Category Archives: Pandemic

How will the coronavirus affect health insurance enrollment?

In the United States, the COVID-19 pandemic has put millions of people out of work. A portion of the newly unemployed and their families are expected to seek health insurance coverage. Some have been furloughed, which allows them to keep their employer-sponsored health insurance while applying for unemployment benefits. Others may be able to find employer-sponsored health insurance coverage with parents or spouses.

Before the Patient Protection and Affordable Care Act (ACA), newly uninsured adults and families could purchase COBRA coverage, individual market plans, or short-term plans, enroll in Medicaid, or participate more fully in federal health options for which they were eligible. Today, newly unemployed adults and their families have the following additional options not available prior to the ACA:

  • Individual market plans through the state or federally run marketplaces with federal premium assistance for qualifying households
  • Expanded Medicaid coverage in 36 states
  • Young adults (under age 26) can enroll in their parents’ employer-sponsored insurance

In this brief, Milliman’s Annie Man and Barbara Dewey discuss the health insurance options available to the newly unemployed and how this may affect the ACA individual market.

COVID-19 and the future cost of coverage in the commercial health insurance market

Although pricing actuaries are trained to project future costs in environments of heightened risk, COVID-19 has introduced unprecedented disruption and uncertainty. The pandemic has affected all aspects of the healthcare industry and the American economy, altering the landscape in ways that may both increase and decrease expected costs. This volatile and uncertain environment also presents an extraordinary challenge for health plans developing rates for 2021 commercial coverage.

This paper by Milliman’s Jeff Milton-Hall, Tom Murawski, and Doug Norris is intended to help commercial health plans navigate this evolving environment. The authors discuss key considerations for how the pandemic and its aftermath could affect the cost of health insurance coverage in 2021.

Health coverage options for the COVID-19 unemployed population

Over a five-week period in March and April, approximately 26 million Americans applied for unemployment benefits. As a result, many have lost their employer-sponsored health coverage. The U.S. healthcare system has never had to reenroll this many people this fast.

Fortunately, individuals facing changes in employment have several options for maintaining health coverage. However, navigating those options can be confusing. Among the options are COBRA, the Children’s Health Insurance Program (CHIP), and the Patient Protection and Affordable Care Act (ACA).

In this article, Milliman’s Les Kartchner and Troy Pritchett outline a road map that newly unemployed Americans may find useful as they sort out their options, offering perspective on potential factors that can be expected at the macro level.

COVID-19 considerations for pet insurance industry

The 2019 State of the Industry report from the North American Pet Health Insurance Association shows continued growth in the pet health insurance market. At the end of 2018, nearly 2.43 million pets were insured in the United States, an increase of 18% from 2017.  Gross written premium also shows similar increases, growing to $1.3 billion at the end of 2018.

Despite this growth, veterinary daily visits have fallen nearly 19% year over year from March 25 through April 5 as a result of social distancing efforts related to COVID-19.  With the decrease in veterinary visits, it’s almost certain that the pet health insurance industry is going to be impacted by COVID-19. At this point, it’s unclear whether that impact is going to be positive or negative.

In this article, Milliman’s Jamie Shooks explores how the pet health insurance industry could be affected by the COVID-19 pandemic.

How can medical management teams help enhance their health plan’s COVID-19 response?

The COVID-19 pandemic has the potential to significantly disrupt and challenge the healthcare delivery system, including health payers. It also presents opportunities for payers to leverage internal resources and deliver value for their provider partners and customers.

Traditionally, the U.S. healthcare system is bifurcated into two major types of organizations: those that deliver healthcare services and those that finance or fund the delivery of healthcare services. There are a few areas where there has been some convergence of these key functions. In particular, the introduction of risk contracts has moved provider organizations closer to the financing end of things and the growth of medical management has moved some payers closer to care delivery.

In this brief, Milliman’s Penny Edlund and Maureen Tressel Lewis highlight some areas where a health plan’s medical management team may contribute to the COVID-19 response.

Milliman projects COVID-19 pandemic could reduce 2020 U.S. healthcare expenditures by $75 billion to $575 billion

Milliman released a report today that projects the COVID-19 pandemic will reduce U.S. nationwide healthcare expenditures by at least $75 billion and by as much as $575 billion in 2020. The report, “Estimating the financial impact of COVID-19 on 2020 healthcare costs,” models 18 different scenarios with varying infection rates and durations of care deferral. 

Key findings of the report include:

  • If COVID-19 results in deferred care through the end of June, the net reduction of 2020 healthcare costs through June would be between $140 billion and $375 billion nationally. The net reduction at year-end would depend on pent-up demand as care resumed in the second half of the year.
  • If COVID-19 results in deferred care through the end of the year, either because of a “second wave” or elongated first wave of infections, the net reduction of 2020 costs will be between $75 billion and $575 billion nationwide.
  • While commercial insurance and Medicare are likely to see net decreases in costs, state Medicaid programs could experience a net cost increase as more people who have lost their jobs enroll in Medicaid.
  • Milliman expects an increase in costs after the pandemic due to deferred care and pent-up demand for healthcare services, because a portion of deferred care will be rescheduled and individuals with ongoing healthcare needs will seek care.
  • Almost all of the country faces a net decline in health expenditures, though most COVID-19 hot spots see less of a decline, because they are treating more COVID-19 patients. Some of the areas with the least decline include New York City, New Orleans, and Nassau and Suffolk counties on Long Island.

“While the testing and treatment of COVID-19 patients is increasing healthcare costs across the country, these expenses are dwarfed by the cost reductions resulting from the deferral of nearly all elective care and other care that can be delayed,” said Doug Norris, principal and consulting actuary. 

“Ultimately, the magnitude of cost reductions will depend on how long care is deferred,” said Matt Kramer, consulting actuary. “If there is a second wave of infections, or if the first wave is elongated and lasts into the fall, some amount will be offset, but regardless of the scenario, we expect COVID-19 will actually reduce U.S. healthcare expenditures in 2020.”

“Deferral of care will have a significant short- to medium-termed effect on health expenditures, but some of that will boomerang back when patients can access care normally and proceed with services that were delayed,” said Charlie Mills, principal and consulting actuary.

To view the complete report, click here.

Milliman will host a public webinar to discuss the analysis and findings on April 29, 2020, at 11:00 a.m. EDT.  Interested parties may register for the webinar here.