An estimated 41 percent of U.S. adults have avoided medical care during the pandemic because of concerns about COVID-19, including 12 percent who avoided urgent or emergency care and 32 percent who avoided routine care, according to findings of a recent survey of almost 10,000 adults published in the Centers for Disease Control and Prevention’s Morbidity and Mortality Weekly Report (MMWR).
However, now that large vaccine rollouts are underway, the healthcare sector anticipates a surge in demand for medical services as more people resume their prepandemic medical care routines. For employers who choose to self-fund their health insurance programs, one outcome of this “ramp-up effect” could be more catastrophic claims and higher costs.
The risks of delayed care
In the MMWR survey’s findings, researchers noted that “if routine care avoidance were to be sustained, adults could miss opportunities for management of chronic conditions, receipt of routine vaccinations, or early detection of new conditions, which might worsen outcomes.”
“if routine care avoidance were to be sustained, adults could miss opportunities for management of chronic conditions, receipt of routine vaccinations, or early detection of new conditions, which might worsen outcomes.”
What this could mean is that individuals who were forced to delay elective surgeries or did not consistently receive ongoing treatment for high-risk medical conditions and are now seeking care may find that it takes longer or is more extensive.
Many medical facilities also endured historic revenue shortfalls during the pandemic as elective surgeries and other routine treatments that normally generated much-needed income were postponed. And while providers may welcome this influx of activity as patients become more comfortable with going to required or regular appointments, some important questions remain:
- As a result of postponed treatment of high-risk medical conditions, such as chemotherapy and dialysis, will late-stage catastrophic medical diagnoses emerge?
- Will the cost of elective surgeries increase due to delayed procedures over an extended period?
- Will there be an influx of new specialty drugs and gene therapies in the pipeline approved by the FDA post-COVID-19?
For employers, affirmative answers to any of or all these questions could translate to higher frequency and severity of healthcare claims.
Managing catastrophic healthcare claim costs
The implications of delayed care may remain unclear, but what remains true is that healthcare expenses continue to rise as treatment and care options have become more sophisticated and advanced. Given more than 60 percent of U.S. employers self-fund their health insurance programs, these organizations should have plans to manage related costs.
One solution an organization should consider is medical stop loss insurance, which transfers the financial risk arising from large, unexpected claims to an insurance carrier. For a self-funded employer, medical stop loss insurance can help safeguard against catastrophic medical claims costs that could materially impact their operation and bottom line.
Making the most of your medical stop loss protection
While the medical claims experience during the past year likely represents an anomaly within the healthcare sector, the current “ramp-up effect,” along with other factors, could affect the cost of new and renewal medical stop loss insurance policies over the next year.
To make the most of their medical stop loss programs, employers should understand what factors could affect pricing, such as:
- An employer’s claims experience. While insurance carriers will review recent COVID-19 data, it will be considered along with historical data.
- Healthcare plan enrollment. Many plans saw decreases in enrollment as a result of COVID-19-related employee terminations or furloughs. Carriers will want to understand what percentage of those individuals will be rehired with preCOVID health benefits.
- The organization’s experience with self-funding. Carriers review an employer’s track record with self-funding and willingness to proactively contain costs.
In response to COVID-19, many businesses were forced to take cost-cutting measures that affected workforces and benefits. And as operations normalize, companies will begin to re-evaluate these decisions. Given the importance of healthcare benefits to attract quality talent and maintain a productive workforce, companies should consider medical stop loss insurance as part of risk-management planning.
Protection for the long term
Medical stop loss insurance carriers can help employers offer health benefit programs that best fit their current employee needs and manage post-pandemic risks.
As an example, Liberty Mutual offers several stop loss coverage options as well as its voluntary ProAct® risk-management program to help manage catastrophic medical claims. With our ProAct program, customers can benefit from our in-house clinical team of nurses and can access vendor resources, such as specialty networks that manage transplants, oncology care, traumatic injuries, and other high-exposure cases, to help improve care and outcomes.
Managing the financial impact of large medical claims isn’t easy at any time and takes on even greater importance during this unprecedented time. With Liberty Mutual’s medical stop loss coverage, companies can plan confidently for the future. Learn more about how we can help employers with self-funded health insurance plans.
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