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How Health Coverage Premiums Have Been Affected By COVID: Outlook Into 2022

January 12, 2022, by New City Insurance

The healthcare industry continues to face unprecedented challenges as COVID-19 relentlessly spreads throughout the U.S. Job losses and rising healthcare costs have made it challenging for individuals to retain coverage. Coupled with disruptions to healthcare access and delivery, many Americans struggle to receive the medical attention they need to maintain good physical and mental health.

doctor talking to patient about health coverage premiums and covidAnnual family health coverage premiums for employer-sponsored health insurance rose 4 percent in 2021 to an average of $22,221 for the year, according to a recent benchmark KFF Employer Health Benefits Survey released in November. The survey revealed that the average employee contributed $5,969 this year towards the cost of family coverage, with their employers paying the remainder.
Health insurance premiums for the 2021-2022 cycle are expected to exceed the previous year’s increase, creating uncertainty for many who cannot afford inflated healthcare costs. Learn more about how health coverage premiums have been affected by the COVID-19 pandemic and where to find affordable health insurance.

Health Premiums’ Steady Rise

Businesses across the country experienced moderate relief in 2020. In response to the COVID-19 pandemic, insurance companies prioritized the health and well-being of Americans and focused on improving COVID-19 vaccine access and acceptance. However, this relief in health coverage premiums is not expected to continue in 2022.

Fear of contracting COVID-19 has caused many Americans to defer or forgo medical, dental, and vision care. Delaying or avoiding doctor visits and medical procedures due to the pandemic has directly resulted in higher utilization in the second half of 2021 and is expected to continue into the new year.

A recent KFF poll suggests up to 50 percent of the public have postponed or avoided medical care due to concerns about the coronavirus. Avoiding medical care results in higher health insurance costs as these delays sometimes cause treatable conditions to become more expensive to treat.
COVID has also increased the need for testing, care, and treatment as more Americans become ill and require lengthy hospital stays. Based on its current course, healthcare spending is expected to grow at an average rate of 5.4 percent annually and reach $6.2 trillion by 2028, according to the U.S. Centers for Medicare & Medicaid Services.

In response to the ongoing crisis, policymakers in many jurisdictions are working to find ways to support policyholders, including small- and medium-sized enterprises that have encountered significant business interruption losses since the start of the COVID-19 pandemic.

COVID’s Impact On Health Premiums

While it is not uncommon to see minor increases in health coverage premiums from year to year, the COVID-19 pandemic has significantly changed the healthcare landscape in ways not seen before. Although the full financial impact of the pandemic is yet to be seen, its ramifications are expected to be experienced for years to come.

When forecasting premiums, it is important to remember that insurers are required to develop the following year’s rates based on the following year’s expected costs only. Insurers are not permitted to include past losses in prospective premium rates if those costs are not expected to continue.

The worst of the pandemic is indeed likely behind us, but people are still getting sick. According to the CDC, the current 7-day average of cases is 118,515 as of December 2021 and with growing concerns about new variant B.1.1.529 or “Omicron,” 2022 health coverage premiums are likely to be affected.

people talking about Health Coverage Premiums Have Been Affected By COVIDCOVID-19 has greatly impacted healthcare spending as a whole since the start of the pandemic. In addition to the lower utilization of healthcare services, the demand on hospitals has varied greatly because of waves of coronavirus patients.
Many healthcare systems were forced to reduce nonemergency medical services due to a lack of staff and resources.

There have also been some concerns about the increase in telehealth services in response to the pandemic. Although these services were proven exceedingly helpful in 2020, questions remain regarding the overall effectiveness of these services. There is also some confusion as to how to appropriately set reimbursement levels.

Coverages That Are On The Rise

The COVID-19 pandemic changed the course of the healthcare industry’s future, seemingly overnight. While nothing is set in stone, the healthcare ecosystem and the patients it serves are likely to experience a challenging world of virtual doctor visits, remote working, and a weakened supply chain due to shortages.

The types of coverage that patients seek are also likely to change pace. Uncertainty, fear, and grief will alter consumer behavior, increasing the need for services like mental health coverage. According to KFF, about 4 in 10 adults in the U.S. reported symptoms of depressive disorder or anxiety during the pandemic, up from 1 in 10 adults who reported these symptoms in 2019.

COVID’s unprecedented scope and speed have forced many healthcare organizations to address unexpected and serious problems with regard to healthcare access and availability. A sudden drop in employment at the start of the pandemic, along with forced business closures and surges of illnesses, forced the healthcare industry to quickly adapt to the new “normal.”
While the healthcare industry is starting to recover, certain coverages continue to rise. Here is a closer look at these rising healthcare coverages and the part they play in a post-COVID world.

