Health Insurance Challenges and Trends to Watch in 2022

The workplace has changed drastically since the arrival of COVID-19, which continues to fast-track digital transformation initiatives. As the insurance industry responds to rapidly evolving employee needs, the demand for forward-thinking technology capabilities from medical carriers roared last year and will continue to do so in 2022.

What hasn’t changed? The fact that the pandemic remains top of mind for U.S employers and insurance carriers, specifically when it comes to mental and physical health. This has led to advances in virtual care, behavioral and mental health services, and a heightened focus on health equity.

Today, we will lay out four popular healthcare trends, predictions, and underwriting challenges the insurance industry faces in 2022.

1. The need for mental and behavioral healthcare continues to soar

As the pandemic worsened, Americans dealt with changes in their work, family, and community. Stress levels continued to surge as people could not access their usual support systems and continued to worry about when or if life would ever “normalize.” According to the Centers for Disease Control and Prevention (CDC), many of the largest health insurers in the U.S have seen a 25 percent increase in outpatient behavioral health visits between 2020-2021 and it’s predicted to continue through 2022.

Thankfully, the availability of virtual behavioral healthcare (telehealth) simplified access and created a convenient and more private experience for patients who may not have known where to turn in the past. The use of telemedicine is now 38x higher than before the pandemic, an important question to ask is, will commercial insurers and the government continue to reimburse for telehealth? Dr. Ian Tong, Chief Medical Officer at Included Health, believes the answer is yes. Dr. Tong concludes, “Pre-pandemic virtual care was used for urgent, low-complexity issues – cough, cold, rashes. But today, the real value is for integrated chronic-disease management or ongoing behavioral-health therapy, where people need not be burdened by the constant travel in and out of doctors’ offices. The more care that shifts to virtual, the less burden of disease the patients will have, which will lead to better outcomes. This is an opportunity that should be afforded to everyone, especially our most vulnerable and historically underserved communities.” 

2. The path toward health equity

The consequences of health inequity can be severe. It is known that people who lack access to quality care are more likely to become sick or disabled and die at a younger age than people who have no difficulty getting care.

Health disparities sometimes referred to as social determinants of health, can include gender, sexual orientation, income, race, and geographic location. For example, rural communities and areas with high poverty rates may have few or no hospitals and medical professionals. 

A recent study from County Health Rankings, highlights that health behavior combined with social and economic status overwhelmingly impacts health and well-being. Ironically enough, many of these same factors are often used to set insurance rates, leading to changes in health legislation in many states to avoid discrimination.  

3. The rise of insurtech

Over the past few years, insurance companies have invested heavily in insurtech. For insurers, the advantage of partnering with insurtechs is that they can supplement their existing product portfolio or simplify internal operations in a fast, low-cost way without having to build the internal expertise or applications themselves. Insurers must connect insurtech to their core business to capitalize on its full potential. Insurance technology companies address a variety of challenges insurers may face. In health and wellness, insurers are positioned to incentivize consumers to improve their overall well-being by reducing costs and offering lower premiums in exchange for completing health-related challenges and activities. The rise of customer-centric health and wellness technology options will continue to expand in 2022. 

Insurtech providers are also adding AI-powered capabilities to medical carriers in the form of predictive underwriting tools. Insurance is, at its core, a financial product and has traditionally been seen as a “win-lose” product. When a claim is paid correctly, the policyholder “wins,” and the insurer “loses.” Predictive underwriting insurtech tools that bring greater transparency and fairness to rate setting, coupled with insurtech solutions geared toward incentivizing policyholders to reduce risk through adopting healthy habits, can result in employers’ “triple win” scenario. Healthier employees, paying less money for health insurance, can be happier, more productive, and loyal to their employer.

4. Medical insurance underwriting challenges

In a recent SIIA Webinar series, a panel of medical underwriters and actuaries presented eye-opening concerns underwriters will face in 2022. 

COVID-19 testing is a wildcard

The handling of COVID-19 testing in 2022 is keeping many medical insurance actuaries up at night. For one thing, testing is costly. Under the most recent guidelines, many health plans allow 8 tests per employee and reimburse $12 per test, equating to up to $96 per employee. Although many health plans are still finalizing guidelines to address this concern, these new costs can be devastating to high deductible health plans. 

Tread with caution when underwriting groups based on geography

Vaccination rates in states such as Vermont and Rhode Island are upwards of 78%, while vaccination rates in states like Georgia and Arkansas are around 50%. Underwriters now widely understand that the severity of COVID-19 related claims is related to vaccination rates. The industry will see an uptick in costs associated with stop-loss specific deductibles in areas with lower vaccination rates. 

Comorbidities driving spec claims

We weren’t necessarily a healthy nation before COVID-19, and now over two years into the pandemic, it is only getting worse. In a study from AAMC, there has been an increase in chronic diseases due to unhealthy pandemic-driven behaviors. Since lockdown, the average weight gained per individual is an alarming 29 pounds. Obesity increases the likelihood of many issues, including premature birth and heart disease. Also, alcohol consumption has increased substantially, leading to a 50% increase in wait time for liver transplants. Lastly, diabetes, 10.5% of Americans currently have diabetes, and roughly 34.5% of adults are pre-diabetic. These are just a few of the many examples straining our healthcare system and ultimately having a huge impact on stop-loss rates. 

In 2022, we will continue to see changes in the insurance industry due to COVID-19. Although the challenges faced due to the pandemic have been difficult, we are starting to see positive solutions and adaptations in the health insurance industry.  The availability of telehealth, better access to care, and the rise of the insurtech are all promising solutions as we head into 2022. 

Sources

Advances in telemedicine are on the way in 2022. Healthcare IT News. (2021, December 20). Retrieved February 9, 2022, from https://www.healthcareitnews.com/news/advances-telemedicine-are-way-2022 

Centers for Disease Control and Prevention. (2020, March 11). Health equity. Centers for Disease Control and Prevention. Retrieved February 9, 2022, from https://www.cdc.gov/chronicdisease/healthequity/index.htm 

Explore health rankings: County health rankings model. County Health Rankings & Roadmaps. (n.d.). Retrieved February 9, 2022, from https://www.countyhealthrankings.org/explore-health-rankings/measures-data-sources/county-health-rankings-model 

Presidential covid-19 health equity task force releases final report. AAMC. (2021, November 19). Retrieved February 9, 2022, from https://www.aamc.org/advocacy-policy/washington-highlights/presidential-covid-19-health-equity-task-force-releases-final-report 

SIIA Hot Topic Webinar Series; “A New Year of COVID – Implications for Self-Insured Health Plan Claims. (n.d.). broadcast. 

Top insurtech trends to look forward to in 2022. Times of India Blog. (2022, January 10). Retrieved February 9, 2022, from https://timesofindia.indiatimes.com/blogs/voices/top-insurtech-trends-to-look-forward-to-in-2022/