November 7, 2021
2022 Will Challenge Health Insurers
COVID has transformed health insurance and what it means for coverage, pricing and patient care for years to come.
Looking toward 2022, health insurers are going to be wrestling with all the ways COVID has transformed the health insurance industry and what it means for coverage, pricing and patient care for years to come.
Some positive things have come from the response to the pandemic — the rise of telemedicine and a blunted cold and flu season both come to mind. But, more than anything, the pandemic has brought uncertainty that is going to take months, if not years, to completely work through, including within the health insurance industry.
Before COVID-19, telehealth made up a sleepy corner of the health care delivery system.
Held back by uneven reimbursement schedules, telehealth served as a niche solution for just a few healthcare problems.
But as social distancing and government-imposed lockdowns swept the country, many people gave telehealth a fresh look. Perhaps more importantly, federal regulators changed how Medicare and Medicaid reimbursed telehealth appointments within their programs.
A recent assessment by McKinsey showed a 38-fold increase of telehealth appointments during the core of the pandemic. And it makes sense. Patients were looking for ways to stay away from other people, but they still needed healthcare. Seeing a doctor from the comfort of their own couch was a great solution.
But many patients also embraced the new healthcare delivery for other reasons. People with transportation challenges flocked to telemedicine as a way to avoid the commute to the doctor, and parents used telemedicine to help solve child care dilemmas. Plus, telemedicine was a convenient way for professionals to see a doctor from their cubicle during their lunch break.
So, what started as a pandemic workaround looks like it may be here to stay.
The question mark when it comes to telemedicine is whether the more generous reimbursements offered to providers during the pandemic will continue into the future. If insurers or federal regulators change back reimbursement schedules, many providers may pull back on virtual appointments, even if their patients are still asking for them.
See also: On COVID Vaccine: Do the Math
One of the areas of healthcare that has thrived during the pandemic, including via telemedicine, is mental health. Therapy appointments don’t rely on physical evaluations, so they seem to be a natural for telemedicine technology.
That still doesn’t mean that every patient who was looking for mental health services could find it, even though it is covered by all Affordable Care Act-compliant plans. An October 2021 report published on insurancequotes.com cited data from the National Alliance on Mental Health, which found that as many as 55% of psychiatrists are not accepting new patients, and that a third of people who want to find a mental health provider say they cannot find someone who would accept their insurance.
The lack of availability is bad news. According to the Kaiser Family Foundation, four in 10 adults reported anxiety or depression during the pandemic, up from one in 10 before. 36% reported having difficulty sleeping, 32% reported changes in eating patterns and 12% reported an increase in alcohol or substance use.
Some industry analysts hope that innovations in telemedicine may continue to ease the bottleneck, but a shortage of mental health providers is likely to continue into the foreseeable future.
COVID-19 has thrown a major wrench into the normally well-oiled policy pricing system. Because premiums are priced according to past years’ experience periods, the past two years pose a problem.
For one, COVID-19 disrupted normal care patterns. Early in the pandemic, people avoided routine care, and many of those who did contract the virus faced astronomical ICU costs. Pandemic surges also forced some overburdened hospitals to delay elective procedures.
In addition, most insurers have now stopped waiving patient shares of COVID treatment, and there is very little in the way of reliable pricing from the recent past to use to set future premiums.
Other major challenges include the uncertainty about whether there will be future COVID waves, whether a relaxation of masking and social distancing will cause cold and flu cases to again surge and how two years’ worth of deferred or avoided care could affect morbidity when it comes to chronic conditions.
With all of that, insurers run the twin risk of either over- or undercharging premiums for 2022.
Discussions of health policy and COVID cannot be had in a political vacuum. Whether the conversation is about vaccine hesitancy or employer vaccine mandates, tempers flare.
The biggest question for health insurance providers is how the courts are going to handle so-called COVID surcharges. While the Affordable Care Act mandates that different premiums cannot be charged to similar people based on their health history, many employers are charging unvaccinated employees surcharges on their health costs. Employers are taking different routes, ranging from wellness programs to EEOC-endorsed incentive programs, but, no matter the legal justification, the issue is almost certain to land in federal court.
Navigating the political waters is going to be a challenge for every health insurer for the year to come.
See also: Mental Health in Post-COVID Era
COVID-19 will have a lasting impact on the healthcare industry. Navigating pricing, the future of telehealth and the political uncertainty is going to take a careful hand.
But, for companies that respond deftly, 2022 also has the potential to offer a cautious return to normalcy, even amid massive uncertainty.