Tags: insurance | coronavirus | pandemic

Health Insurance in the Time of COVID-19

Health Insurance in the Time of COVID-19

(Mike Suszycki | Dreamstime.com)

By    |   Friday, 06 November 2020 10:52 AM

With 2020 dominated by the coronavirus pandemic, it is hard to believe that a new year is nearly upon us, but time continues to march on. And while the Coronavirus is likely to still be around for a while in 2021, there are plenty of potential changes that may come when the clock strikes midnight for the last time in 2020.

Great progress is being made on a potential vaccine, a historic election will be behind us, and we will have clarity for what has happened with the dreaded pandemic’s second wave (or third, depending on how you are counting).

On the coat-tails of the first installment of the State of Coronavirus and Insurance report released earlier this year, our new report aims to lay out what those changes might hold and offer some insight into what 2021 might have in store in the realm of insurance.

Health Insurance in the Time of COVID-19

The Affordable Care Act has set the ground rules governing health insurance for over a decade. But in November, that underlying law is going to be put to the test. A coalition of state attorneys general has banded together to challenge the legitimacy of the law, and that case is scheduled to come before the Supreme Court in November.

With the Senate deep in confirmation hearings for the replacement for the late justice Ruth Bader Ginsburg, it is anyone’s guess how the court is going to rule in this case.

Many people in the health care industry say the underlying lawsuit challenging the Affordable Care Act stands on shaky legal grounds, but a federal judge has already ruled that the law is unconstitutional, so even if the Supreme Court does nothing, the law will fall, leading to massive uncertainty in the health care market.

Presuming the Supreme Court doesn’t overturn the lower court ruling and allows the Affordable Care Act to go away, a clock will begin ticking for Congress and state regulators to come up with something to replace it. That is because by the time any court ruling comes down, health insurance contracts for 2021 will have already been written using Affordable Care Act guidelines, and they will be in force for the entire policy year.

However, when it comes time to renew them, all sorts of popular provisions will no longer be legally required — everything from protecting preexisting conditions, to mandating that children can stay on their parents’ policies until they are 26, to mandating that preventative health screenings be covered and eliminating lifetime and annual caps on insurance coverage.

Depending on who wins the presidential and Congressional races in November, what would replace a struck-down law could look drastically different.

Even if the Affordable Care Act is not tossed out, that doesn’t mean all will be clear in the health insurance world. That is because the health insurance industry is already straining under the pandemic, and if another wave of infections crashes across the country as the weather turns cool, those challenges could be amplified.

The main challenge is that since so many people stayed home this year rather than taking care of preventative health screenings and elective surgeries, such as hip replacements and diabetes screenings, health insurance actuaries are struggling to project what costs will be in the coming year.

That is partly because premiums are based on the prior year insurance spending, and with such a crazy year in 2020 to base prior spending on, premiums could be very unpredictable when policy renewals come up. There are also the potentially higher costs that might be coming because people weren’t taking as good care of themselves during lockdown.

One cost that is relatively predictable is what consumers will have to pay to get a COVID-19 vaccine whenever one is eventually released. Presuming the patient is covered by an employer-provided health plan, or a state marketplace plan, or even Medicare or Medicaid, that vaccine will be available at no extra cost thanks to a provision of the Affordable Care Act.

If someone is uninsured, their out-of-pocket expense will depend on which vaccine is eventually approved, but could be as low as $30 per dose, with others potentially costing much more, depending on which one is eventually approved.

The Way Forward

While the pandemic won’t go away at the strike of new year, with any luck, 2021 will offer much more clarity for the future. The election will be in the rearview mirror, vaccine candidates will be well into their clinical trials, if not ready for regulatory approval, and hopefully, the world can begin getting back to normal.

But, even with a return to normalcy, it is likely that some of the lingering effects of the pandemic will take years to work out, and may stick around in insurance policies in the form of exclusions and policy language long after that.

As always, ask questions, read the fine print, and take the changing insurance landscape into consideration. This ride is not quite over.

Michael Giusti is a senior writer at InsuranceQuotes.com. He has worked as a journalist for more than 20 years, specializing in business, insurance, finance, technology, automotive and industry-focused writing.

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While the pandemic won’t go away at the strike of new year, with any luck, 2021 will offer much more clarity for the future.
insurance, coronavirus, pandemic
Friday, 06 November 2020 10:52 AM
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