The Effects of COVID-19 on the Health Insurance Industry

How the pandemic impacted usage, pricing, and communications

The pandemic has changed just about everything, so it’s no surprise that its effects on the health insurance industry are vast and likely long-term. From costs to usage to communication, the industry was flipped upside down when COVID-19 hit. Here are just a few of its impacts.

Usage

By Spring 2020, it was clear that we were about to experience something no one could have prepared us for. So, it’s not surprising that for many, the initial reaction was to avoid health-related appointments if possible. The industry saw a decline in the number of people scheduling and attending preventative care appointments, whether cancelled by the patient or at the discretion of them medical provider. Even though preventative care and non-emergent visits have started to increase as people are likely feeling safer, their impact of delaying those visits could be long-lasting.

Preventive cancer screenings in the United States abruptly dropped 86% (colon) and 94% (breast and cervical) following the declaration of the COVID-19 national emergency.¹

For those needing the care of a physician for illnesses outside of COVID-19, the industry saw an influx in telemedicine visits. “During the early pandemic period in 2020, the percentage of telehealth visits for persons aged 18–49 years increased slightly, from 68% during the first week of January 2020 to 73% during the last week of March.”² While some people may now feel safer scheduling in-person appointments, the flexibility and convenience of virtual appointments means they’re likely here to stay, especially for busy people or those with autoimmunity concerns who want to stay extra cautious.

Pricing

The shift in virtual doctor’s visits and the decrease in preventative care visits not only changed how people prioritized their healthcare needs, but they had a significant impact on pricing. In the thick of the pandemic, the need for unity and compassion was clear. Not only from person-to-person, but from employer-to-employee and business-to-consumer. The Coronavirus Aid, Relief, and Economic Security (CARES) Act supported this by requiring health plans to cover the cost of COVID-19 testing and vaccinations, among many other things.

Even with the CARES Act, the pandemic caused such an economic decline that employers are still scrambling to pick up the financial pieces, from everyday operations to employee retention and benefits If there’s one thing the pandemic has taught us, it’s the importance of plan options that treat the whole person, and benefits to help fill the gaps medical insurance leaves.

Employees will likely be searching for employers who can provide major and supplemental benefits at an affordable cost, with a possible increased focus on reimbursement accounts, life insurance, and disability coverage.

These employee expectations mean that employers are going to be searching for savings of their own, which is why we’re seeing the federal government step in with relief packages and tax credits for both employers and employees.

Communications

Like most industries, COVID-19 drastically changed the way the insurance industry had to communicate. Any business who once feared a remote workforce were now forced into that model. So, it was no surprise that the health insurance industry had to do much of the same. Not only were companies having to focus on coronavirus coverage, but they also had to adjust operations for the safety of their staff.

This meant that many companies shifted to virtual meetings and phone calls rather than in-person sessions. Providers needed to ensure their customers were taken care of and had a way to ask questions quickly and efficiently. The virtual landscape extended to benefits enrollment, as many organizations were closed to outside vendors or partners. Employees seeking the guidance of an experienced benefits account manager still needed that personal touch regardless of the pandemic.

And even though the industry made this pivot rather quickly and based on necessity, it too is likely here to stay. While some people prefer in-person meetings, others have grown accustomed to the convenience and flexibility of a virtual option.

This is a high-level view covering some of the impacts known today. But it’s predicted the effects of COVID-19 will be felt for decades to come. As the list grows and we likely see changes in health insurance pricing and plan options, there are a few immediate adjustments employers can make to their benefits program to help with utilization through education.

4 Tips to Get Utilization Back on Track

1. Take stock.

What benefits are you currently providing?
What percent of your employees are using them?
How are you currently communicating about them?

2. Create a communications plan.

You need something to keep everyone accountable, and a plan is a great tool for this. It’ll also help you stay organized and ensure no benefit is forgotten.
This is also a great time to prioritize. What benefits need communicated first, and then second, and so on? Start with those that have the biggest impact or those that have the lowest utilization.

3. Set a frequency and stick to it.

A good place to start is with monthly reminders about their benefits in general. You can then add on to those with specifics like reimbursement account receipt audits or wellness checkups.
Once you get started you can increase or decrease the frequency of communication. The best approach is to have consistent, frequent communication, which can lead to an increase in awareness and understanding.

4. Get creative.

Change up messaging to ensure you’re speaking their language. For the first time ever, we have four generations in the workforce, with different generational ways of communicating. Boomers close to retiring will have different needs, than Gen Z’s entering the workforce.
Everyone retains information differently, so also use different communication methods: videos, emails, flyers, etc. With the right education, employees are empowered to make purchases on behalf of their families. Learn more about employee education.

With the right education, employees are empowered to make purchases on behalf of their families.
Learn more about employee education

This blog is up to date as of June 2021 and has not been updated for changes in the law, administration or current events.