LANSING — Add another question to the series of unknowns raised by the new coronavirus: How will the cost of health insurance change?
It's unclear, and insurance providers are scrambling to set plan prices for 2021 without knowing how much they'll need to cover costs of customers sick with COVID-19 and other ailments.
Their predictions will determine what many Michiganders pay for health insurance in 2021, a year in which doctors predict the coronavirus will continue threatening public health and economists predict it will continue to upend the state's economy.
"All of a sudden, you have this new pandemic and all the claims that are arising from that," said Jeffrey Romback, Michigan Association of Health Plans deputy director of policy and planning. "It's going to impact the rate, but a lot of our plans today just don't know [how].
"It's just a huge uncertainty."
Michigan health insurers have to turn in their projected 2021 rates by summer — for some, as soon as Wednesday — and the coronavirus has rendered the standby equation for setting health insurance prices largely unusable.
Companies normally use costs, spending and enrollment information from the previous year to project the next. Their experiences in 2019 would determine what they charge in 2021.
But the coronavirus walloped the U.S. in 2020, and insurance companies don't know how to factor it into their price calculations, said Cynthia Cox, vice president of Kaiser Family Foundation and director of the foundation's Affordable Care Act program.
"[Insurers] have to start projecting their costs and justifying their premiums now even though they don't have enough information to accurately do that," she said.
COVID-19 overwhelmed some hospitals, emptied others. How will that impact prices?
The health insurance system is like a bank, Cox explained. Customers' monthly premiums are deposits and payments for doctor visits, surgeries and medicine are withdrawals.
In March and April, many health care systems emptied their hospitals and delayed elective procedures to prepare for a potentially overwhelming number of COVID-19 patients.
Mid-Michigan hospitals, for example, recently resumed time-sensitive procedures.
Delaying procedures means insurers pay out less money, Cox said. But that's only for now — some patients will reschedule procedures and insurers will foot at least a portion of those bills.
"That's one of the hard things insurers are going to piece together," she said. "When are people going to start getting that care again? How much demand is there going to be? How much of that care was foregone altogether or just delayed? Was it delayed into later this year or 2021?"
Widespread delays of procedures into 2021 could mean it's an expensive year for insurers, driving prices up.
But there's another complicating factor: a predicted economic recession, which traditionally slows the health care spending and could limit price increases.
"There’s this pandemic economy that's happening more broadly, but there's also the pandemic economy of health care that's going to be even harder to predict," Cox said.
"If we think people are still going to be cautious about getting health care because of fear of contracting the virus, they also might be cautious about getting health care because of fear of how it’s going to impact their finances."
Nearly all of the state's health insurance companies agreed to waive copays, deductibles and coinsurance for COVID-19 testing and treatment for commercial health insurance plans. Medicare and Medicaid also have waived those costs.
"Don't worry about the cost," Romback said. "If you test positive, it's taken care of."
It's unclear how that additional COVID-19 coverage will affect insurers or 2021 prices, Romback said.
Companies are waiting for claim data to come in for the weeks Michigan has battled the disease. Without it, they don't know what to expect for 2021.
"We can only encourage everyone to understand this is really one of those issues where we need more time," he said.
2021 individual health insurance prices due Wednesday
They won't get it. Companies who sell small group insurance plans on the Affordable Care Act Marketplace in Michigan must turn in their 2021 rate prices to state insurance regulators on Wednesday. Rates for individual plans are due June 10.
An actuarial firm will review the prices, Michigan Department of Insurance and Financial Services spokesperson Laura Hall said in an email. Insurers must justify cost increases over 15%.
Proposed 2021 health insurance plan prices will be posted online for public comment in early July, Hall said. Final rates will be available Oct. 31. Open enrollment will start Nov. 1.
It's too early to comment on pricing, Hall said.
DIFS Director Anita Fox issued a bulletin about 2021 premium costs on May 7, acknowledging the challenges companies face forecasting next year's spending while a pandemic disrupts the global health care industry and economy.
"DIFS is keenly aware that significant rate increases for [2021] will affect enrollees at a time of extreme financial uncertainty," Fox wrote.
More: Michigan pushes to expand insurance coverage for addiction treatment
Contact Carol Thompson at (517) 377-1018 or ckthompson@lsj.com. Follow her on Twitter @thompsoncarolk.
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How the coronavirus could upset Michigan health insurance premiums in 2021 - Lansing State Journal
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