In a glimpse of what we may expect in terms of premiums, a new study by the Kaiser Family Foundation has found that most insurers are not factoring in added costs or savings related to COVID-19 for their 2022 health coverage rates for personal health plans in 13 states and the District of Columbia.
The insurers expect health care utilization to return to pre-pandemic levels by 2022, according to the analysis by KFF.
While the analysis focused on the individual market, KFF found that insurers were making similar assumptions about how COVID-19 would affect their group market costs and pricing.
Despite them not expecting significant effects from COVID-19, there are other issues that are on health insurers' radars that are likely to increase rates, including the costs of treatment that was delayed in 2020, the continued use of telehealth services and new federal regulations in response to the pandemic. A recent survey by PricewaterhouseCoopers found that employers are expecting an average rate increase of 6.5% for group health coverage.
It's clear that most insurers are viewing the COVID-19 pandemic as a one-time event, with limited, if any, impact on their 2022 claims costs. KFF referred to the pandemic's effect on rates as "negligible."
The foundation looked at rate filings of 75 insurers and only 13 of them stated that the pandemic would increase their costs in 2022, but even then, most of them predicted an effect of 1%. The reasons those 13 insurers cited for the expected higher costs include:
Delayed treatment, policy changes
While most insurers don't expect to be paying out excessive amounts for treatments and medications related to COVID-19 infections, they are concerned about the increased flow of patients seeking treatment for procedures they postponed last year.
Those postponements have led to pent-up demand, driving higher utilization in 2021, which some health plans expect will spill over into 2022.
As a result, some insurance companies have filed rates that include a "COVID-19 rebound adjustment" to account for the services that were deferred in 2020.
Other carriers have filed for rate increases based on predictions that those delayed services will lead to an exacerbation of chronic conditions. Some are also predicting that COVID-19 "long-haulers" could push claims costs higher.
On top of all that, insurers this year have had to make decisions about benefits, network design and premium pricing in the face of the pandemic and federal policy changes that could dramatically expand coverage under the Affordable Care Act.
Some insurers are concerned about the costs associated with the explosive growth of telehealth services during the pandemic. These tele-visits boomed as people were avoiding doctors' offices due to stay-at-home and social distancing orders and to reduce the chances of COVID-19 transmission.
Kaiser Permanente in one of its filings wrote: "We anticipate the high utilization of telehealth services to persist beyond the lifespan of the outbreak into the foreseeable future."
Another insurer, MVP in Vermont, said that while it has seen costs associated with in-person ambulatory services increase this year and a return to in-person visits, it has not seen a reduction in use of telehealth services.
Finally, Blue Cross Blue Shield of Vermont in its filing predicted that the increased expenditures for mental health services (demand for which spiked in 2020 as people wrestled with isolation and depression aggravated by the pandemic) would continue in 2022 and beyond.
The insurer predicted that claims for mental health and substance abuse treatment would climb 20% from 2020 to 2022.
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