Health insurance companies regulated by New York state are waiting to hear back about their requests for 2021 rate changes for premium holders. The companies, like nearly every other industry, face many uncertainties due to the COVID-19 pandemic.
The health insurance companies are asking for the New York State Department of Financial Services for an average increase of 11.5 percent.
Bill Hammond, health care policy analyst with the budget watch dog group The Empire Center has examined the documents submitted by the companies. He says the requests are all over the map.
“You have this big range,” Hammond said. “One company is asking for a 29% increase, and another company is proposing a 4% cut.”
Meanwhile, the number of claims submitted by patients this spring declined significantly. Elective surgeries across New York were canceled for a time during the pandemic-related shutdown, and people avoided the doctor’s office and hospital emergency room. Hammond says some insurance companies may have to issue rebates to premium holders, because under the law the companies must spend 82 to 85 cents of every dollar directly on medical care.
“This may be a little counterintuitive,” Hammond said. “We’re in the middle of a health care crisis, right, but the overall impact on the health care system has been to reduce people using health care.”
Erik Linzer is the head of the New York Health Plan Association, the lobby group for numerous health care plans that cover 8 million New Yorkers. He says like everything else today, there’s so much uncertainty that it’s hard to plan for the future. He says it’s estimated that the COVID-19 pandemic could cost New York’s health care industry $2 billion due to caring for those who are the sickest from the disease. There is also additional cleaning and sanitizing required, increased testing of patients and extra personal protective equipment for even routine care. Also, he says, insurers are waiving fees for testing and telemedicine visits and giving individual and business policy holders a grace period to make their scheduled payments late.
He says at some point, though, people will need to resume making medical appointments and getting needed procedures, and the delay may have made them sicker.
“It’s possible that because folks had to delay care that their treatment will be more complex and more costly as a result of that delay,” Linzer said.
Linzer says there’s also a concern about implementing a possible vaccine program in 2021, and the costs associated with that. He says the health insurance plans will provide coverage for any vaccine that meets with the national Centers for Disease Control approval.
“It’s going to be really important that drug manufacturers, those that come out with a vaccine, price it appropriately and reasonably,” said Linzer, who added that a vaccine is essential to keeping the state and its economy open.
Another factor that insurers must consider is the high unemployment rate. Most people’s insurance in New York is tied to their job, and if they lose their employment their insurance is lost with it.
In past years, the state Department of Financial Services, which approves the rate changes, has not granted the increases that insurers have requested, but has approved premium hikes at slightly lower rates.