Insight
Parametric insurance: A captivating solution
Parametric policies, which pay based on the magnitude of an event, can bridge coverage gaps that are difficult to insure with a traditional indemnity policy.
Since Jan. 15, 2022, employer health plans and individual health insurance issuers have been required to cover at-home COVID-19 tests purchased over the counter for the duration of the coronavirus public-health emergency. The resulting costs to health plans for covering these tests could represent a significant unanticipated expenditure in 2022 and beyond. In this paper, we provide two estimates of the potential costs of a fully compliant direct coverage pathway in 2022 to address the variability in costs associated with factors such as:
Insight
Parametric policies, which pay based on the magnitude of an event, can bridge coverage gaps that are difficult to insure with a traditional indemnity policy.