INSURANCE TRENDS AND POSSIBLE CHALLENGES IN 2022-2023

As the insurance industry responds to rapidly evolving employee needs, the demand for forward-thinking technology capabilities from medical carriers roared last year and will continue to do so in 2022-2023. US employers and insurance carriers remain concerned about the pandemic, especially when it comes to mental and physical health. This has led to advances in virtual care, behavioral and mental health services, and a heightened focus on health equity.

Popular healthcare trends, predictions and possible challenges the insurance industry faces in 2022-2023:

1 – The need for mental and behavioral healthcare continues to soar: As the pandemic worsened, Americans dealt with changes in their work, family, and community. Stress levels continued to surge as people could not access their usual support systems and continued to worry about when or if life would ever “normalize.” According to the Centers for Disease Control and Prevention (CDC), many of the largest health insurers in the U.S have seen a 25 percent increase in outpatient behavioral health visits between “2020-2021” and it’s predicted to continue through “2022-2023”.

2 – The path toward health equity: Health disparities sometimes referred to as social determinants of health, can include gender, sexual orientation, income, race, and geographic location. For example, rural communities and areas with high poverty rates may have few or no hospitals and medical professionals. A recent study from County Health Rankings highlights that health behavior combined with social and economic status overwhelmingly impacts health and well-being. Ironically enough, many of these same factors are often used to set insurance rates, leading to changes in health legislation in many states to avoid discrimination.

3 – The rise of insurtech: Insurtech providers are adding AI-powered capabilities to medical carriers in the form of predictive underwriting tools. Insurance is, at its core, a financial product and has traditionally been seen as a “win-lose” product. When a claim is paid correctly, the policyholder “wins,” and the insurer “loses.” Predictive underwriting insurtech tools that bring greater transparency and fairness to rate setting, coupled with insurtech solutions geared toward incentivizing policyholders to reduce risk through adopting healthy habits, can result in employers’ “triple win” scenario. Healthier employees, paying less money for health insurance, can be happier, more productive, and loyal to their employer.

4 – Insurance possible challenges:

• COVID-19 testing as a wildcard: The handling of COVID-19 testing in 2022-2023 is keeping many medical insurance actuaries up at night. Under the most recent guidelines, many health plans allow 8 tests per employee and reimburse $12 per test, equating to up to $96 per employee. Although many health plans are still finalizing guidelines to address this concern, these new costs can be devastating to high deductible health plans.
• Tread with caution when underwriting groups based on geography: Vaccination rates in states such as Vermont and Rhode Island are upwards of 78%, while vaccination rates in states like Georgia and Arkansas are around 50%. Underwriters now widely understand that the severity of COVID-19 related claims is related to vaccination rates. The industry will see an uptick in costs associated with stop-loss specific deductibles in areas with lower vaccination rates.
• Co morbidities driving spec claims: In a study from AAMC, there has been an increase in chronic diseases due to unhealthy pandemic-driven behaviors. Since lockdown, the average weight gained per individual is an alarming 29 pounds. Also, alcohol consumption has increased substantially, leading to a 50% increase in wait time for liver transplants. Lastly, diabetes, 10.5% of Americans currently has diabetes, and roughly 34.5% of adults are pre-diabetic. These are just a few of the many examples straining our healthcare system and ultimately having a huge impact on stop-loss rates.