By Joe Paduda
Wednesday, July 20, 2022 | 0
First, a bit of contextualization.
Large health insurers that sell insurance through exchanges must now file their rates with the federal government. Although they don’t insure many people, their statements are detailed, public, and cover 13 states: Georgia, Indiana, Iowa, Kentucky, Maryland, Michigan, Minnesota, New York, Oregon, Rhode Island, Texas, Vermont, and Washington. DC
The fine folks at the Kaiser Family Foundation have done a lot of analysis. Here are the main takeaways:
- Many insurers predict a medical cost trend of 4-8%.
- “A substantial part of the premium increase comes from rising health prices and health care utilization.”
- An insurer said: “The CPI for medical care services in March 2020 (pre-pandemic) was 5.5% and in March 2022 it was 2.9%. These data suggest that a correction is imminent, as increases in labor and supply costs directly impact hospitals and medical practices.
Oh, and that COVID thing? “[M]all insurers expect the pandemic to have a neutral or only slight net impact on health costs and premiums. »
So what does all this mean?
Here is my point of view:
- For this year, the increase in usage and prices will result in a trend north of 5%.
- We will see a bump in Q3/Q4 as rising labor costs ripple through the system.
- The 2023 trend is likely to be around 5% as inflation in other sectors declines.
The wild card is – get ready – politics.
Joe Manchin, the mercurial-I-can’t-find-myself-and-it-is-good-fun-to-be-the-center-of-attention-of-West-Virginia senator, will determine if 13 million Americans can no longer afford health insurance.
If the legislation is not passed, health systems will have to support more people without health insurance; some systems and hospitals will raise prices to cover their losses.
What does this mean for you?
Higher health care costs for private insureds, workers’ compensation insurers, employers and taxpayers.
Joseph Paduda is co-owner of CompPharma, a consulting firm focused on improving pharmacy workers’ compensation programs. This column is republished with her permission from her Managed Care Matters blog.