Best’s Commentary: U.S. Health Insurers Face Potential Rise in Claims Due to Coronavirus

OLDWICK, N.J.--(BUSINESS WIRE)-- AM Best anticipates that U.S. health insurers will experience an increase in medical claims with the spread of the coronavirus, and sees the potential for these costs to be driven by at-risk patients such as the elderly and those with pre-existing conditions.

A new Best’s Commentary titled, “Potential Rise in Claims Due to Coronavirus,” also states that treatment for non-urgent conditions could decline, as these individuals might choose to avoid becoming exposed at a medical treatment facility or physician’s office.

The higher severity cases, and in cases resulting deaths, thus far have been occurring in the elderly and in individuals with pre-existing medical conditions or compromised immune systems. “As such, exposure is expected to be greater for health insurers covering a large percentage of 'at risk' individuals—including those writing long-term care and support services contracts, Medicare and Medicaid, specifically special needs plans,” said Sally Rosen, senior director, AM Best Rating Services.

The Centers for Disease Control and Prevention (CDC) is allowing the coronavirus test to be administered locally. Tests conducted by private laboratories will be paid for by an individual’s health insurer. The New York state Department of Financial Services (DFS) is requiring health insurers to waive all cost-sharing for fully insured plans and Medicaid recipients for claims related to testing.

Additionally, several carriers have announced they will be waiving co-payments and cost-sharing for fully insured members for coronavirus testing. AM Best expects that insurers also will be liable for the coronavirus treatment of their members.

According to AM Best, several years of strong earnings has resulted in a strengthening of risk-adjusted capitalization, which should allow health insurers to absorb any potential impact. Furthermore, the coronavirus could impact medical stop-loss carriers for high dollar and high claims in aggregate.

The coronavirus is an evolving situation. AM Best will continue to monitor the outbreak and discuss the potential impact with health insurers. At this time, AM Best’s outlook on the U.S. health insurance segment remains stable.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=295209.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2020 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Bridget Maehr

Associate Director

+1 908 439 2200, ext. 5321

[email protected]

Sally Rosen

Senior Director

+1 908 439 2200, ext. 5280

[email protected]

Christopher Sharkey

Manager, Public Relations

+1 908 439 2200, ext. 5159

[email protected]

Jim Peavy

Director, Public Relations

+1 908 439 2200, ext. 5644

[email protected]

Source: AM Best