Many of the nation's largest health insurers have now waived
patient cost sharing and prior authorization requirements for treatment of
COVID-19, the disease caused by the novel coronavirus. Experts praise payers
for making the change, but say the moves could have negative financial impacts
for some firms.
The changes will be welcome news for members stricken with the
virus and the caregivers treating them. Ashraf Shehata, KPMG national sector
leader for health care and life sciences, says payers are doing their best to
act responsibly during the crisis.
However, insurers will need to come up with a way to pay for the
cost sharing waivers and, more importantly, the increased care utilization that
COVID-19 has made inevitable. Shehata says the costs are difficult to project,
and a full assessment of the financial impact of the pandemic will take years.
Michael Abrams, a co-founder of health care consultancy Numerof
& Associates, says higher premiums are a certainty, particularly as people
across the economy lose income.
"Insurers faced with higher claims numbers will need to
adjust their premiums in the future to try and recoup the money they will have
to pay out now," Abrams says. "People without benefits will need to
go to Medicaid or the individual market to get coverage. That's going to saddle
those programs with unanticipated claims. Higher Medicaid and individual market
premiums will be the result."
Both Abrams and Shehata say that utilization for routine medical
procedures will drop during the pandemic.
"We haven't really fully realized the impact of shutting
off a lot of the outpatient and elective surgeries yet. So the expectation is
we might see positive claims experience, which might help offset some of the
COVID impact in the short term. In the long term, we'll start to see some of
that impact of the delay [in routine care]," Shehata says.
Abrams adds the crisis could accelerate payer-provider
consolidation. "To the extent that you have some vertical consolidation,
provider organizations are often limited in capital reserves. But that's
exactly what insurers have to bring to the party. That is a convenient
marriage," he says.
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