Employers whose health insurance plans are up for renewal in the fourth quarter might already be reeling from the sticker shock they’re seeing in premium increases, which in some cases are up 10% or more.
Though statistics show utilization was way down in the first half of 2020 because of the economic shutdown related to the pandemic, cancellation of elective procedures during peak outbreaks of the disease, and just general fear about contracting COVID-19 in a doctor’s office or emergency room, insurance brokers say employers and individuals are not seeing a corresponding drop in their premium renewals so far.
“Employers are concerned,” says Kerry Drake, BSX Insurance employee benefits president. “They don’t know where to turn.
Granted, plans that will renew this fall on the first of September, October, November or December do not reflect rate changes made as a result of the pandemic, according to Blue Cross and Blue Shield of Louisiana health care economist Mike Bertaut.
Rates that go into effect this fall were set back in fall 2019, months before anyone here had heard of the novel coronavirus. Plans that renew beginning in January, on the other hand, will see rate changes that factor in the effects of the pandemic.
Drake predicts the increases will be steep because big insurers are concerned about two things: a steep rise in COVID-19 cases during the winter flu season and the negative health impacts caused by delays in preventive and routine care earlier this year.
“The Blues and Uniteds are being so cautious and so conservative,” he says. “Based on what I’m seeing with my fall renewals, I’m really worried about what will happen with rates in the new year.”
Bertaut, however, says it’s too soon to predict doom and gloom. He says employers and employees will know more in about six weeks. Until then, the actuaries are looking at the tables trying to figure out where to set rates for 2021.
“We’re kind of like the SEC right now,” Bertaut says. “We like to wait until the last possible minute to come out with something because this is new territory we’ve never been in before. So much is changing so fast.”
