The impact of COVID-19 is reaching all aspects of our lives, and employer health plans are far from immune. Aside from the complex compliance issues that have arisen in recent months, claims experience is going to look different this year. Oswald’s Data Analytics team is working closely with clients and their service teams to utilize available research and plan-specific data to evaluate the potential impact of the pandemic under a variety of plausible scenarios.
Every day we are learning more and more about this virus. We know risk increases with age. We know people with certain chronic conditions, or a history of respiratory illness may be at higher risk of complications. Assessing the demographics and illness burden of your population can help you understand where the risks lie.
We anticipate certain utilization measures, such as emergency room visits, office visits, and telehealth visits, will take on a different pattern over the next several months as patients and doctors consider alternative care delivery options and people postpone non-urgent medical care. Perhaps this will lead to greater adoption of telehealth options even after the pandemic ends as people become more comfortable with seeking care in that way. There may be an increase in mental health as people deal with isolation and anxiety. We may even see an uptick in pregnancies. Using pre-COVID-19 data through February as a baseline we will be able to see how utilization trends change throughout the rest of the year.
There is a wide range, from mild cases that involve staying home and resting to rarer severe cases that involve an ICU admission and potentially a ventilator. Depending on the aforementioned risk exposure coupled with the current environment your workforce is subjected to (are employees hunkered down at home or are they on the front lines stocking grocery shelves?), the prevalence of positive COVID-19 tests and severity of required treatment will vary and should be factored into the cost modeling. Some employers may have opted to cover out-of-pocket costs for treatment which adds an incremental cost to the plan.
Health care systems are focused on providing treatment for COVID-19 patients, and in an effort to minimize risk for other patients, have postponed elective procedures. In some cases, people seem to be avoiding ERs and doctors’ offices, even for necessary care, out of fear of contracting the virus. This will likely cause a decrease in claims beginning in March 2020 and through the summer, or perhaps longer. However, employers should not think of this as a decrease in their budget as we anticipate a portion of those claims will come back later in the year and into 2021 once these procedures are rescheduled and members are comfortable entering health care facilities again. A consequence may be that conditions worsen over time without intervention, and cost more when treatment commences. Similarly, but in the opposite direction, PBMs have allowed earlier and longer fills of medications so there may be an acceleration of pharmacy claims in the short term.
These considerations apply to both self-insured and fully-insured employers in some way. Self-insured because they will be directly experiencing the impact of fluctuations in claims. Fully-insured because the carriers will experience the same fluctuations and will have new information to consider when providing the next renewal.
In addition to helping our clients navigate compliance issues and communication strategies around COVID-19, Oswald is committed to continue monitoring the impact on our clients’ demographics, utilization, trends, and claims.
Note: This communication is for informational purposes only. Although every reasonable effort is made to present current and accurate information, Oswald makes no guarantees of any kind and cannot be held liable for any outdated or incorrect information. View our communications policy.