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COVID-19 clouds early health insurance premium requests

Some health insurers are attributing portions of proposed rate hikes to the pandemic

A healthcare worker conducts a COVID-19 test at a drive-thru testing facility at George Washington University on May 5, 2020.
A healthcare worker conducts a COVID-19 test at a drive-thru testing facility at George Washington University on May 5, 2020. (Caroline Brehman/CQ Roll Call)

Health insurance premium requests are beginning to trickle in from states with early filing deadlines, but the potential impacts from the coronavirus pandemic are still largely speculative.

Some health insurers in early deadline states like Vermont, Oregon and the District of Columbia are attributing portions of their proposed rate hikes for individual and small group plans to the pandemic, according to health department submissions, while most are opting to wait. But all of the companies caution that data on the pandemic’s effects have yet to materialize, indicating that final premiums could be higher.

“The short answer is that nobody knows,” said Margaret Murray, CEO of the Association for Community Affiliated Plans, adding that “countervailing winds” of things like a decline in routine care and the increase in COVID-19 treatment are clouding the crystal ball. 

Proposed rate requests for 2021 will begin to pour in over the next couple weeks, with final rates approved in September. Early signs indicate that more plans will be offered on the exchanges created by the 2010 health care law than last year, in spite of the pandemic.

Other unknown factors include the costs of tests and a vaccine, and how the dramatic spike in unemployment will shuffle people out of the small employer market and into the individual market and Medicaid. It’s also unclear how quickly routine medical visits will resume, and what the long-term effects of the national shutdown will be — particularly for patients with chronic disease. 

Nearly half of people with chronic kidney disease who aren’t already on dialysis are unaware they have the condition, according to the Centers for Disease Control and Prevention. More than 21 percent of diabetes patients, meanwhile, are also undiagnosed.

The statistics are why many public health experts fear the shutdown will have long-term effects for at-risk individuals who missed routine check-ups and screenings, including for other diseases like cancer. Signs already point to an increase in mental health and substance abuse deaths.

David Hoffman, a bioethicist who chairs the policy committee of the National Association of Chronic Disease Directors, said the effects likely won’t begin to surface for another year as the medical community catches up on months of missed appointments. 

“All of those things will take time,” he said. “We don’t have the capacity to screen everyone at once when things reopen.”

Hoffman said he will be watching for evidence of increased heart disease, diabetes and other conditions through an annual CDC phone survey, known as the Behavioral Risk Factor Surveillance System. A projected spike in chronic disease diagnoses would likely trigger a correlating jump in health care spending, since conditions become more severe and expensive the longer a patient foregoes care.

Rate requests across the country

Some insurers are attempting to factor those kinds of projections into their rates, along with the assumptions about the timing and costs of future coronavirus treatments that don’t yet exist. 

In Vermont, MVP Health Care attributed 1.6 percent of its requested 7.3 percent average increase for its individual and small group plans to COVID-19. The company estimates that the cost of administering a vaccine at no charge to patients would increase monthly premiums by $5 per month, while pent-up demand for elective services would add another $1.50.

But most are signaling they will wait until more data emerge before making predictions. Blue Cross Blue Shield of Vermont requested an average 6.3 percent hike, but cautioned that may change. Industry groups have also begun pushing Congress to include money and other concessions for insurers in the next economic aid package.

“The various impacts of the COVID-19 pandemic will impact 2021 costs, and they will do so in both an upward and a downward direction,” the company wrote. “Based on information currently available, it is difficult to so much as predict an overall directional impact, particularly because future government actions will drive the timing and magnitude of many of the above considerations.” 

In Oregon, proposed rates for individual market plans ranged from an average decrease of 3.5 percent to an increase of 11.1 percent. Two of the six insurers filing rates — Moda Health Plan and Providence Health Plan — are projecting a 1 percent increase due to COVID-19, while the rest deferred estimates.

In Washington, D.C., proposed rate changes for the individual market ranged widely. CareFirst requested a 14.7 percent increase for its HMO plans, but a 0.6 percent decrease for its PPO plans. Kaiser Permanente proposed a 2 percent average decrease for its plans. Neither company factored coronavirus projections into their proposals.

The likely outcome is that general uncertainty will be priced into final rates, Murray said, as questions about costs remain unanswered. Insurers must fully cover a vaccine, but no one knows when it will arrive or how much it will cost. Health plans are also required to cover both diagnostic and antibody testing, but it’s not clear if that includes regular, repeated testing for some workplaces necessary to safely resume operations. 

That uncertainty is compounded with other lingering questions, such as the final outcome in a Texas lawsuit challenging the 2010 health care law that the Supreme Court will hear during the next term, or ACAP’s lawsuit challenging the Trump administration’s expansion of short-term health plans.

The most important piece of information that will surface in the near term is the outlook for a vaccine, said David Anderson, a research associate at the Duke University Margolis Center for Health Policy, adding that “very little can be fed into the model for this round.” 

It’s far from surprising that insurers are unable to project prices for 2021 so soon into a pandemic that’s unprecedented in recent memory, he said.

“That I think is the only honest answer they can give,” he said.

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