus costs through September, panel told

Health insurance claims for 47,000 state employees stemming from COVID-19 illness could cost the state more than $16 million through September depending on how extensively stay-at-home guidance and other social distancing directives remain in place, a state oversight board heard Thursday.

Potential cost-cutting over the same four months for non-COVID related claims could reduce the overall increase to $8.6 million. That assumes a worse-case scenario where further business reopenings in June and July result in a new spike in COVID-19 cases by August, an actuary told the Public Employment Benefit Program board Thursday.

Under a more neutral scenario, and if the state had maintained its Phase One level stay-at-home guidance through Sept. 30, COVID-19 health costs would increase by about $4.9 million and the state could have seen claims costs decline by $2.8 million overall.

The projections come with numerous caveats and assumptions, such as the possible reinstatement of stay-at-home guidance in response to a second spike in cases, Stephanie Messier, an Aon Hewitt vice president, told the board.

“I’m not predicting what the governor may do, but the model simply tried to take into account what may logically happen should we see a spike in cases,” Messier said.

Messier presented a model that factored in infection rates, epidemiologic models, social distancing impacts, and other actuarial analysis. Under the model, if Phase One restrictions had remained in effect into the fall, some 1,500 of 47,000 covered workers could be expected to become infected, 100 hospitalized, and 10 to die, with more than 14,000 work days lost.

The more severe scenario assumes a July 1 Phase Three reopening push that results in a second infection peak on Aug. 3 and a renewed lockdown. Under that scenario, more than 5,000 workers could become infected, 335 require hospitalization and 33 die, with a loss of more than 49,000 workdays.

In either case, the highest potential cost stems from hospitalizations, which are estimated to run from $30,000 to $80,000 per case and could, in the worse scenario, add up to $11.8 million.

“The really big piece of all this of course is how we all act when we’re out in public and how many of us are out there hopefully not infecting each other,” Messier said.

Agency staff also told the board that $1 million in COVID-related claims has been generated thus far, with roughly 20 percent paid and the rest pending.