Climate change, it turns out, has a few side effects. High temperatures make it harder for the body to cool itself, which can cause heat cramps, exhaustion, and stroke—a particular concern for people with heart conditions. Heat also affects air quality, as stagnant air leads to higher smog concentrations, which in turn places stress on those with respiratory conditions like asthma. Higher levels of carbon dioxide will likely cause pollens to proliferate, while increased humidity will nurture fungal growth—two major aggravators of asthma and allergies. Hotter weather will also lead to the spread of disease. Mosquitoes carrying diseases like malaria, West Nile virus, and dengue fever will migrate into new areas of the U.S. So will ticks bearing Lyme disease. Water- and food-borne pathogens also thrive in balmier climes.
In some places, winters will be warmer—but that creates problems, too. Increased precipitation is expected to trigger heavier snowfalls and more ice storms, leading to more accidents and falls, says Paul Epstein of the Center for Health and the Global Environment at Harvard Medical School. A 2009 report from the US Global Change Research Program  found that any decrease in hypothermia-related deaths thanks to warmer winters “will be substantially less than the increase in deaths due to summertime heat extremes.”
The U.S. health care community is so far behind on the issue of global warming that it’s only starting to calculate the cost of these changes. But what little research exists suggests the bill could be big. Lyme disease already costs more than $2.5 billion a year in medical expenses and lost work time—and climate models predict that the area where Lyme-carrying ticks can survive will more than double over the next 70 years. Any increase in asthma would likewise boost the condition’s massive price tag—currently $18 billion annually. A study published in the Proceedings of the National Academy of Sciences found that kidney stones could increase by 30 percent or more in some areas of the U.S., due to dehydration. That would cost the U.S. health care system more than $1 billion per year.
These are just a few of the anticipated health effects—accumulated, they could pose a major liability for insurers. It’s a “time bomb,” says Michael Gresty, managing principal of the sustainability consultancy Altanova, which works with corporate clients to reduce risks in this area. “When the industry is not prepared for a sudden shock like this, they either have to dig into their reserves, or they have to increase their premiums to cover the increased costs of providing care.”
On the bright side, one under appreciated benefit of tackling climate change is that it could yield major health care savings. The European Environment Agency has found that the European Union’s plans to reduce carbon emissions 20 percent by 2020 would cut health costs by $44 billion dollars annually. No equivalent analysis has been done for the U.S. But a study by the Clean Air Task Force found that shuttering dirty coal plants could save more than twice as many lives as seat belts do each year. Programs to reduce emissions, like providing better public transportation, could also result in indirect health care savings by way of lower obesity rates and fewer respiratory and heart problems. And a January study from the University of Wisconsin found that the benefits of improved air quality that would come from weaning the country off fossil fuels would likely outweigh the short-term costs.
Some insurance firms are beginning to acknowledge that climate change may affect their businesses. In a 2008 submission to the Carbon Disclosure Project—a voluntary program that helps major businesses assess climate change-related risks—Prudential said it had teams examining the implications of increased infectious disease and extreme weather events. The company is also “paying attention more” to markets like Mexico, India, and China, where diseases like malaria may spread, says Mary O’Malley, chair of Prudential’s environmental task force. But, she says, Prudential is only starting to evaluate the risks and hasn’t made substantial changes to its business model. Likewise, Aetna concluded in a submission to the disclosure project that global warming may lead to “higher health care costs for everyone.” But it, too, is in the early stages of assessing the problem.
Smart insurers, says Gresty, should work to calculate climate-related risks and push for policy changes to reduce those risks. “That would be an investment in the future that would be protective of their business,” he says. And given the industry’s massive lobbying tab, policymakers might well listen. Says Harvard’s Epstein, “Through their own policies as well as national policies, the insurers can have a huge voice.”