Utah insurance officials are hopeful about the premium landscape in 2021, which they say will see anywhere from a slight dip to a small increase.
Individual market rates will decrease by an average 1% next year and small group market rates will increase by an average of 3.9%, Jaakob Sundberg, a health actuary for the Utah Department of Insurance, told the Legislature’s Health Reform Task Force on Thursday.
Sundberg said this is part of a three-year pattern of minimal rate increases — a trend he attributed to the competitiveness of the market, which he said is becoming more profitable over time for those offering individual coverage.
The number of carriers has been building up since 2016, too, Sundberg said. In 2021, there will be six individual market participants and about seven carriers on the small group side.
Despite the cornonavirus pandemic, it appears that 2021 will be a fairly normal year in the insurance market, he said, noting that only one carrier opted to have a small COVID charge, with the rest taking a wait-and-see” approach to rates in the individual and small group markets. Although claims dropped off during the March through May period, a lot of claims are coming back in.
“Over the whole COVID time period, we expected some people to be dropping off and moving to Medicaid or dropping coverage altogether and moving into the individual market,” he said. “We haven’t seen any of that.”
A report issued this summer by the American Academy of Actuaries concluded that “Direct spending for COVID-19 will be offset, at least in part, by reductions in other services. The pandemic has led to significant social distancing requirements, and utilization of many services such as office visits has declined dramatically.”
Sundberg, though, said the pandemic could still shape the insurance outlook in ways that aren’t yet clear. “I think that there will be some increased costs related to pent up demand or undiagnosed ailments that occurred during the 2020 time period and the testing costs and the frequency of those services increasing,” Sundberg said.
Another concern he sees is in the area of enrollment. Although Utah as a whole has seen fairly steady enrollment, there is a marked decrease in enrollment for individuals whose insurance is unsubsidized. About 20,000 individuals have left the individual market because they were priced out. “That’s concerning for us,” Sundberg said. “In any case, it seems like there is a genuine problem with the unsubsidized market.”
He called on members of the task force to consider how to make the individual market more affordable for those who don’t get subsidies and suggested solutions like establishing a waiver or implementing a direct premium subsidy for people with incomes over 400% of the federal poverty level who don’t make enough to afford unsubsidized insurance.
The task force also voted unanimously to recommend draft legislation regarding a respite care pilot program as a committee bill. The program, which would be funded by Medicaid if a waiver was granted, seeks to provide a subsidy to a designated facility to provide short-term housing and supportive medical care for homeless adults in the Medicaid expansion population.
Currently, there are nearly 1,000 Utahns enrolled in Medicaid who are experiencing homelessness, said the task force’s co-chair, Rep. Jim Dunnigan. He said homeless individuals who go to the hospital for care are often kept there longer than medically necessary to avoid another medical crisis since the individuals don’t have a stable place to be released to. “It’s a very expensive way to deliver care,” Dunnigan said.
Tonya Hales, an assistant director of the state’s Medicaid and Health Financing Division, added that the bill would not only be a benefit to individuals experiencing homelessness but would likely result in a reduction in hospitalizations or rehospitalizations as well.
The bill could be taken up by the Legislature as soon as the next general session, which begins in January.