Health Insurance Premiums Likely to Rise

YOUNGSTOWN, Ohio — Thanks to provisions in the coronavirus relief bill passed by Congress, all testing for COVID-19 is required to be covered by comprehensive private health insurance plans. Many carriers have gone an extra step and are covering treatments as well.

Anthem and Medical Mutual of Ohio, for example, are covering all medically necessary screenings and tests for the virus while also waiving out-of-pocket costs for patients through the end of May.

“There’s no problem with coverage. With Medicare plans, the same thing is happening,” says Amy Romano, vice president of individual and Medicare sales at R. Kashmiry & Associates, Boardman. “Most Medicare Advantage plans are waiving doctor and specialist copays through September to encourage people to get back to their doctor if they can, including telehealth visits.”

For businesses, among Gov. Mike DeWine’s first steps in reaction to the coronavirus was allowing the deferral of insurance premiums for up to 60 days. 

“Most of them are not automatically giving that grace period. You do have to reach out and tell them you’re going to take advantage of that,” says Dee McFarland, owner of Reliable Consulting Group, Youngstown. “The caveat to that is they’re extending the grace period, but they’re not giving relief. At the end of that grace period, you do have to pay all that premium. It’s really just putting off the inevitable.”

Insurance providers are also required to continue coverage for workers under group plans even if they don’t meet the standards in at-work clauses in their insurance contracts. Insurers are not permitted to increase premiums for employers who’ve had a decline in enrollment.

With insurance carriers all on the same page for whom and what is covered during the coronavirus pandemic, the big question is what happens down the road, especially regarding premiums. In general, explains Bob Gearhart Jr., partner at DCW Group in Boardman, there are two trains of thought. One is that the unexpected costs of COVID-19 treatments will drive up premiums. The other is that because nonessential procedures and medical visits were suspended at the onset of the pandemic, the reduced costs there will offset those brought by the virus.

“My personal opinion is that both of those are sort of correct. We did see a drop in nonessential care and an increase in COVID-related treatment. But as states open back up, it’s not as though consumers will never get that nonessential care,” he says. “Eventually, those procedures that were deferred will come back into the market. They’re all going to blend together. I don’t have a sense right now if that will happen in six to 12 months or 12 to 24 months.”

The change in premiums will likely be determined in the coming months, says George Morris, president of Morris Financial Group in Salem.

“The biggest issue will be at renewal time. Everyone’s wondering what pricing is going to be and I think that’s yet to be determined,” he says. “That bloc [of small groups with up to 50 employees] will be priced, confirmed and relayed to clients around mid-September. It stands to reason that pricing will be determined over the next two, three months.”

He adds that businesses that received loans through the Paycheck Protection Program can use some of those funds to pay their insurance premiums, although he notes that if the coronavirus has a resurgence over the summer, those funds are likely to be depleted by then.

At Kashmiry & Associates, Romano says that while it’s too early too tell, she doesn’t expect a major increase in premiums for businesses.

“Utilization is way down, so that may not have as big an impact on the overall picture,” she says. “They aren’t going for minor things and, until recently, couldn’t get some procedures. They’ve pushed aside cataract surgeries and knee replacements and things like that.”

While it is another thing for business leaders to worry about – especially with so much already on their plates – the brokers are encouraging clients to re-examine their plans and try to forecast where they’ll be in the next year.

“Whatever decision you make, make it balanced. You don’t want unknown or excess costs because of this,” Gearhart says. “But at the same time, you don’t want to create an environment where people don’t feel safe or unprotected.”

July and August, McFarland says, is the time for businesses to begin to look at their plans.

“Think about what your workforce is going to look like at that time. It’s more important than ever to think about what your company looks like over the next few months because of the virus,” she says. “Most of our customers renew in fall to early January. Come July and August, that’s the time to start getting your stuff together to look at renewals.”

For businesses still using policies that were grandfathered in after the Affordable Care Act – those in place before March 23, 2010 – Morris encourages them to look at newer options.

“Be aware of the new offerings out there like multiple employer welfare association programs, which major companies are offering up side-by-side to those grandmothered plans,” he says. “The Affordable Care Act plans are still around, but are high-cost and limited to combinations of populations that are very old and very sick.”