Telehealth

In February 2020, the CDC advised healthcare providers and patients in areas affected by COVID-19 to adopt social distancing practices, which included offering clinical services through virtual methods like telehealth. This two-way telecommunications technology proved highly advantageous in helping to stop the spread of the virus.

The use of telemedicine grew a whopping 6,000 percent during the COVID-19 pandemic, according to Definitive Healthcare. Telehealth services helped the healthcare industry overcome physical barriers between provider access and patients, meaning more patients could get the healthcare services they needed without potentially exposing themselves or others to the virus.

In the U.S., “stay at home” orders and social distancing guidelines enforced by the government prevented many patients from seeing their providers in person. In response to these strict orders and guidelines, many employers made the swift decision to expand their telehealth offerings.

Near the start of the pandemic, approximately one-third of larger companies (200 or more employees) and 19 percent of small companies (50 to 99 employees) that offered telehealth services expanded the number of services covered and the type or number of clinicians who could provide telehealth services, according to the JAMA Network.

In addition, 24 percent of employers expanded the locations or settings in which participating workers could use telehealth services. Nearly half of all employers that have 50 or more employees for whom they offer health benefits agree that telemedicine will remain an important service in the future.

Wellness Programs

More than 70 percent of employees described the COVID-19 pandemic as the most stressful period of their professional careers, according to MarketWatch. From financial issues related to job cuts to the challenge of juggling remote work with home responsibilities, the pandemic has taken a serious toll on workers’ physical and mental health.

The ongoing pandemic has revealed the need for more extensive wellness programs, including virtual wellness offerings. Since the start of the pandemic, more employers have started offering online health solutions, such as webinars, virtual fitness classes, and mindfulness exercises employees can safely practice at home.

With employees becoming more health-conscious, job seekers are being more selective about choosing companies that care about their wellbeing. Employers must become more aware of the ongoing physical and mental health issues that workers face now and in the future. Businesses that cater to the health needs of employees by offering competitive health and wellness benefits are more likely to attract and retain top talent.

Mental Health Coverage

Covid-19 doctor knowing different health coverage premiumsCOVID and the resulting economic recession have negatively impacted the mental health of many Americans and have created new barriers for people that already suffer from substance abuse and mental health disorders. Unfortunately, critical mental health services were halted or disrupted due to the COVID-19 pandemic in 93 percent of countries worldwide, according to a WHO survey published in 2020.

The pandemic drove many people to increased levels of drug and alcohol use. Many also experienced mental and neurological complications as a result of the virus itself, including agitation, delirium, and stroke. Individuals who have preexisting mental, substance, or neurological conditions are more vulnerable to infections and the mental health effects of the pandemic.

While mental health concerns have slowed since the wake of the pandemic, these services remain more important than ever before. Unfortunately, rising health coverage premiums for mental health services has made it challenging for many sufferers to get the services they need.
Going into 2022, more employers are boosting mental health resources as they recognize the ongoing strain that the pandemic has put on employees. According to a Business Group on Health survey, 54 percent of employers stated that they will offer free or low-cost virtual mental health visits.

Work With New City For Your Health Insurance Coverage

The COVID-19 pandemic has affected nearly every aspect of our lives, including the affordability of health coverage. Congress passed four major relief bills both in 2020 and 2021 to help improve the economy and health system during the sudden COVID-related recession. Several administrative changes have also been implemented by the Biden Administration to help more people enroll in health insurance coverage.

With coronavirus cases continuing at a steady rate in the U.S., having adequate health coverage is essential. Employers can help ensure that their workforce remains physically and mentally healthy until the end of the pandemic and onwards. To learn more about how health coverage premiums have been affected by COVID or to speak with an experienced employee benefits consulting firm, contact New City Insurance.

