COVID Waves in 2020 Caused Bigger U.S Death Rate Spike Than 1918 Flu: Actuaries

The 2020 waves of the COVID-19 pandemic caused the biggest increase in the overall age-adjusted U.S. death rate that the country has ever recorded, and their impact was bigger than that of the catastrophic 1918 influenza pandemic, according to a new analysis posted by the Society of Actuaries. Jerome Holman and Cynthia MacDonald, the authors, based the analysis on data from the National Center for Health Statistics, which is an arm of the U.S. Centers for Disease Control and Prevention. The analysis includes only pandemic mortality impact figures for 2020, not for the devastating COVID-19 waves that hit in 2021. The U.S. death rate records the actuaries considered go back to 1900. Holman and MacDonald found that the age-adjusted U.S. mortality rate from all causes increased 16.8% between 2019 and 2020, after falling 1.2% between 2018 and 2019. The 1918 flu pandemic, which killed about 500,000 of the 100 million people who lived in the United States at that time, and shaped life insurers' ideas about what an "extreme mortality event" looks like, caused an increase of just 11.7%. COVID-19 increased the U.S. death rate both by killing people directly and by increasing the death rate from all other causes of death. COVID-19 itself led to an 11.9 percentage points of the  increase in the 2020 U.S. death rate, and changes in the death rates for all other causes pushed up the overall death rate by another 4.9 percentage points. For a look at how overall age-adjusted death rates for causes other than COVID-19 changed between 2019 and 2020, see the gallery above.

Possible Reasons

The apparent increase in the number of deaths attributed to conditions other than COVID-19 might have been partly due to choices doctors made about listing causes of death. In some cases, for example, deaths blamed on accidents or diabetes could have been caused by COVID-19. But the pandemic might have also increased death rates from other causes by interfering with people's ability to get ordinary health care. Health insurers have repeatedly reported that decreases in spending on ordinary health care have offset spending on care for COVID-19. In some cases, the psychological and economic effects caused by pandemic control efforts, such as moves to shut down retail businesses and encourage people to stay home, might have further increased the indirect effects of COVID-19 on mortality.

The Pandemic and Age

Holman and MacDonald produced tables showing how the pandemic has affected the death rates for people in different age groups. Death rates fell in 2020 for male and female babies, and for girls ages 1 through 4. For women and girls ages 5 through 44, and for men and boys ages 1 through 44, indirect pandemic effects caused a much bigger increase in death rates than COVID-19 itself caused. For people ages 45 through 54, the direct effects of COVID-19 led to a slightly bigger increase in mortality than the indirect effects. For people ages 55 and older, COVID-19 itself had a much bigger effect on mortality than the indirect effects. Because the indirect effects of the pandemic were so deadly for women ages 25 through 44 and for men and boys ages 15 through 34, their overall rates of death increased more than 20% between 2019 and 2020.

The Pandemic and Socioeconomic Status

People with life insurance and individual annuities tend to have higher income, financial wealth and health levels than members of the general population. Holman and MacDonald tried to tease out the effects of income and other economic factors on 2020 mortality rates by looking at the CDC's county-level 2020 mortality data. The actuaries divided the counties into quintiles, or fifths, using data on median family income levels, unemployment rates, median home values and other factors that reflect residents' socioeconomic status. COVID-19, and the indirect effects of the pandemic, hit people in counties in all quintiles hard, but they hit people in the less wealthy counties hardest. In the counties in the wealthiest quintile, for example, the overall death rate per 100,000 residents increased to 736.1 in 2020, from 638.4 in 2019. COVID-19 led to 79.1 additional deaths per 100,000 lives, and other causes led to 18.5 additional deaths per 100,000 lives. For counties in the poorest quintile, the overall death rate per 100,000 people increased to 1,097.2, from 922.7, with COVID-19 accounting for 117.5 additional deaths per 100,000 lives and other causes leading to 57 additional deaths per 100,000 lives. The figures mean that people in the poorest counties were about 33% more likely to die from COVID-19 than people in the wealthiest counties, and about three times more likely to die from the effects of the pandemic on all other causes of death.

The Figures and Insurers

Increases in mortality rates can increase claims against life insurers' life insurance policies. Higher mortality may decrease insurers' obligations for individual annuities, but individual annuity death benefit provisions appear to be limiting the level of performance improvement individual annuity blocks are getting from the pandemic. Higher mortality can lead to significant performance gains for blocks of long-term care insurance and pension plan-related group annuity business, because the deaths of LTCI insureds and pension plan participants typically lead to reductions in the benefits obligations associated with the main coverage without leading to big death benefit payments. .. Pictured: Workers set up a COVID-19 treatment field hospital in New York, in March 2020. (Photo: Angus Mordant/Bloomberg)