Stay-at-home orders could impact health insurance rates

Updated: Jul. 29, 2020 at 8:24 PM CDT
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TYLER, Texas (KLTV) - When stay-at-home orders were enforced across most of the country, some car insurance companies gave discounted rates, due to the fact that most people weren’t driving much.

Many people are holding off on doctors appointments or elective surgeries during the COVID-19 pandemic, so we looked at what kinds of situations may result in health insurance companies giving refunds.

“The only carrier so far on the group side has been United Health Care that has actually refunded some premium to employers,” said Charles Parker, VP of work site consulting at Hibbs-Hallmark. “It hasn’t been across the board, but some groups have received that.”

Parker works for an independent insurance agency in Tyler. He said United is the only carrier he knows of to have given a discount yet. But it isn’t to individuals.

“It’s the employers that have received the refunds,” said Parker.

He said some dental and vision carriers have done the same; providing some refunds on premiums to employer groups.

“Under the health insurance plan, there is a thing called the Medical Loss Ratio, or MLR, and groups and individuals are required to pay out 80 or 85 percent of all the premium they collect or they have to give a refund back to the customer.

He said he believes health insurance companies are waiting before giving any discounts or refunds.

“I think they’re waiting until they get a little bit later in the year look at the total loss ratio, claims versus premium, in terms of what they’ve paid out to determine whether groups and individuals will receive refunds,” said Parker.

He said the lack of people going to the doctors and telehealth visits — for example the CMO at Christus Trinity Mother Frances said they’re emergency department, operating rooms, and hospitals were experiencing half the volume they usually do during most of the pandemic — this results in a lot less claims being made and he expects that to eventually work out to refunds or discounts for individuals.

“If people aren’t going to the doctor, they’re spending less money on claims, so therefore the loss ratio should be better for the individuals and the groups,” said Parker. “Depending on when they renew how they renew and all those things."

He said due to the unpredictability of the pandemic and the market, he can’t be too sure as to what the future holds for health insurance rates.

Parker said the PPP program funds were meant to provide employers with funds for not only employee paychecks but also benefits. He said when that money runs out, he has grave concerns what the impacts will be on the health care industry overall.

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