Sep 2, 2021 - COVID

Should Iowa's unvaxxed pay a COVID-19 surcharge?

Illustration of the state of Iowa covered in bandages.

Illustration: Brendan Lynch/Axios

Iowa employers may soon roll out new vaccine sticks and carrots to employees, Drake University professor Denise Hill told Axios Wednesday.

Why it matters: A COVID surcharge for unvaccinated workers — or insurance incentives for those who are vaxxed — could boost Iowa vaccination rates and help save lives. And it'll either cost or spare you money.

State of play: Roughly a third of Iowa's adults are not yet fully vaccinated, and hospitalizations have been increasing in recent weeks.

By the numbers: The average COVID-19 hospitalization costs about $20K, according to estimates from the Peterson Center on Healthcare and Kaiser Family Foundation.

  • The preventable cost to the U.S. health system was $2.3 billion in June and July, the center concluded.

Last week, Delta Air Lines became the first big employer in the U.S. to impose a surcharge on unvaccinated employees enrolled in the company's health care plan. ($200 a month, starting Nov. 1.)

  • The Iowa Insurance Division is not yet aware of any employers seeking to take similar actions, spokesperson Chance McElhaney told Axios.

Between the lines: Federal laws generally prohibit premium discrimination based on health status but employers with self-insured plans like Delta's have more flexibility to pursue surcharges, Hill said.

  • Premium or cost-sharing incentives — like those offered to employees who get an annual physical — are more likely, Hill said.

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