When it comes to setting premium rates, it’s a brave new (pandemic) world.
Each year, actuaries put out a brief outlining the factors driving premium changes for the next year. But the calculations are tricky this year.
On one hand, COVID-19 is resulting in high-cost hospitalizations. At the same time, there has been a reduced demand for other medical services such as office visits and non-emergency hospital services.
A host of other factors will also drive rates, including COVID-19 testing and treatment costs, the availability of new treatments and vaccines, increases in mental health and substance abuse treatment needs and changes to tele-medicine utilization & costs.
The COVID-19 pandemic has introduced significant uncertainty with respect to projecting 2021 rating factors which will impact both individual and employer sponsored health plans. Not to mention this is an election year and health care is one of the major reform topics.
We will continue to monitor our industry and keep you apprised with any new developments.