Climate change is becoming an increasingly urgent challenge for the health insurance industry.
"The top trends that I am following are climate change and geriatric care," Pleasant Radford, Health Equity Officer at UCare, previously told Becker's. "Climate change has an adverse impact on the health and well-being of communities — it is important for us in the healthcare industry to combat the climate crisis and protect public health."
At the National Association of Insurance Commissioners Fall 2024 meeting in November, industry regulators urged insurers to assess and mitigate the financial implications of climate change, recommending the use of climate scenario analysis to evaluate risks across their portfolios and emphasizing the need for a proactive framework to address these emerging challenges.
The health insurance sector could face rising coverage costs as extreme temperatures and weather events lead to increased healthcare utilization. While property insurers in places like Florida are already grappling with the effects of climate change, health insurers are now working to predict how these risks might affect premiums and profits. According to The Wall Street Journal, new risk models are being developed, but a lack of historical data makes forecasting difficult. Experts suggest that more flexible "parametric" coverage models and the integration of data from wearables could help insurers address these challenges. Expanding wellness programs to reduce climate-related health risks is another potential strategy.
Some insurers are already taking action to adapt. In August, CVS Health launched an environmental initiative aimed at supporting patients vulnerable to extreme weather events. The program uses environmental data analytics and patient medical records to provide real-time forecasts on air quality, wildfires, and other environmental risks. Initially focused on extreme heat, the initiative offers interventions such as directing patients to Oak Street Health clinics as cooling centers, providing health services at MinuteClinic locations, and managing medications at CVS pharmacies. Aetna members were the first to access these resources, with plans to expand the program further.
In a 2023 whitepaper, Blue Shield of California highlighted the need for virtual care models to build resilience and reduce the healthcare sector's carbon footprint, which accounts for 8.5% of the nation's total emissions. The paper cited California's 2018 Camp Fire — the most destructive wildfire in the state's history — as an example of how disasters can disrupt healthcare access. In Paradise, Calif., the fire displaced 83% of the population, destroyed 90% of homes, and left healthcare facilities unusable.
Blue Shield's hybrid virtual care model allowed for continuity of care during the crisis and reduced environmental impacts. According to the whitepaper, the model cut carbon emissions by 25%, water consumption by 35%, particulate matter emissions by 19%, and smog formation by 32%. Blue Shield has since launched a virtual-first health plan, offering $0 out-of-pocket costs for virtual primary care, specialty care, urgent care, and mental healthcare.