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New City Insurance
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Carol Zhang
Carol Zhang
04:29 06 Mar 22
As a rapidly expanding national media organization, the employee benefits strategy and administration that New City has provided us during our growth has been invaluable. They have been proactive about informing us of the different benefit strategies available to us as we grow as well as managing the additional compliance laws and reporting requirements at each stage of our growth.
Claudia Villalobos
Claudia Villalobos
20:14 03 Mar 22
New City Insurance made navigating through all the health insurances super EASY. Their documents are highly informative, professional, and easy to work with. Thank you for making the process of choosing a health plan so simple. You guys are THE BEST!
Philippe Salas
Philippe Salas
17:02 22 Feb 22
I never expected to have a good time talking to an insurance salesman, but let me tell you Brendan was quite the treat. He was very helpful explaining the options and has a wonderful sense of humor. I hope to speak with him every time I call.
Jennifer Polito
Jennifer Polito
17:15 09 Feb 22
Super easy enrollment process. Fast and friendly customer service. If you are looking for an insurance company that is there for you every step of the way I highly recommend New City Insurance.
Rocky Salas
Rocky Salas
23:46 07 Jan 22
So friendly, I hope to speak to him again in all my future insurance needs.
Rocky Salas
Rocky Salas
23:38 07 Jan 22
So friendly and soft spoken. I hope to speak to him again in all my future insurance needs.
Jose Brena
Jose Brena
13:20 06 Jan 22
Eric Calciano has been extremely helpful in finding and selecting the right insurance coverage for our company. With many options out there Eric assisted us on getting a low cost provider saving more than 20% than from our competitors and providing excellent coverage for our employees.
Anastasia Beaverhousen
Anastasia Beaverhousen
17:05 28 Dec 21
Signing up for insurance was quick and easy. Felicity Sundsboe
SFCC
SFCC
22:08 29 Nov 21
Jeff Stoltey and his team provide excellent customer service. Jeff has always provided my company SFCC with straightforward options. I went to a larger insurance company only to RUN BACK to Jeff at New City Insurance. I recommend them to anyone needing insurance without hesitation.
Kevin Luby
Kevin Luby
19:13 22 Oct 21
Quick, easy & informative. We were able to secure quality insurance for our small business on a tight deadline. Thanks for the help New City.
Theresa Ruybol
Theresa Ruybol
19:30 01 Jul 21
Eric was so great with us. He was very patient and kind as we are a newer smaller organization who is growing rapidly. With that said, we had made our inquiry, he had great rapid response and mostly had to wait on me. Any request that we made and/or questions we had, he was great answering and helping us understand. Then when we were ready for all documents and to move forward, Brendan helped with getting that together and the two of them worked their magic on New City's end to notify me of what was needed, assist me in that process and confirming that all was complete and approved for the coverage. I just want to say thank you all again so much, as insurance has always been confusing to me, and you all made that process go a lot smoother.Thank you
Andrea Ordendorff
Andrea Ordendorff
21:06 07 May 21
I've been working with both Clayton and Brendan for well over a year. As the purchase of our dental practice was delayed well over 14 months they both patiently supported me and continued to make themselves available. When we were officially ready to sign up they made the whole process seamless and super easy. This team is highly knowledgeable, professional, supportive, and efficient! I can't thank them enough for everything they've done.
T W
T W
22:32 30 Aug 20
I love New City Insurance. I never had a good experience dealing with insurance brokers until I started working with Brendan. He’s awesome! He is patient with me and takes the time to answer all my questions. I’m very grateful for all his help and hard work!
Mary Jane Deyette
Mary Jane Deyette
00:57 11 May 20
Jeff Stoltey is so awesome...even thru my company had only two employees, he took the time each year to research and find the best plan for us. The only reason I am leaving New City Insurance is because we no longer have any employees. Thank you Jeff
Alma Ortiz
Alma Ortiz
22:25 23 Feb 20
Brendan was awesome! I couldn't figure out how to pick my plan and he returned my call on a weekend to help me. Outstansing service!
jessica kavanagh
jessica kavanagh
19:53 13 Feb 20
Brendan was so helpful I definitely recommend him if you’re in need of good help and getting it done promptly. Thankyou so much again.
Tricia DeYoung
Tricia DeYoung
19:49 13 Feb 20
I was very thankful I inquired about this info. with Brendan. He was very helpful so I understand the benefits available much better now. Thank you Brendan.
B Bayer
B Bayer
17:43 24 Sep 19
NCI handled almost everything from start to finish. Clayton and Brendan made the plans easy to understand and walked me through the application process. They got me my ID numbers before my cards arrived so that I could keep an appointment I had already scheduled. My last broker wouldn't have done that. 5 stars!
Jessica Lehr
Jessica Lehr
03:36 07 Jun 19
Our staff was interested in a health plan, but we didn't know how beneficial a solid employee benefits package would be for our business to expand. We'd lose prospective employees because they had more options for their medical insurance which was sometimes more valuable than more pay. The New City team was amazing and gave us as many affordable options as possible so that everyone had their needs met.
Mike McClay
Mike McClay
19:36 03 May 19
My employer uses New City as their insurance broker, and I'm always amazed when I call in for assistance by how knowledgeable and attentive their staff is with my requests. Their online benefits platform makes selecting insurance plans pretty darn easy. I would highly recommend their services.
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