It's natural for the health insurance industry to shift and for the trends to adjust in response to external factors. But, what are the most recent insurance tendencies and what is causing them to change? We'll explore these details and how insurance companies are reacting in accordance.
The past two years have changed the insurance industry by way of necessity and legislation. Taking a look at insurance shifts from 2021 can inform how 2022 and beyond may look. Let's see what we can learn from the recent history of health insurance coverage.
Encouraged by smaller hospital capacity and increased proximity risk, telemedicine has increased in popularity. A study by John Hopkins Bloomberg School of Public Health found that about a quarter of telehealth users covered through their private insurance was of working age, meaning that employer-sponsored health insurance should take this into account.
Employer health plans began to offer more mental health coverage options for their workers. Previously, mental health coverage was not as popular, but as the government began to cover more mental healthcare, private and employee insurance followed suit. In California, for example, the Mental Health Parity Act required "all state-regulated commercial health plans and insurers to provide full coverage for the treatment of all mental health conditions and substance use disorders."
Accessibility became a higher priority for both public and private insurers. This was a trend before 2021, but the pandemic has further exposed the need for increased coverage options.
Additional companies are beginning to expand their payment options to make coverage more affordable. These kinds of unconventional payment alternatives can help people get the healthcare they need. However, for this to happen, insurance companies need to obtain additional funding.
As we move into the middle of 2022, there are some healthcare trends that have carried over into this year's insurance market. There are also new movements that have become evident. From hospitals to insurers, the healthcare industry is exhausted from dealing with curveball after curveball in the past two years, but what should we expect from the current landscape?
Policymakers have incentivized coverage for the average person, meaning that more people than ever have health insurance. This is mostly due to public health emergency requirements, and much of the current programming relies on this stance from the government. In many areas, however, emergency-related policies are beginning to slow. For insurance companies, it is important to note that more complex illnesses in the insured may arise as some people are once again slow to go to the doctor.
Insurance companies are preparing for the long-term impacts of COVID-19 to show in their insured customers. When it comes to hospitalizations from pandemic-related illnesses, the trends are expected to continue to some degree. PWC found that 15% of consumers reported having deferred care in 2020, something that is projected to carry over to the years to come as well.
Let's look at a real-life instance. Hospitalizations for non-COVID-19 related illnesses fall at the same time that more people are seeking medical attention for the virus. This has a long-term impact on insurers: a tailwind for businesses and a headwind for providers. It also means that insurers will pay more for postponed care than for pandemic-related hospitalizations.
The Affordable Care Act (ACA), was a big advantage for the American people as many of them were left without the jobs that they relied on for insurance. According to the Healthcare Dive, "the uninsured rate has held steady since 2019 despite the enormous upheaval across numerous industries." This has helped insurance companies in 2022 take on much less risk as a result.
In addition, lower-cost care models have become more popular. This is especially true for employer-sponsored healthcare plans, most likely due to the fact that employer health costs have risen by 6.5% this year according to Health Care Dive.
A study done by Transunion showed that 75% of patients are interested in finding out the cost of a procedure before receiving the care. This means that insurers are put under more pressure to be transparent. Patients are dealing with rising prices in the general consumer marketplace, especially when it comes to healthcare, making comparison shopping more popular than ever. This has resulted in legislation like Hospital Transparency Act, the No Surprises Act and the Transparency in Coverage Rule.
With the introduction of new technologies and innovations, insurance companies are now able to forecast more accurately and cut unnecessary spending. This is illustrated by the data found by PWC reported that 79% of consumers said that they were open to talking to their insurance provider online in some cases. Increased usage of digital tools is an important part of the future in the healthcare insurance industry. Investing in cybersecurity that protects client information and company data will be more important than ever, as digital tools are more likely to increase in popularity.
As a player in the insurance industry, you're probably tired of hearing the term "The COVID-19 hangover." However, it is an important point to consider in the coming years because it has the potential to act as an inflator for utilization and spending in the market. The demand for mental health and substance abuse treatment services has skyrocketed and the trend has spilled over into 2022 as well.
One of the biggest players in the insurance industry is the government, and their policies can impact the market in both negative and positive ways. For example, while the ACA marketplace has been active for years, 2022 brings new policy changes and rules to deal with modern issues.
We can look at the Biden-Harris Administration, which recently announced a new special enrollment period (SEP) opportunity for low-income consumers with household incomes under 150% of the Federal Poverty Level. These people must also be eligible for premium tax credits under the ACA and American Rescue Plan (ARP), which is approximately $19,000 for an individual and $40,000 for a family of four in 2022.
There is more time for Americans to enroll in health insurance coverage. While in previous years people only had 6 weeks to gain coverage, this year the limit was 11 weeks. This in itself can have ripple effects on the entire insurance market. In addition, the marketplace offers more plans with a lower premium, in the hopes that more Americans will be able to afford health insurance.
So, not only are there more options, the options are cheaper for similar coverage. The Centers for Medicare and Medicaid Services reports that benchmark plans have decreased by about 3%.
When it comes to available subsidy options, there are more choices saturating the market as well.
We are also seeing additional enhancements to premium subsidies across income levels, especially for the lower-income population. This was a big change introduced by the American Rescue Plan, which aimed to prop up the economy in several sectors. The previously discussed tax credits for those who make between 100% to 150% of the Federal Poverty Level are a great example.
To be successful in the insurance industry, you need to keep your ear to the ground, stay up to date with the latest trends and use dynamic strategies to stay afloat.
Consumers and patients are looking for inexpensive options and convenience, whether from the private or public health care sector. Collaboration within the marketplace between healthcare providers, payers and other insurance companies can be a rewarding method to manage these shifting trends.
To learn more about how to deal with the changing landscape of healthcare insurance, reach out to the professionals at Lewis & Ellis for professional insight. We have the experience, foresight and expertise to guide you through the murky waters of the changing healthcare industry. Contact us today to begin.