Industry News

On June 10, 2020, the American Academy of Actuaries (AAA) released its issue brief, Drivers of 2021 Health Insurance Premium Changes: The Effects of COVID-19.  According to the brief, during the first six months of 2020, increased health spending due to the direct costs of diagnosing and treating COVID-19 seems to be offset by a reduction in non-COVID-19 health services.  However, it is uncertain how trends will continue throughout the end of 2020.  

Furthermore, the COVID-19 pandemic has presented significant uncertainty related to projecting 2021 claims levels.  The effects of COVID-19 on premiums for 2021 will depend on assumptions related to: 1) the emergence of subsequent COVID-19 waves in 2020 or in 2021; 2) whether non-COVID-19 utilization continues to be deferred or eliminated in 2021 or whether treatment deferred in 2020 is provided in 2021; 3) the pandemic’s economic effects on shifts in insurance coverage and risk pool composition; and 4) COVID-19 testing and treatment costs, the availability of new treatments and vaccines, increases in mental health and substance treatment needs, changes to telehealth utilization and costs, and changes to provider reimbursement rates.

The brief is available here.