Each year, we prepare for the possibility of rising health insurance premiums in the following year. Premiums affect not only individual budgets, but also the bottom line for any business that offers a group healthcare plan. Since this is an issue that truly affects all of us, many of you might be wondering how the Covid-19 pandemic will impact health insurance premiums.

Premium changes are based upon projected spending on healthcare services, and that’s exactly where this issue gets tricky. So far, we know of a few things that might impact future rates, such as…

Decreased demand for routine or elective services. With the demand for routine care and elective surgeries currently very low (due to either hospital policies, fear of contracting Covid-19, or a combination of both) insurers are paying out far less for these services. Typically we might expect lower payouts to result in lower premiums for all, except of course for one complicating factor…

Care for Covid-19 patients can be expensive. You might have seen the news reports about one Washington state man, who survived Covid-19 only to confront a hospital bill amounting to over one million dollars. Most Covid patients won’t incur bills quite that large, but hospital care does not come cheap. Insurers are also footing the bill for widespread Covid testing, in an attempt to identify positive patients and slow the spread.

Looking toward the future (and premium rates for 2021), we will keep an eye on a number of factors:

• Will decreased routine care result in more illness, and therefore more demand for healthcare services?
• Will treatment options for Covid-19 prove successful and affordable, increasing odds of survival and lowering hospital bills for those patients?
• Or will those treatments be very expensive to manufacture and distribute?
• Will a second (or third) wave of Covid-19 result in overloaded hospitals and higher medical bills?
• As people lose or change jobs, how will this affect health insurance enrollment in both the group and individual marketplaces?

As you can see, these variables are hardly set in stone, and will likely shift over time. We will continue to track the trends with regard to Covid-19, healthcare spending, and likely impacts upon premiums. In the meantime, do contact us if you have questions or concerns, and we can help you to evaluate your health insurance options.