Refusing to Get Vaccinated Can Cost You (and Your Family) Thousands of Dollars

Over the summer of 2021, Philadelphia ran the Philly Vax Sweepstakes—a lottery designed to incentivize Philly residents to get the COVID-19 vaccine. The lottery targeted Philadelphia’s most unvaccinated populations, giving people who lived in zip codes with low vaccination rates greater odds of winning up to $50,000. As of July 2021, at least 14 other states, including Ohio, Colorado, Kentucky, and Louisiana, ran vaccine lotteries, giving people huge incentives to get vaccinated.

But after the lotteries were over and the data analyzed, scientists and policymakers discovered that these incentives didn’t really move the needle (so to speak). While the first drawing did lead to an uptick in vaccinations in Philly, the overall effect was insignificant.

Experts In This Article
  • Kevin Volpp, MD, PhD, Kevin Volpp, MD, PhD, is a director of the Penn Center for Health Incentives and Behavioral Economics (CHIBE), which partnered on the Philly Vax Sweepstakes.
  • Kosali Simon, PhD, Kosali Simon, PhD, is a health economics and policy professor at Indiana University.

Using the “carrot” didn’t work, so many organizations are trying the stick. Individual employers and organizations are holding unvaccinated people responsible for increased insurance costs, employee testing charges, or other fees.

By law, health insurance companies cannot add charges to your premium because you’re unvaccinated, says Kosali Simon, PhD, a health economics and policy professor at Indiana University. However, employers can do things like offer health insurance discounts to vaccinated people, and life insurance companies are legally allowed to charge the unvaccinated more. Employers and organizations are also finding other ways to add costs for being unvaccinated, and this can equate to hundreds or thousands of dollars.

“It’s pretty common now that there’s one set of protocols for vaccinated people and then another for unvaccinated people in terms of frequency of testing and the like,” says Kevin Volpp, MD, PhD, director of the Penn Center for Health Incentives and Behavioral Economics (CHIBE), which partnered on the Philly Vax Sweepstakes. “One option [for employers] is to say, ‘Okay, if you choose not to get vaccinated, you’re going to have to cover those incremental costs.’ Another is to say, ‘Well, from an actuarial standpoint, you’re going to cost more in terms of your healthcare, and we’re going to pass that cost on to you.’”

Some companies have already started doing this. Over the summer, Delta Air Lines began charging unvaccinated workers an additional $200 per month for health insurance. In Wisconsin and Illinois, a healthcare organization called Mercyhealth, which has more than 7,000 employees, introduced a “risk pool fee” which deducts anywhere from $60 to $265 per month from employee paychecks if they’re unvaccinated.

Other companies are taking benefits away from unvaccinated employees. New York’s Metropolitan Transportation Authority no longer pays a $500,000 death benefit to families of MTA workers who die of COVID-19 if they were unvaccinated at the time of their death. And still, others are charging employees for the costs of testing. In Las Vegas, MGM Resorts International informed employees that they’d be required to pay $38 for every on-site test (half of the cost for the company) if they’re unvaccinated. Unvaccinated employees are required to prove a negative COVID-19 test every two weeks.

Other costs that were once free, such as COVID-19 testing and treatment costs, have also increased. Many insurers, for example, are no longer covering the costs of COVID-19 treatment. And although they didn’t seem to powerfully motivate vaccination, many incentives still exist for the vaccinated, from free donuts to $1,000 given to Indiana teachers who got vaccinated, Dr. Simon says.

Currently, Dr. Volpp says he only sees financial penalties from individual organizations or employers, not at the state or federal level. However, he’s not convinced that financial penalties will work much better than monetary incentives did.

When vaccine lotteries failed, many in Dr. Volpp’s circle concluded that it was because people who hadn’t yet gotten vaccinated had entrenched views against doing so. Now, people have had even more time to get vaccinated, so most people who aren’t vaccinated likely have strong beliefs. “In many settings, there’s now an employer requirement to get vaccinated, or otherwise you’ll lose your job, and people still aren’t doing it,” he says. If you refuse to get vaccinated over the threat of losing your job, you probably aren’t going to do it because it costs money.

Does that mean encouraging people to get vaccinated is a lost cause? Not at all, Dr. Volpp says. He suspects what will work best isn’t financial penalties but restrictions on activities, like eating out and going to movies.

“People desperately want things to be normal,” he says. “They want to be able to go out to dinner, and they want to be able to go to sporting events.” He suspects that being unable to do those things would be a more significant penalty than paying a higher insurance premium.

Certain cities already have these restrictions. In New York City, you need to show proof of vaccination to get in almost anywhere, from restaurants to Broadway shows. Recently, Philadelphia announced that proof of COVID-19 vaccination would be required to eat at a restaurant—the mandate is meant to avoid another shutdown of indoor dining. New Orleans and San Francisco also require proof of vaccination to enter many businesses in the cities.

As the pandemic and the COVID-19 virus continue to evolve, so do the strategies to encourage mass vaccination. “It’s going to be an ongoing dilemma to figure out how to navigate this,” Dr. Volpp says. “It’s important for us to evaluate these efforts as they evolve, so we have a better sense of what works, but what works is going to be very context-specific and difficult to generalize.”


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