Uncertainty Among Insurers Evident in 2021 Rate Filings

October 19, 2020


Craig Wilson, JD, MPA
Director, Health Policy

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Most insurers nationally are not factoring in the effects of the COVID-19 pandemic for 2021 individual health insurance marketplace premiums, according to a report published today by the Kaiser Family Foundation that examines regulatory rate filings used to justify rate increases. Of the 43% of rate filings specifically noting the effect of COVID-19 on 2021 rates, the median rate impact was 1.1%.

Arkansas insurers either did not specify a COVID-19 impact on rates or specified a 0% impact. Overall rate increases approved by the Arkansas Insurance Department for state’s insurers in 2021 ranged from 2.9 to 4.9%, as we noted in a previous blog. We also recently published an infographic comparing trends in individual market insurance rates showing that rates in Arkansas continue to be lower than those in surrounding states.

The state will welcome two new entrants in the individual marketplace in 2021, HMO Partners Health Advantage—which is an affiliate of Arkansas Blue Cross and Blue Shield—and Oscar Health Plan. Oscar’s planned expansion into 19 new markets, including Little Rock and Fayetteville, features $0 virtual primary care products. Telehealth has been a critical care delivery pathway during the COVID-19 pandemic when patients seek necessary care but want to avoid risk of infection, and Oscar seeks to capitalize on more routine use of telehealth following the outbreak.

As we noted in a recent commentary in Arkansas Business, many insurers have remained profitable during the pandemic, discounting or returning premiums due to patient delays in seeking care that have resulted in low service utilization and expenditures. This phenomenon has made it harder for insurers to justify significant rate increases for 2021 and has resulted in modest increases nationally, even though insurers generally use multiple years of enrollment and claims experience to project future rates. What is clear is that the uncertainty of the pandemic will continue into 2021, and insurers may soon be faced with new uncertainties about COVID-19 vaccine availability and costs and potentially new treatments.

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