This autumn is shaping up to be one of the most momentous open enrollment/annual renewal cycles that any benefits profession- al has ever seen. Already, the post-COVID- 19 predictionsare shaking up the marketplace. One widely publicized report by Covered California predicts insurancepremiums could increase by up to 40 percent nextyear. Those numbers sound terrifying for businessesalready grappling with what could be an extendedmacroeconomic slowdown.
In truth, I believe those predictions are likely tobe overblown. As I write this in early April, we don’tknow how the path of the disease will progress orwhether the many steps governments are taking to“flatten the curve” will work in controlling its spread.
At the same time, we are seeing signs that overall
health care spending might not rise that much this
year. This belief is evidenced by the fact that patient
inflows at many hospitals outside of the virus hotspots
have slowed due to people fearing entering environ-
ments where the disease may be present. Similarly,
primary care and family physicians from Little Rock to
Los Angeles are being forced to cut staff, skip payrolls
and plead for loans as patients skip visits in droves
and most elective procedures are canceled. This could
actually have a positive impact on health outcomes;
after all, many elective procedures are high-dollar but
low-value, rendering them useless or harmful anyway.
Another thing to keep in mind is that not everyorganization will be equally hit by these events. Organizations with a younger, healthier workforce thatdidn’t hesitate to social distance will likely have fewercoronavirus claims than organizations with an olderworkforce that either chose to keep their brick-and-mortar office open or were considered essential.
In the end, it’s plausible that net claims could actually go down in all this, not up. We’ve known for along time that at least 30 percent of high-cost procedures are inappropriate. Almost all of those aren’thappening now and likely won’t happen for a fullquarter. In fact, some will never happen.
THE START OF SOMETHING BIG COVID- 19 will eradicate underlying dysfunctionin our health care system.
Here’s what that means for advisors.
BY DAVE CHASE
