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.
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