It also must be noted that COVID-19 is marked in the acute phase of the illness by a need for critical care hospitalization and intensive respiratory care therapy. These treatments are very expensive and definitely fall in the significant high-claims category. It goes without saying that no underwriter priced out premiums for 2020 health insurance plans with the expectation of a pandemic, let alone one on the scale of COVID-19. The reality of what the COVID-19 claims impact might be for a given population is also weighted heavily based on both region and demographics. While there is no way to fully understand the effect on health plan premiums at this time, it is worth noting that there will definitely be an impact. Several obviously critical questions flow from this reality: • How long is “temporary?” • Will there be a counterbalancing overconsumption after Shelter in Place orders are lifted? • What will be the real-feel impact of medical provider capacity constraints upon “re- opening?” • What can we expect as we look forward to near-term renewals and in budgeting plan costs for 2021? • How will the temporary decline in costs counterbalance the actual high cost of COVID- 19 claims? • If costs are actually lower than expected in 2020, what might we expect in 2021? Given the timing of the pandemic, every month of claims matters in projecting future healthcare consumption behavior and thus projecting claims costs. We can expect underwriters to potentially delay longer than normal in the hope of getting additional months of important claims data and because of the need to make projections absent the typical measures of risk certainty upon which they rely. With these and other critical issues and yet- unanswerable questions looming on the horizon, employers would be wise to expect uncertainty well into 2020 as to what premiums might look like at their next renewal. Life and Disability Insurance Here, too, we expect to see claims activity in unprecedented territory. Some disability carriers have stepped forward in liberalizing definitions of disability to include quarantined individuals. Significantly greater numbers of individuals are and will be filing short term disability claims. This will result in claims well beyond the level projected in even worst-case- analysis underwriting projections. And worst of all, life insurance claims resulting from COVID-19 will far exceed mortality assumptions. The Future There is no way to predict what the future holds at this time relative to employee benefit premiums. What we do know is that the morbidity and mortality assumptions that were baked into policy premiums for 2020 are significantly off target (both positively and negatively). What that actually translates to come renewal time, we will all need to see. But early awareness of this reality amidst the many other business pressures of the day is important.
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