What's driving 2021 health insurance rate changes? 4 things to know

As insurers develop their premium rates for the 2021 plan year, they face new uncertainties from the COVID-19 pandemic. 

The American Academy of Actuaries recently issued a brief that outlines some of the main drivers of premium changes for the coming plan year. 

Here are four things to know from the brief:

1. While insurers faced increased health spending to cover the cost of diagnosing and treating COVID-19, those costs were "more than offset" by a lack of elective services and non-COVID-19 health services. The actuaries said it's unclear how this trend will continue through 2020.

2. Another driver of premium changes will be subsequent waves of COVID-19. The actuaries said insurers are likely to run multiple scenarios that look at different assumptions on when a new COVID-19 wave is likely when developing 2021 rates.

3. Whether or not services unrelated to COVID-19 will continue to be eliminated or deferred next year, or whether treatment postponed in 2020 is provided next year, will be a significant driver of potential premium changes.

4. Insurers will be looking at shifts in insurance coverage and changes to risk pool composition due to the economic effects of COVID-19. Other potential drivers in premium changes include COVID-19 testing and treatment costs, new treatments and vaccines, more mental health and substance treatment claims, greater telehealth use and changes to reimbursement rates.

Read the full brief here.

More articles on payers:
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Pandemic will cost insurers $30B to $547B, report says
Anthem: No change in 2020 profit forecast

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