COVID-19 ‘Mucked Up’ Insurance Marketplace, Analyst Says

By Susan Rupe

“COVID-19 has mucked up the insurance marketplace as a whole – including private employer-provided plans,” said Michael Giusti, InsuranceQuotes.com analyst.

Giusti outlined a number of key takeaway for health insurance in 2021 in a recent report for Insurancequotes.com.

First, he said, the pandemic made setting premiums especially challenging. Premiums are set based on the previous year’s claims data. Because 2020 was marked by a combination of huge intensive care costs, but almost no preventative care costs, that model was flipped on its head. As a result, median health premium edged up just a percent or two in 2021.

But many in the insurance industry are holding their collective breath as things get back to normal, he noted. A major worry is that deferred care will come crashing through the system by this summer, representing a flood of claims once people are willing to see a doctor again.

The other question is what will be the long-term effect of having so many people defer care, Giusti said. Will a year of deferred cancer screenings, diabetes screenings, hip replacements, and so on, lead to worse long-term health, and ultimately higher health costs? And how long into the future will those increased costs haunt the industry?

Affordable Care Act

A new open enrollment period for health insurance began Feb. 15 and will extend to May 15 for any uninsured Americans who need an opportunity to sign up for 2021 coverage.

Although enrollment in programs such as Medicaid or the Children’s Health Insurance Program can take place throughout the year, consumers who want to purchase a policy through the ACA marketplace must typically wait until they have a change-in-life event, or for the annual open enrollment period at the end of the calendar year.

But this year, President Joe Biden signed an executive order expanding that window through a Special Enrollment Period that will end May 15. Anyone who is otherwise uninsured can sign up, regardless of whether they have had a qualifying life event. This is big news for uninsured people who don’t have access to health insurance through their employer or for people who lost their employer-sponsored health coverage due to a layoff.

People appear to be responding to the special enrollment period. According to the Centers for Medicare and Medicaid Services, 206,000 people signed up for ACA coverage during the two-week period between Feb. 15 and Feb. 28.

The American Rescue Plan included an increase in the subsidies that are designed to make ACA policies more affordable for lower-income policyholders. Under the new law, people who have collected unemployment payments in the previous year will likely qualify for a $0 monthly premium plan.

The bill also offers incentives for states to expand Medicaid. It increases subsidies for COBRA health coverage, which consumers can purchase if they were laid off and lost their employer-based coverage.

The Impact Of Texas Vs. California On Health Insurance

The ACA remains the law of the land, although the Supreme Court is expected to decide by June whether the law can remain in place without the individual mandate.

Meanwhile, the Biden administration told the Supreme Court in January that it should uphold the entire law and allow the ACA to stand, a shift from the position taken by the Trump administration. Every health insurance policy that has been written for 2021 would remain in force regardless of what the Supreme Court decides.

If the high court does strike down the ACA, however, those policies would not likely be renewed in 2022. Allowing the law to fall would also endanger federal premium subsidies that most low- to middle-income people who buy policies on the marketplaces rely on to pay for their health insurance.

Telemedicine Set To Continue

COVID-19 moved a number of things into the online space, and doctor’s appointments were one of them.

Telemedicine has shown to be especially useful for general health checkups, prescription check-ins, dermatology appointments, nutrition counseling, mental health counseling, and even some urgent care situations.

Although the Affordable Care Act was vague regarding telemedicine, most big carriers do offer some form of coverage for telehealth. As far as federally provided health plans, the CMS has recently loosened it regulations for telemedicine. Telehealth services may now be delivered to Medicare beneficiaries by phone as long as video capability is available.

Susan Rupe is managing editor for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected]. Follow her on Twitter @INNsusan.