Premiums on the Affordable Care Act’s (ACA's) insurance exchanges are expected to only rise by about 1.1% next year on average, but insurers do not fully know how the COVID-19 pandemic will affect them, a new report finds.
The report, released Monday by the Kaiser Family Foundation, is based on early rate filings in 10 states. The filings, which could still change before open enrollment starts Nov. 1, also provided a glimpse into how insurers are handling the change in healthcare use caused by the pandemic.
“The term 'uncertainty' came up a lot,” said Nisha Kurani, senior policy analyst on the foundation’s ACA program, during a Kaiser webinar held Monday on the impact of the pandemic on the healthcare industry.
Kaiser found that 118 out of the 273 rate filings it studied (43%) specified the impact of COVID-19 on their rates for 2021. Among those insurers that acknowledged the impact, rates they offered range from a 3.4% decrease to an 8.4% increase.
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The topsy-turvy rate filings underscore the issues that insurers face when forecasting healthcare costs for next year.
The onset of the pandemic in March caused sharp drops in healthcare use as hospitals were forced to cancel or postpone elective procedures to preserve capacity to fight outbreaks and patients were scared of heading to the doctor's office.
Patient volumes rebounded somewhat in May and June, but there are lingering questions among insurers about whether a wave of deferred care could crash in 2021. Another issue is whether there could be an increase in morbidity as a result of deferred care as well as changes in health insurance status due to job loads.
For example, insurer Fidelis is expecting an 8.4% increase in its 2021 New York exchange plan rates due to the pandemic.
But the plan Maine Community Health Options projects a 1.2% decline in its rates due to the pandemic, partially because of a projected 1.5% reduction in total claims in 2021.
Insurers also expect healthcare use to be lower in 2021 as “people continue to observe social distancing measures and avoid routine care, especially in the absence of a vaccine or in the event of future waves of the virus,” Kaiser’s report said.
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The report also found that 53 exchange insurers just simply didn’t put any impact from COVID-19 on their premiums because they didn’t have enough information to confidently say one way or the other.
A small fraction (11%) of the filings did not mention COVID-19 at all.
Some insurers are also starting to game out the costs of providing a vaccine to their members.
The health plan MVP Health Care in Vermont added a 1% increase to its premiums in 2021 to cover a dose of the COVID-19 vaccine, which they expect would be priced at $75 and 80% of its enrollees would get one.
Several vaccine candidates are in large-scale clinical trials right now, and experts say a vaccine could be approved by late this year or early next.
Overall, the analysis underscores just how uncertain insurers as a whole feel about the state of healthcare.
“There is a lot up in the air heading into 2021,” said Kurani.