Broker Check

Insurance Market Updates

Lauren C. Stuart

Executive Vice President


It’s the time of year for enjoying a slowdown in the pace of life. After all of the business and regulatory changes brought by on by COVID-19, it is a welcome reprieve.  With just a few weeks to refresh before the 2022 insurance roll-out, our team is actively studying insurance market developments and updates that impact you.  Here are a few tidbits we thought you might find interesting.

 Insurance Cost Trends

With the COVID-19 related business closures and stay-at-home recommendations, it isn’t surprising that health insurance claims declined across the region.  There was a dramatic decrease in spending during the Spring of 2020 with utilization picking back up during the second half of 2020.  Overall, healthcare spending was lower in 2020 than 2019.  This resulted in higher 2020 gross margins for insurance carriers.  To provide perspective, in 2019 the gross margin per member per month in an Employer sponsored plan was $69 compared to $80 in 2020.1 Medical Loss Ratio (MLR) rebates are expected to be substantial according to a recent Kaiser Family Foundation Analysis.1

Another side effect of the pandemic was a significant decline in cancer diagnoses. “The number of new cancer diagnoses in the U.S. plummeted by 50% last year during the months after the onset of the COVID-19 pandemic, Norman Sharpless, M.D., director of the National Cancer Institute” reports.This decrease is attributed to the abrupt drop in cancer screenings and not to an actual lower incidence of cancer. 3 Given the strict and prolonged closures in our region, this isn’t surprising.  However, catching treatable disease early can make a large difference in outcomes and treatment costs.   One interesting trend during the past year to combat lower in-person screenings was the increase in the use of home-based screening tests like the fecal immunochemical test (FIT) for colorectal cancer. 4  Individuals using home-based screening kits need to check with their insurance carrier to determine if the kits are covered and the cost-sharing level.  

What does this mean for insurance costs?  While this remains to be seen, it is anticipated that underwriters will build this data into their cost estimates for the upcoming year.  According to a Price Waterhouse Cooper’s (PwC) report “Where is the medical cost trend headed in 2022?”, 6.5% is the predicted increase in cost to treat a condition from one year to the next, assuming benefits remain the same.5  Compound this with the concern over delayed diagnoses, additional services being added to required preventive service list for insurance plans, and this is a recipe for higher increases in 2022.   

While it will be a few more weeks before the first 2022 insurance renewals begin to arrive, individuals can take immediate personal steps to schedule missed medical appointments and screenings.  The chatter around the weekend BBQ is often directed to the first places everyone wants to visit or the people they want to see.   The doctor may not be top of the list.   Let’s encourage each other to make our health a priority and schedule any missed screenings. 

Legislative Notes

On April 30, 2021, the Department of Health and Human Services (HHS) published the Annual Notice of Benefit and Payment Parameters for 2022.   A notable change was made to relax the rules around eligibility for a special enrollment period to assist those that receive subsidies for coverage under COBRA.  This is a welcome clarification for industry professionals.   Here is a quick summary; individuals with COBRA coverage may qualify for a special enrollment period to enroll in individual health insurance coverage based on the cessation of employer contributions or government subsidies (such as those provided for under the American Rescue Plan Act of 2021) to COBRA continuation coverage. 

The “No Surprises Act” prohibits surprise bills for emergency services or at in-network hospitals without advance notice beginning in 2022.   This is positive news for consumers!  It is important to note that this does not apply to ground ambulance services leaving a gap for surprise bills.  According to a recent study, approximately ½ of emergency ground ambulance rides result in out-of-network charges for individuals with private insurance.  Approximately 3 million emergency ambulance rides occur each year.   A panel has been established to review the billing practices related to ground ambulance services and guidance will be forthcoming.6

Our office is closely monitoring the legislative and carrier landscape for important updates.  We are anxiously awaiting more information on items like the cost transparency rules. 

Technology

Technology has changed and improved many facets of our working and personal lives.  Insurance has felt slow to catch up to the technological advances of other business segments.  The insurance renewal and enrollment process has long been criticized by employers as heavy laden and clunky.  The good news is that innovative technology providers have developed solutions that work for small and mid-market businesses.  Our office has seen an increase in businesses switching from the stress of paper forms (faxing, copying, incomplete and illegible forms) to easy to use benefit enrollment systems. 

Let us help you streamline your next open enrollment, easily reach employees that don’t report to a centralized location each day and eliminate a large amount of paperwork through technology.  If you have been putting off implementing benefit technology, please reach out to your account manager to discuss.  We can show you how to leverage technology to improve data accuracy along with the employer and employee benefit enrollment experience. 


 2022 Inflation Adjusted Amounts for Medical Plans

 

Minimum Deductible for a High Deductible Health Plan to be HSA Qualified

Out-of-Pocket Maximum* for High Deductible Health Plans

HSA Contribution Limit

HSA Catch-Up Limit for those 55 or older

Individual

$1,400

$7,050

$3,650

$1,000

Family

$2,800

$14,100

$7,300

$1,000

 

*Out-of-Pocket Maximums for Non-Grandfathered Group Medical Plans (non-HDHP plans) are $8,700 for individuals and $17,400 for families.

What’s Next?

There is no slowdown in anticipated changes as the current administration works to reverse Trump-era modifications to healthcare.  As more information is released, we will share it with you.   We love talking with you directly about the needs of your business.  If you have any questions, please do not hesitate to reach out to your account manager at 610-251-0670.

 

References

  1. McDermott, Stolyar, Hinton, Ramirez, Cox, Fuglesten Biniek, Neuman, Rudowitz (2021, May) Health Insurer Financial Performance in 2020, https://www.kff.org/private-insurance/issue-brief/health-insurer-financial-performance-in-2020 
  1. Wherwein (2021, February) U.S. Cancer Diagnoses Fell by 50% in 2020 Amid the Pandemic, says NCI Director Sharpless, https://www.managedhealthcareexecutive.com/view/u-s-cancer-diagnoses-fell-by-50-in-2020-amid-the-pandemic-says-nci-director-sharpless
  2. Sharpless (2020, June), COVID-19 and cancer, https://science.sciencemag.org/content/368/6497/1290
  3. NCI Staff (2021, March) For Cancer Screening, COVID-19 Pandemic Creates Obstacles, Opportunities, https://www.cancer.gov/news-events/cancer-currents-blog/2021/cancer-screening-decreases-coronavirus-pandemic
  4. PwC Health Research Institute, (2021) Medical cost trend: Behind the numbers in 2022 https://www.pwc.com/us/en/industries/health-industries/library/assets/pwc-hri-behind-the-numbers-2022.pdf
  5. Amin, Pollitz, Claxton, Rae, Cox ( 2021, June) Ground Ambulance Rides and Potential for Surprise Billing, https://www.kff.org/private-insurance/issue-brief/ground-ambulance-rides-and-potential-for-surprise-billing