Health Care Costs Could Increase for the Unvaccinated

To prevent the spread of COVID-19, many companies have offered incentives for employees to get vaccinated, including paid time off, gift cards and even cash bonuses. However, in light of the current surge in infections and hospitalizations, many are considering a different tactic.

According to, some companies are exploring the feasibility of adding health coverage surcharges for the unvaccinated as a way to ramp up immunizations and protect the workforce. Based on the monthly fees some companies already impose on employees who smoke, the surcharge could range from $20 to $50.

Apart from the public health reason for workers to get vaccinated, there is also a financial incentive. COVID-19 can cause serious illness and an extended hospitalization, generating huge costs to workers and employer-sponsored health plans.

For example, as reported by Kaiser Health News (KHN), COVID-19 patients have reported hospital bills ranging from $104,000 for a 14-day hospitalization in Miami to possibly several hundred thousand dollars for a two-week hospital stay in Hawaii.

Even though insurance companies negotiate lower prices and cover much of the cost of care, bills for an out-of-pocket deductible, copay and out-of-network care can be daunting. In 2020, before COVID-19 vaccines were available, most major private insurers waived patient payments for treatment of the virus. However, most have allowed that policy to lapse.

According to KHN, more than 97% of hospitalized patients last month were unvaccinated. Though the vaccines may not keep people from contracting COVID-19, they are highly effective at preventing severe illness and hospitalization. For this reason, health insurers are questioning why patients should be financially protected from what is now a preventable hospitalization, thanks to a vaccine that is made available free of charge.

Insurance companies may also have the option to penalize those who are unvaccinated. For example, some policies will not cover treatment necessitated by what is deemed risky behavior, such as scuba diving and rock climbing. The Affordable Care Act also allows insurers to charge smokers up to 50% more than what non-smokers pay for some health plans.

Finally, if an unvaccinated person catches COVID-19, they risk exposing others in their workplace, neighborhoods and families to the virus. The money spent on their combined health care could result in higher insurance premiums for all. Even more concerning, outbreaks in vaccination-resistant areas could help allow even more harmful variants of the virus to develop.

Perhaps, if the financial cost of getting vaccinated were too high, the unvaccinated would reconsider their decision to remain unprotected.


Pacific Federal is a Zenith American company and subsidiary of Harbour Benefit Holdings, Inc.