April 16, 2020 / By: Michael E. Wojcik, MBA, CLU,CFP®, Senior Vice President / Employee Benefit Solutions
As we navigate through the COVID–19 (Coronavirus) pandemic, healthcare and health insurance (including reinsurance) finds itself in uncharted waters, focusing all attention on the nation’s immediate needs and the care for millions to help them through these unprecedented times.
While the initial focus was to help individuals gain and afford access to screenings for COVID-19, fully-insured carriers and self-funded plans eliminated all barriers to care by covering the screening, including the site of screening, and ultimately the treatment for COVID-19 (with the employer’s approval for treatment on self-funded plans) on a first-dollar basis. This also applies to High Deductible Health Plans (HDHPs) with a Health Savings Account (HSA) without impacting the tax benefits of such plans. This was approved by the IRS on March 11, Notice 2020-15. The main goal, eliminate barriers to identify, isolate, and treat infected members to ultimately avoid the spread of the virus.
In the process, HSA plans were also approved to include Telehealth services at no cost, not subject to the deductible for a specified time through the CARES Act signed by the President on March 27, 2020.
The cost and future delivery model of healthcare are currently unstable as a result of COVID-19. Due to the contagion and overwhelmed hospital resources, many private practice and specialty groups are distressed as they are prevented from performing their specialty for elective and primary care unless there is an extreme need. Chronic care needs are now being serviced through Telehealth, especially when there are wearables available for home testing purposes. This may become the new norm after we push through the pandemic. Healthcare delivery will change as we know it!
In the near term, our plans show a slowing of claim spend unless the area develops into a hot spot for COVID-19 or serious conditions requiring immediate care. Extreme cases of COVID-19 are approaching six figures. As the stress from the pandemic grows and takes its toll on our economy, financially impacting individuals, we expect to see behavioral health claims on the rise in response to the tremendous building of anxiety and depression (another emerging area for Telehealth services).
Soon we will see surgeries and elective services return, putting surgeons and specialists back in business, while primary care, in its traditional format, could remain fractured for a while. Rx has remained constant throughout, many taking advantage of 90 day fills for convenience and peace of mind, causing a slight bump in claims. We will also see additional expense come from return-to-work testing when developed. At this point, there is not enough data to know the full impact on Medical trend.
The traditional drivers of healthcare costs still exist, but the spotlight has shifted for now. The discussion will continue after the COVID-19 pandemic settles, especially with this being an election year.
Material posted on this website is for informational purposes only and does not constitute a legal opinion or medical advice. Contact your legal representative or medical professional for information specific to your legal or medical needs.
