Health Plan Weekly

In recent days, actuaries and economists have begun to estimate how much it will cost to care for those stricken by COVID-19, the disease caused by the novel coronavirus. Since the crisis is still at an early stage, and medical data collection and analysis is limited, those estimates have a wide range.

Covered California, the California individual insurance exchange, estimated in a March 22 report that the total cost of COVID-19 coverage for the national commercial market could range from $34 billion to $251 billion in 2020. FAIR Health, a patient advocacy group, in a March 25 report estimated a possible range of $362 billion to $1.449 trillion in charges for hospitalized patients and $139 billion to $558 billion in allowed amounts.

Like scores of other businesses across the country, a major part of health insurers’ response to the coronavirus outbreak has involved transitioning employees from working in an office to working remotely. However, that task is not always as simple as telling associates to skip their commute, as one health insurance executive tells AIS Health.

Philadelphia-based Independence Blue Cross started preparing as early as two years ago to allow its employees to work from home as part of its business-continuity strategy, explains Mike Vennera, the insurer’s senior vice president and chief information officer. That effort involved two primary tasks: switching workers from desktop to laptop computers and running small work-from-home pilots with certain departments to troubleshoot any issues that might arise. Vennera notes that Independence was also able to test out its remote-work capacity when large snowstorms hit the Philadelphia region.

As the COVID-19 crisis continues to ramp up in the United States, projections about how it will affect various business sectors — including managed care — are evolving rapidly. But one concept that industry analysts seem to agree on is that health insurers with diversified business models may be better equipped to weather the storm.

For Peter Manoogian, principal at the health care consultancy ZS Associates, a main reason for the value of diversification comes from simple math. During the last financial crisis in the mid-2000s, about 5 million people shifted out of the employer-sponsored plan market when they lost their jobs, Manoogian tells AIS Health.

✦ America’s Health Insurance Plans (AHIP) and the Blue Cross Blue Shield Association (BCBSA) sent a letter to House and Senate leaders on March 19 outlining various legislative proposals to “protect Americans’ health care and coverage.” The trade groups want: a nationwide special enrollment period for the individual market; a 90% subsidy for COBRA or other insurance coverage for those who lose jobs; some mechanism to help companies continue to provide health insurance to their employees (such as direct subsidies or payroll tax relief); and a “backstop contingency program” that would be triggered if insurers’ costs are significantly higher than expected, in order to prevent a spike in premiums. Regarding the backstop program, AHIP and BCBSA say it should “cover a portion of related costs for 2020 and 2021 and apply to the individual, employer, Medicare and Medicaid markets.” Read the letter to congressional leaders at https://bit.ly/3becGwm.

✦ The number of health insurers taking steps to address the COVID-19 pandemic (HPW 3/16/20, p. 1) has ballooned in the wake of President Donald Trump declaring a national emergency. Bright Health is among the insurers amending their initial policies, as the Minneapolis-based company will now cover the COVID-19 test and associated office visit as a no-cost preventive care service regardless of network, authorize early medication refills, provide non-emergency transportation to all members and cover all telemedicine visits in connection with COVID-19 testing and diagnosis at no cost to members. Oscar Health, meanwhile, on March 13 unveiled what it dubbed “the first testing center locator for COVID-19 in the U.S.” View the latest list of insurer actions at https://bit.ly/2xdKGde and Oscar’s press release at http://on.hioscar.com/3a2M6G8.

Consolidation in commercial health insurance markets is not slowing down, according to the 2019 edition of an annual report from the American Medical Association, which found that the share of markets that are highly concentrated increased from 71% to 75% between 2014 and 2018. The report concludes that such market consolidation is harming consumers and providers of care. Another recent study, this one concerning the effect of provider consolidation on care quality, found that newly acquired hospitals did not see any improvement in readmission or mortality rates, but they did see slightly worse performance on patient-experience measures.