As Americans put off hospital visits to avoid COVID-19 exposure, insurers are seeing big profits, but many are expected to raise premiums next year anyway.
Americans are avoiding hospitals and clinics, even when they shouldn’t be. Experts expect a jump in preventable diseases after the pandemic eases.If the insurance exchanges in other states offer any guidance for Covered California, it is in the direction of moderate premium increases for 2021, though there is wide variation. A Kaiser Family Foundation analysis last week of proposed 2021 rates in the exchanges of 10 states and the District of Columbia showed a median increase of 2.
The consensus among industry experts is that COVID-19 has generated little pressure for rate rises, and health plans should err on the side of moderation. But some fear that many insurers will hold on to the reserves they’ve built up, citing the possibility of widespread vaccinations and concerns that the care forgone in 2020 could rebound with a vengeance next year.
The rate proposals expected to be unveiled next week will be subject to scrutiny by state regulators before they are finalized. Sign-ups for the plans start Nov. 1 and run through Jan. 31. This year, the average Covered California rate increase statewide was 0.8%, the lowest since the exchange started providing coverage in 2014.The benefits reaped by health plans so far in the pandemic can be seen in strong second-quarter earnings and reduced spending on care.
But UnitedHealth, which does not participate in Covered California, is seeking a rate increase of 13.8% in the New York exchange. Anthem, which covers about 80,000 people in Covered California, is planning rate hikes of 16.6% in Kentucky and 9.9% in Connecticut.On the other hand, Kaiser Permanente, which covers more than one-third of Covered California enrollees, plans rate cuts in other states, ranging from 1% in Hawaii to 11% in Maryland.
That moderate effect is largely attributable to what Katherine Hempstead, a senior policy advisor at the Robert Wood Johnson Foundation, called “a kind of yin and yang: If you have a lot of COVID, you don’t have a lot of other healthcare spending.
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