Back in July we showed you the first chart below. This chart illustrates that slightly more than 60% of health care encounters left the system while the pandemic took its hold on America. As you can see, health care visits returned to the system but still lagged behind pre-pandemic levels in mid-June by as much as 10%.
This is the data that health insurance company actuaries and underwriters used to set premium rates for 2021. Because of the exodus of claims from the system, most decided to include a “Covid-19 Load” in 2021 premiums. We have seen this load range from 1.5% to 9.2% depending on the underwriter. The rationale is that the months with unusually low claims should be “completed” to reflect normal activity and that some claims will “slide” from 2020 to 2021.
However, more recent data suggests that the claims have already returned to the system. The second chart represents a block of self-funded groups with the red line indicating projected “budget” set pre-pandemic and the blue bars indicating the monthly claim activity. The months of April and May coincide with the first chart. But those claims came back with a vengeance in September and October. This block of self-funded groups is now running “on budget” and right at projected levels for the full year. (March’s relatively high claim activity can be tied to health plans allowing early fill of prescriptions as the public began to stay at home).
We believe that it would be wise to re-visit 2021 self-funded health plan budgets if they included a “Covid-19 Load.”